Fairchem Organics Ltd — Q4 FY26

Fairchem Organics Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=hQE6_Ogsdoc Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 FI26 conference call of Fair Cam Organics Limited. 0:10 10 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start 0:25 25 seconds then zero on your touchstone phone. I now hand the conference to Miss Pangi Jen from Valerm Advisor. Thank you and over to you ma'am. 0:35 35 seconds Thank you. Good afternoon everyone and a warm welcome to you all. My name is Pangi Jen from Ballard Advisor. We represent the investor relations of 0:43 43 seconds Meganics Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. 0:53 53 seconds Before we begin, a quick cautionary statement. Some of the statements made in today's concord may be forward-looking in nature. Such forward-looking statements are subject 1:01 1 minute, 1 second to risk and uncertaintities which could cause actual results to differ from those anticipated. 1:07 1 minute, 7 seconds Such statements are based on management's belief as well as assumptions made by and information currently available to the management. 1:15 1 minute, 15 seconds Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. 1:22 1 minute, 22 seconds The purpose of today's earnings conference call is purely to educate and bring awareness about company's fundamental business and financial 1:28 1 minute, 28 seconds quarter under review. I would now like to introduce you to the management team joining us at today's call. We have with 1:36 1 minute, 36 seconds us Mr. Nahush Zaribana, managing director and chairman and Mr. Bhaves Sha, chief financial officer. Without 1:44 1 minute, 44 seconds any dealing, I would like to hand over the call to Mr. Bhaves Sha to begin with the financial highlights. Thank you and over to you sir. 1:53 1 minute, 53 seconds Uh thank you uh uh thanks and good afternoon everyone. Uh welcome to the oning call for Q4 and 12 month ended uh 2:01 2 minutes, 1 second FI26. Uh yeah for the quarter under review the revenue from the operation uh stood at uh rupees 117 crores reflecting 2:11 2 minutes, 11 seconds a uh 3.2% year-on-year decline from the corresponding uh uh quarter. uh AITA for 2:19 2 minutes, 19 seconds the quarter was 8 crores with EITA margin of 6.9%. Uh the adjusted net profit after tax for the quarter uh 2:27 2 minutes, 27 seconds stood at uh rupees 3.7 crores. Uh for the year uh and their FI26 the revenue from operation stood at 460 crores a 2:36 2 minutes, 36 seconds decline of 14.5%. Uh against the previous year the was uh 22 crores with aa margin of 4.7 crores. The net profit 2:45 2 minutes, 45 seconds after tax uh uh stood at 6.2 crores. Uh the domestic sales contributed 91% of 2:51 2 minutes, 51 seconds the total revenue. Uh the total volume sold was 44,000 tons against uh 54,000 2:59 2 minutes, 59 seconds tons in the previous year. Uh during uh Q4 uh we have successfully completed the 3:06 3 minutes, 6 seconds buyback of 4.25 lakh shares uh which has increased the promoter of holding from 6.2% 2% to 632%. 3:16 3 minutes, 16 seconds Uh with this uh I'll hand over the call uh to our CMD Mr. Now Jan. 3:23 3 minutes, 23 seconds Thank you Bets. As we close the FI26, I want to take a moment to share our operational perspective on the quarter 3:32 3 minutes, 32 seconds and more importantly the road ahead. The Q4 FI26 continued a pre continued to 3:38 3 minutes, 38 seconds present a mix environment. Our revenue from operation saw a decline of 3% on year to year basis driven largely by 3:48 3 minutes, 48 seconds softer uptake from the paint industry which as you are aware has been navigating its own structure adjustments 3:55 3 minutes, 55 seconds over past several quarters. That said, I'm pleased to note that our IBITA margins improved to 6.8% 4:03 4 minutes, 3 seconds during the quarter. This improvement was primarily supported by better price realization in the domestic market as 4:11 4 minutes, 11 seconds the pressure from lower price imports moderated to quite an extent on the external environment. While we remain 4:19 4 minutes, 19 seconds watchful of evolving macroeconomic situation including the uncertainty arising from the ongoing Middle East 4:26 4 minutes, 26 seconds crisis and its potential impact on global supply chains and commodity prices. We are aware at the same time 4:36 4 minutes, 36 seconds consciously optimistic about trajectory ahead. The continued progress on a lower tariff framework with US. The prospect 4:44 4 minutes, 44 seconds of free trade agreement with UK and EU and the recent depreciation of rupee together has created a meaningful tailwind for our export competitiveness. 4:54 4 minutes, 54 seconds Despite the near-term uncertaintity, we remain quite confident and committed to navigate this environment with 5:02 5 minutes, 2 seconds discipline and resilience. We are confident that steps we are taking today will position us well for the future. 5:10 5 minutes, 10 seconds With that, I open the floor for question answer session. Thank you very much. 5:19 5 minutes, 19 seconds We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on the 5:27 5 minutes, 27 seconds touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star N2. 5:34 5 minutes, 34 seconds Participants are requested to use handsets while asking the question. 5:39 5 minutes, 39 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. 5:50 5 minutes, 50 seconds A reminder to all the participants, anyone who wishes to ask a question, please press start N1. 6:11 6 minutes, 11 seconds Participants, you may please press star and one to ask a question. 6:20 6 minutes, 20 seconds First question is from the line of Rakkesh Jin, an individual investor. Please go ahead. Hello. Hello. Am I audible? 6:29 6 minutes, 29 seconds Yes. Yes. Yes. 6:33 6 minutes, 33 seconds Uh so the pain segment has been uh Hello. Yes. Yes. Yes. We can hear you. 6:40 6 minutes, 40 seconds Yeah. Yeah. the pain segment has been the primary demand has 6:47 6 minutes, 47 seconds I'm sorry uh Mr. Jane, can you uh please repeat your question? We are unable to hear you. 6:54 6 minutes, 54 seconds Great. The so the pain segment has for uh faced some headwinds over the past few quarters. So do we see any recovery? 7:05 7 minutes, 5 seconds Uh yes we have start seeing recovery during the month month of uh uh March 7:12 7 minutes, 12 seconds and even during this quarter we see a robust recovery happening. 7:19 7 minutes, 19 seconds Uh my second question is regarding the company targeted uh revenue. So we were 7:26 7 minutes, 26 seconds targeting nearly 20,000 million. Uh any guidance regarding that? Oh, that's a very very long-term future. 7:35 7 minutes, 35 seconds I mean that is something which is a vision which we are working on. So it it's after 5 years. 7:44 7 minutes, 44 seconds Okay, that was it for now. Thank you. Okay. 7:51 7 minutes, 51 seconds Thank you. Before we take the next question, a reminder to all the participants, you may press star and one to ask a question. 7:59 7 minutes, 59 seconds We will take our next question from the line of Banisha from an individual investor. Please go ahead. 8:07 8 minutes, 7 seconds Hello. So my first question is on the FDA with the U E EU and UK. What specific product stands to benefit the 8:15 8 minutes, 15 seconds most? Uh for example like the isoceric acid or dimer acid or others and what is the current beauty differentials that 8:23 8 minutes, 23 seconds makes this market attractive once the FDA is in place? 8:30 8 minutes, 30 seconds both isosteric and Dmer uh uh will hit the duty 10% duty will help both 8:37 8 minutes, 37 seconds isosteric and dimemer that is uh more important uh and as regards uh the duty 8:44 8 minutes, 44 seconds differential uh between other countries and India we are on par with uh all the countries so I mean it's a healthy 8:53 8 minutes, 53 seconds competition for us when we are quoting our price to US buyers. 9:01 9 minutes, 1 second Okay sir. Also I have seen one more observation like power and fuel cost has 9:06 9 minutes, 6 seconds declined significantly in Q4 26 to INR 60 million from INR 80 million in the in 9:15 9 minutes, 15 seconds savings uh in uh in Q5 for 25. Is this a result of the energy audit? 9:23 9 minutes, 23 seconds Yes. Yeah, we did for one year we I mean uh during the proceeding of the year we did the energy audit uh of uh the plant 9:33 9 minutes, 33 seconds and based on that we looking at the feedback we invested in uh um electrical 9:40 9 minutes, 40 seconds equipments, pumps, motors uh we reduced our we invested in heat exchangers etc. And based on that uh 9:49 9 minutes, 49 seconds this achievement has been there and we are it's still ongoing we we expect further reduction in the energy cost. 9:59 9 minutes, 59 seconds Thank you. Thank you. Thank you. 10:07 10 minutes, 7 seconds Next question is fromina from Tavla family office. Please go ahead. 10:13 10 minutes, 13 seconds Hi. Uh my first question is with regards to our margin. Uh so uh uh going forward 10:22 10 minutes, 22 seconds uh are we expected to go back to what was our FI25 margin of EID margin for 10:27 10 minutes, 27 seconds around 8% if the situation normalizes or are we going to see a further margin expansion also uh considering the 10:36 10 minutes, 36 seconds initiative we have taken in the last year to improve the cost structure and 10:43 10 minutes, 43 seconds uh secondly uh on the long-term uh revenue growth uh we are we are saying 10:50 10 minutes, 50 seconds that we're going to trying to achieve 20 20,000 by FY30. So can you tell us that 10:58 10 minutes, 58 seconds uh where actually this expansion in revenue which we are planning to see is coming from 11:06 11 minutes, 6 seconds uh margins are going to be uh be better this year. uh I mean obviously 11:13 11 minutes, 13 seconds we are uh uh targeting to breach uh 8% margins uh we are target and we are fairly confident we'll be able to breach 11:22 11 minutes, 22 seconds that that is one thing and as regards the revenue thing uh currently we are uh 11:28 11 minutes, 28 seconds our plant is uh uh of 80,000 tons and we are working at around 65 66% capacity 11:35 11 minutes, 35 seconds utilization we are confident in next two years our plan could start working at more than 95% and capacity utilization 11:44 11 minutes, 44 seconds and second thing is we'll be adding one new raw material which is based on a new noral process which we have been saying 11:51 11 minutes, 51 seconds and so yes based on that uh this is the vision uh which we feel we might be able 11:58 11 minutes, 58 seconds to reach at 95% uh also the bid margin will remain 12:05 12 minutes, 5 seconds around 8% or are we going to can can it reach even further up considering that yeah it Yeah, it can it can it can creep up. 12:14 12 minutes, 14 seconds Yeah, operating leverage will respond. Yeah. 12:18 12 minutes, 18 seconds Okay. And uh this additional product uh is this also in the paint industry or it's a more of a cosmetic product? 12:25 12 minutes, 25 seconds So it's basically uh from the only chemical basket only. Okay. Thank you. 12:35 12 minutes, 35 seconds Thank you. 12:37 12 minutes, 37 seconds Next question is from the line of Chiag Vikaria from Budrani Finance Limited. 12:42 12 minutes, 42 seconds Please go ahead. Uh sir, I wanted to get a sense from you for uh financial year 26 uh in terms of 12:49 12 minutes, 49 seconds turnover s how much contribution is from dimemer acid leonic acid and isotenic acid. If you can throw some light. 12:57 12 minutes, 57 seconds Uh so uh dimemer acid has contributed uh yeah just a minute. 13:08 13 minutes, 8 seconds The dimer acid has contributed close to around 140 crores and isostic acid has 13:16 13 minutes, 16 seconds contributed 26 crores and 10% and around 56%. 13:27 13 minutes, 27 seconds I I did not get it. So det 30% and 5%. 13:35 13 minutes, 35 seconds and lionic lionolic acid sir also lionolic acid 30%. 13:43 13 minutes, 43 seconds Okay. Okay. Uh sir and in terms of volume sir I did not read you are saying for fi 26 you did a volume of how 40 how 13:50 13 minutes, 50 seconds much how much time? So Q Q4 we did uh 10,500 uh TS and for the whole year we have 13:58 13 minutes, 58 seconds done 44,000 and this for uh FI27 how do you see this panning out 14:06 14 minutes, 6 seconds and we expect uh to uh reach around 80% capacity utilization 14:12 14 minutes, 12 seconds of 120,000 t of the 80,000 sir of 80,000 14:18 14 minutes, 18 seconds okay uh I'm sorry Kesha we are not able to hear you. 14:27 14 minutes, 27 seconds Hello is this uh hello I hope my voice is audible. Yeah please proceed. 14:33 14 minutes, 33 seconds Yeah so sir so I wanted to ask you that our uh uh this uh uh what used to be 14:41 14 minutes, 41 seconds Adani Wilmer sir now they are forward integrating into olio resence. So I 14:49 14 minutes, 49 seconds understand since they are already into edible oil refinering uh so whatever raw material we are probably buying from 14:56 14 minutes, 56 seconds them. So for them it is a forward integration. So uh sir what kind of impact can it have on our business and 15:04 15 minutes, 4 seconds our margins is already in oliochemical since year 20110. 15:12 15 minutes, 12 seconds They are already in the basically they are work on utilizing the palm based products in their olio. The products 15:21 15 minutes, 21 seconds what we are using are all soft oil based product and which are produced in a very 15:27 15 minutes, 27 seconds small quantity to the tune of 1% of the crude oil. So it's a I mean the 15:35 15 minutes, 35 seconds equipments and market and process everything is different for both the products. 15:42 15 minutes, 42 seconds Understood sir. And uh sir also now uh recently we are hearing a lot about Chinese anti-involution and that they 15:51 15 minutes, 51 seconds are they have basically at least they're talking about stopping the aggressive dumping. So so are we seeing any kind of relief on on that count? 16:01 16 minutes, 1 second Yes, we have seen we have already seen that uh since uh February end. 16:10 16 minutes, 10 seconds Okay. Sir, so then uh how much uh further improvement can we expect for FY27? 16:18 16 minutes, 18 seconds uh if you could uh give us some broad outline what kind of well it's not possible for me to really 16:27 16 minutes, 27 seconds see that what we are saying is we'll be uh we are targeting to work at 75 80% capacity utilization and our our margins 16:35 16 minutes, 35 seconds obviously will improve uh because uh there is no major dumping happening from 16:42 16 minutes, 42 seconds Chinese answer uh now uh sir what kind of improve Improvement in realizations. Are we seeing in recent times? 16:53 16 minutes, 53 seconds Fairly good. Fairly good. 16:54 16 minutes, 54 seconds Yeah. Because Chinese dumping is not happening. So our realization we are able to sell at a good rate. Good rates. 17:01 17 minutes, 1 second So at least in percentage terms if you could uh shed some light or uh or like per kg how much have our major products 17:09 17 minutes, 9 seconds increased? Uh no no it it it won't be possible for me to share that even percentage wise like 10% 5% 17:18 17 minutes, 18 seconds something like broad directional this thing. Yeah. Yeah. Around 8 to 10% uh improvement has happened 17:27 17 minutes, 27 seconds and sir also rupee has fallen quite significantly. 17:31 17 minutes, 31 seconds That is yeah that is also that is increase the import cost. 17:34 17 minutes, 34 seconds That is uh and once our export will improve that will add to our bottom line. It is helping us in our exports. 17:42 17 minutes, 42 seconds Great sir. Thanks a lot. Thank you. 17:49 17 minutes, 49 seconds Thank you. Next question is from the line of Madrisha from Safire Capital. Please go ahead. 17:56 17 minutes, 56 seconds Yeah. Hello. Uh good good evening. Uh am I audible? Yes. 18:01 18 minutes, 1 second Yeah. A few questions on the export. So you mentioned a lot of tailwinds that are happening on the export side. So any color on how the growth is going to be 18:09 18 minutes, 9 seconds like. So what is our current contribution from the export and how we're going to scale that up uh going forward? 18:17 18 minutes, 17 seconds Just a second. So our exports have close to around 9%. Uh so in the in our year 18:23 18 minutes, 23 seconds it was around 8 to 9%. We expect this to go by uh uh from 8 to 9% to around 20%. 18:34 18 minutes, 34 seconds There's going to be a major growth coming in on the export. Uh how do you see the margin? 18:40 18 minutes, 40 seconds Yeah. No, they have been they will be as similar to what margins we are making in domestic market. 18:47 18 minutes, 47 seconds Uh so the margins are similar to the realizations are better. Yeah. Yeah. Yes. Yes. Yes. 18:55 18 minutes, 55 seconds And uh also you the the long-term target of 2,000 crores that you have any any new verticals we're entering in or are we going to like expand the bucket? 19:07 19 minutes, 7 seconds I mean we'll be adding 40,000 tons to our 80,000 tons capacity of a new 19:14 19 minutes, 14 seconds product. So I mean it's it's going to take long. It's a basically five years. 19:20 19 minutes, 20 seconds Yeah. Uh but uh that kind of requires a 40 45% growth run rate. Are we like confident of doing that linearly over the next five four five years? 19:31 19 minutes, 31 seconds Yes we feel that I mean we feel that we'll be able to yeah the the efforts were on since last 19:39 19 minutes, 39 seconds two three years. In fact last two years have been a washed out judge. So you have from the context of so this this 19:45 19 minutes, 45 seconds activities are all started from FYI 23 onwards uh unfortunately because of 19:51 19 minutes, 51 seconds macro environments uh uh we we we underperformed in last two years uh but yes the efforts efforts were going on 20:00 20 minutes since F22 levels so you context of eight years correct and the new uh you said the raw material that you're going to add with 20:08 20 minutes, 8 seconds 40,000 metrics and so uh that kind of raw material has a high a better margin, a better realization. What sort of product are we looking at? 20:17 20 minutes, 17 seconds No, it's a very diff it's a newer raw material obviously part of your chemical stream. We'll be following a novel 20:26 20 minutes, 26 seconds process and we'll be doing it for the first time in India. 20:30 20 minutes, 30 seconds Okay. And and similar kind of customers are we targeting for that. So we'll target the existing customers to the growth on that as well. 20:37 20 minutes, 37 seconds Yeah. Yeah. Yeah. Yeah. Yeah. Okay. Yeah. That is a smart. Thank you. Thank you. 20:45 20 minutes, 45 seconds Thank you. Next question is from the line of Cheragaria from Budani Dance Limited. Please go ahead. 20:53 20 minutes, 53 seconds So few updates. What is the uh the custom duty right now sir? Is it the same as 15 and a half? 20:59 20 minutes, 59 seconds Yeah, it is 15 and a half right now. 21:02 21 minutes, 2 seconds Okay. And and the last time you highlighted that vegetable oil prices were up. So how how are they behaving now? Has they cool off? No, they are st 21:10 21 minutes, 10 seconds remain stable. They have remained stable what uh they where so they remain stable. 21:17 21 minutes, 17 seconds And on the import duty on the dime acid uh has that has that changed or is it same? 21:23 21 minutes, 23 seconds No, it's 7.5 7.5 to 7. Okay. And sir is the the new product that we are suggesting should come in FI 27 or FI 28. 21:34 21 minutes, 34 seconds uh 20 it should be around 27 28 somewhere that time and then slowly it'll pick up. 21:43 21 minutes, 43 seconds Okay. And sir, you think the the worst quarter for us is over now and we should bottom out now. Yes. Yes. Yes. Yes. 21:51 21 minutes, 51 seconds Sure. For sure. Okay. Thank you, sir. 21:58 21 minutes, 58 seconds Thank you. Next question is from the line of Sanjay Sha, an individual investor. Please go ahead. 22:05 22 minutes, 5 seconds Hello sir, am I audible? Yes, please. 22:09 22 minutes, 9 seconds Uh yeah. So my first question was about your uh margins. So for Q4 FI26 uh the revenue declined 3.2% YI but IDA 22:18 22 minutes, 18 seconds improved sharply to 6.84% from 3.64% in Q4 FI25. So I wanted to ask was this 22:26 22 minutes, 26 seconds margin recovery driven more by lower raw material cost reduced China import pressure or a better product mix and 22:33 22 minutes, 33 seconds also how sustainable is this improvement heading into the next quarter? It is based on better price realization 22:41 22 minutes, 41 seconds because uh re uh of uh less dumping happening from China. 22:47 22 minutes, 47 seconds That is one thing and secondly we I mean we see the same thing uh continuing even during this year. 22:57 22 minutes, 57 seconds Okay sir thank you that helps a lot. My second question was that the bypass fat product from PFAD and the new raw 23:04 23 minutes, 4 seconds material for niche specialty chemicals as both mentioned are your new product initiatives. So what is the current stage for these? Are they in lab trias 23:13 23 minutes, 13 seconds or commercial? Bypass set bypass fat uh we'll be putting in that plant in 23:19 23 minutes, 19 seconds operation next month and uh as regards the new product uh by uh end of uh Q2 we should uh uh start the plant. 23:31 23 minutes, 31 seconds So sir when should investors expect revenue contribution from Q2 only? 23:35 23 minutes, 35 seconds No, it will take I mean for bypass fat it can start from Q3 onward slowly but for uh the new product it will take uh 23:44 23 minutes, 44 seconds minimum two two and a half years because of validation and everything which is a long process. 23:51 23 minutes, 51 seconds Okay sir got it. Thank you. And my last question was regarding your dividend. So for this year you have recommended a dividend of rupees 1 per share which is 24:00 24 minutes down sharply from 7 and a half rupees per share last year. So is this reduction primarily a function of the temporary earnings drop or more of a 24:08 24 minutes, 8 seconds conservative long-term dividend policy especially temporary? No, no, no. It's basically because of temporary funding loss. 24:17 24 minutes, 17 seconds Okay. Good. Thank you so much. 24:23 24 minutes, 23 seconds Thank you very much. Next question is from the line of cable from G Investment. Please go ahead. 24:30 24 minutes, 30 seconds Hi sir, thank you for the opportunity. 24:32 24 minutes, 32 seconds Sir, my first question was regarding uh you mentioned that FI26 capacity was around 40 like uh you know the 24:40 24 minutes, 40 seconds production was around 45,000 tons and uh next you know we expect to do 75 to 80% utilization on a total capacity of 24:49 24 minutes, 49 seconds 80,000 tons. Is that understanding right? Yes. Yes. 24:53 24 minutes, 53 seconds Okay. So the stop line basically now should go back to where we were in 200 let's say FI24 FI25 kind of a thing 25:02 25 minutes, 2 seconds where yes and sir is this majorly because of lenolic demand lenolic acid demand coming back in the past industry is it 25:10 25 minutes, 10 seconds predominantly because of that no no it's basically less dumping happening from China so we'll be uh able 25:18 25 minutes, 18 seconds to sell more of material at the profitable price that's the only thing. 25:26 25 minutes, 26 seconds Okay. Okay. So, we were restraining from selling uh and utilizing our capacity because of extremely adverse pricing and now we are able to do that. 25:34 25 minutes, 34 seconds Yes. Exactly. Exactly. 25:37 25 minutes, 37 seconds Okay. Okay. Understood. And also on the top of this you said that pain sector has also kind of recovered a bit. So 25:45 25 minutes, 45 seconds that is Yeah. Somehow I mean we have a feeling that since last two months pain sector started looking up. 25:53 25 minutes, 53 seconds Okay. And while it's doing a bit better, do we also see, you know, like also realizations are getting better and margins are, you know, don't seem to 26:01 26 minutes, 1 second Yeah. Yeah. Yeah. Little bit. Yeah. A little bit better. Little bit better. So overall, we feel confident that we'll be able to breach 8% margin. 26:11 26 minutes, 11 seconds But sir with no Chinese let's say much lesser Chinese dumping and you know all the better capacity utilization shouldn't the margins actually go back 26:20 26 minutes, 20 seconds to what we used to do like 12 to 15% range or that is our dream yeah that is our dream obviously we'll work hard to achieve 26:28 26 minutes, 28 seconds that I mean we won't let go unturned to reach those levels we'll try our best 26:37 26 minutes, 37 seconds okay okay and sir how is our progress on isotheric acid I know like fairly good, fairly good, fairly good. 26:45 26 minutes, 45 seconds But what happened was because of the 50% duty thing, our uh US uh marketing was 26:53 26 minutes, 53 seconds on hold which has now started again and as this is going in cosmetics uh the 27:00 27 minutes timeline is very long I mean because they need to study lots of things. So approvals take uh once the sample goes 27:08 27 minutes, 8 seconds and approval takes minimum 6 8 months a year uh and then the first uh commercial shipment happens that also after first 27:17 27 minutes, 17 seconds shipment another 68 months is taken so it's a long thing it's I mean that's absolutely fine with us because I mean 27:25 27 minutes, 25 seconds it creates entry barriers for others in future so I mean that's absolutely fine as our product I mean uh product quality 27:34 27 minutes, 34 seconds is fine uh we are comfortable. Maybe if not today, tomorrow it will pick up. 27:41 27 minutes, 41 seconds Okay. So any early uh signs that we see because of tariffs coming off and this FDA obviously yeah people have started 27:49 27 minutes, 49 seconds asking for samples now they are so FI 2728 could be years where we could see meaningful ramp up for isic as well. 28:00 28 minutes Yes. Yes. 28:01 28 minutes, 1 second And that would be that is very high margin product as you mentioned. So that remains the theme. So that would be an additional lever for our margin improvement. 28:09 28 minutes, 9 seconds Yes. Yes. 28:11 28 minutes, 11 seconds Okay. Okay. Okay. Understood. That's that's about it. Thank you for answering the question. 28:19 28 minutes, 19 seconds Thank you. Next question is from the line of Sanjana Kat and individual and please go ahead. 28:29 28 minutes, 29 seconds Sanjana your line is unmuted. Please proceed with your question. Hello. Yes, you're audible. 28:36 28 minutes, 36 seconds Yes. Hi. Uh, I had a few questions. So, the US level playing field tariffs which are cited as a positive for the exports. 28:44 28 minutes, 44 seconds So, have you already commended or have we started receiving inquiries for restarting the US exports uh specifically on the diamond asset site? 28:53 28 minutes, 53 seconds We have started exports. In fact, commercial exports have started since 2 months though on small scale but we have 29:02 29 minutes, 2 seconds started Okay. So what would be the realistic timeline for let's say meaningful export volume to resume back? Uh I know 6 months max. 29:14 29 minutes, 14 seconds Okay. And uh also uh you had set a target for exports to reach almost 50% of the sales eventually. So currently 29:22 29 minutes, 22 seconds the exports they still appear to be very small part of the revenue. 29:27 29 minutes, 27 seconds And when we said 50% it was based on uh the current I mean products getting 29:34 29 minutes, 34 seconds exported from current 80,000 tons capacity and uh uh 40,000 of new upcoming capacity. So based on that we 29:43 29 minutes, 43 seconds had recommended so major is going to come from the new 40,000 tons capacity. 29:48 29 minutes, 48 seconds Okay. Got that. Uh so what would be like the current export percentage and what would they look like in like let's say 12 to 14 months? what would the export road map look like? 29:58 29 minutes, 58 seconds Currently, it's around 8 to 10%, we expect to reach anything above 20%. 30:04 30 minutes, 4 seconds Okay. And uh if possible, could you uh share like you mentioned the rupee depreciation as a tailwind for our 30:12 30 minutes, 12 seconds export competitiveness, right? So like how much does 1% move in your rupee impact your export realization? Do we have any data on it? Could you share? 30:21 30 minutes, 21 seconds No, no, no. Because see I mean it's not only one way because uh if the rupee depreciates our raw material also go up 30:29 30 minutes, 29 seconds little bit our energy cost also would in form of coal also would go up little bit but uh the export realization is much 30:39 30 minutes, 39 seconds higher than these two things. So we feel it's I mean uh devaluation helps us. No we have don't have exactly any figures for that. 30:47 30 minutes, 47 seconds Okay. Thank you so much sir. Thank you. 30:55 30 minutes, 55 seconds Next question is from the line of Ketan Archer, an individual investor. Please go ahead. 31:02 31 minutes, 2 seconds Hi, thank you for the opportunity. Uh sir, uh can you uh tell us in FY26? Uh what was the uh concentration in terms 31:11 31 minutes, 11 seconds of the industry where we supplied our products like you know paints being the highest and what are the next highest industry and so on and so forth. Please stop factory. 31:20 31 minutes, 20 seconds See basically our product goes in making of uh both the products are both the prime products go in making of inks 31:28 31 minutes, 28 seconds paints uh polyamides which are parts of epoxy hardeners and uh uh drilling fluids. 31:39 31 minutes, 39 seconds So I mean uh everything is fairly equal ratio for all the market is there. So I 31:46 31 minutes, 46 seconds mean that's not been any major uh uh concentration on a particular market or anything. Basically our capacity 31:54 31 minutes, 54 seconds utilization is going to be better because we are now finding it the selling of material is viable. Formally 32:02 32 minutes, 2 seconds it was because of Chinese competition it was none not viable. So we were not we were deliberately producing less and less. 32:13 32 minutes, 13 seconds Okay. Okay. And uh in terms of uh uh exports uh so what industries we would be uh exporting to in terms of 32:21 32 minutes, 21 seconds applications is it same industry same industry same yeah epoxy hardness and drilling fluids. 32:30 32 minutes, 30 seconds Okay. Okay. And uh in terms of the uh these uh neutrautical or the proper uh 32:37 32 minutes, 37 seconds where are we currently uh what was our contribution from this product? No, right now we are not uh uh doing much on 32:46 32 minutes, 46 seconds that business. That plant is uh uh uh on I mean not being utilized right now 32:53 32 minutes, 53 seconds because uh the vitamin E market is uh uh very I mean it's uh not doing that great. So we mean we are not doing business currently. 33:04 33 minutes, 4 seconds So once the demand uh reeves up we'll start that plant again. 33:10 33 minutes, 10 seconds Okay. Okay. Thank you so much. Those are my questions. Be sure 33:18 33 minutes, 18 seconds Thank you. Next question is from the line of Ahmed from Robo Capital. Please go ahead. 33:26 33 minutes, 26 seconds Thank you. Uh so my first question is on the 40,000 new capacity. Uh so my understanding is that the revenue from that will come after 2 years, right? 33:36 33 minutes, 36 seconds It will start coming after 2 years. 33:39 33 minutes, 39 seconds Yeah, correct. And what can be ballpark revenue? Any directional number on what can be revenue? 33:44 33 minutes, 44 seconds It's a high value. It's a fairly high value product. Uh so I mean 33:51 33 minutes, 51 seconds theoretically speaking, yes 800,000 crores, right? And also I I I think the margins will be better than our traditional I think much much better much better. 34:01 34 minutes, 1 second Yeah. Should be closer to 15 18% type of margins. Right. 34:04 34 minutes, 4 seconds Yeah. The margins look at this stage and uh on the when the we did the project and you've done the calculation the 34:12 34 minutes, 12 seconds margins look fairly robust right sir and uh I mean was there was some delay on this I mean we have not 34:19 34 minutes, 19 seconds been tracking the company for last few quarters and have just joined back after two quarters. So there was some delay on this right and uh could you throw some 34:28 34 minutes, 28 seconds light on the delay like what was No no no no yeah basically last if you really see our last two years have been 34:35 34 minutes, 35 seconds bad years uh because of major changes happening in the raw material prices uh 34:42 34 minutes, 42 seconds whereby the duties went up from 5 and a half% to as high as 27.5% on our raw materials and uh chumping 34:50 34 minutes, 50 seconds happening on our finished products from China so combined effect was uh that and so we were not going very aggressively 34:58 34 minutes, 58 seconds on uh expansion uh by taking unbut I mean uh by taking uh debt. So now once 35:06 35 minutes, 6 seconds things have stabilized we have started doing it right. Except so uh that you know the macro situation has now improved to your 35:14 35 minutes, 14 seconds uh favor I mean to your advantage now become more neutral now is that what yes right and and it requires some product 35:23 35 minutes, 23 seconds development I think is my if my memory so right that work has already been done we have 35:30 35 minutes, 30 seconds or we have lab unit we have pilot plant unit and now we have the plant 35:37 35 minutes, 37 seconds which we'll be commissioning in Q2 So right and after that so we will then uh be in touch with customers to get the 35:45 35 minutes, 45 seconds products approved right it probably has a longer cycle first step is first step is to stabilize the plant second step is uh to validate 35:53 35 minutes, 53 seconds our process third step is to get send out sample for approval so I mean that's the reason we are saying that it's going 36:02 36 minutes, 2 seconds to be two two and a half year cycle that's it from mine thank you and all the 36:11 36 minutes, 11 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question they press start N1. The next question is from the line of Keshk from counter cyclical PMS. 36:24 36 minutes, 24 seconds Please go ahead. 36:27 36 minutes, 27 seconds So just wanted a confirmation. You mentioned 16.5% custom duty is is on United States uh for export from India. 36:36 36 minutes, 36 seconds No no no no no that was on that is a raw material raw material import vegetable oil imports uh have 16.5% duty 36:44 36 minutes, 44 seconds in India okay got it and sir you mentioned 8% operating 36:52 36 minutes, 52 seconds margin is something that we can expect for this financial year yes yeah this should continue understood sir and sir what has to 37:01 37 minutes, 1 second happen for our margins to increase to the earthwide levels of let's say 11% I'm not going to 16 17% that we did in 37:10 37 minutes, 10 seconds 2022 2022 but what has to happen for our margins to at least go into double digits 37:17 37 minutes, 17 seconds I mean uh if this things continue like this volume growth happening and uh re 37:24 37 minutes, 24 seconds devaluation happening on ru's side uh and our energy saving initiative working 37:32 37 minutes, 32 seconds we can enter double digit Understood sir. And sir, exports you mentioned in FY27 itself we are expecting 20% of sales. 37:42 37 minutes, 42 seconds Yes. Yes. Okay sir. Understood sir. Thank you very much. 37:48 37 minutes, 48 seconds Thank you. Next question is from the line of Viral Sha from Philip Capital. Please go ahead. 37:56 37 minutes, 56 seconds Yeah. Good afternoon sir. Uh thanks for the opportunity. 38:00 38 minutes What was the warning that we did in FI25? So this year we take 44,000. What? Uh 54,000. 38:09 38 minutes, 9 seconds So in FI25 we did 54,000. Yeah. 54,000. 38:15 38 minutes, 15 seconds Yes. 54,000 sir. Yes. 504. 38:21 38 minutes, 21 seconds Okay. And sir, as you mentioned the Chinese company has started coming down or it has almost been negligible. So what was the Chinese company used to be earlier? 38:30 38 minutes, 30 seconds Chinese dumpings are dumpings. 38:34 38 minutes, 34 seconds I mean no basically they were selling at a lower price dimemer. 38:40 38 minutes, 40 seconds Yes, exactly. So my point is that only so what was the input that was coming from China? 38:45 38 minutes, 45 seconds Oh it's around uh coming around equal to what we were selling in domestic market around 800 to,000 tons per month. 38:57 38 minutes, 57 seconds Okay. And this is only for the one product or there are also other product you know which we are dealing with and there the China import was also there 39:05 39 minutes, 5 seconds only product. No this is the only product. 39:09 39 minutes, 9 seconds Okay. And you mentioned DR asset contributed 140 K to the total revenue. Yes. Yes. 39:16 39 minutes, 16 seconds Okay. Okay. And my second question as you mentioned export contribution to rise to 20%. So which geography you are more focused towards? 39:25 39 minutes, 25 seconds U US, Europe, Japan. 39:30 39 minutes, 30 seconds Okay. So even currently the US, Europe and Japan is contributing 8 cents and going this free geography will contribute to the higher revenue. 39:38 39 minutes, 38 seconds Yes. 39:40 39 minutes, 40 seconds Okay. And this 40,000 new product that you are talking about that we are going to commission in Q2. What's the capex that we have incur for that? 39:50 39 minutes, 50 seconds uh or I mean it the first stage cat is around uh 20 or 25 crores what we have coming done. 40:00 40 minutes So this will add to the 30,000 t capacity or maybe much lesser. 40:05 40 minutes, 5 seconds No no no no it will be sorry it will uh will add up as the demand grows. 40:13 40 minutes, 13 seconds So initially will start with lesser capacity uh as you are mentioning. Exactly. Exactly. Exactly. 40:19 40 minutes, 19 seconds So this will be how much of them? 40:23 40 minutes, 23 seconds Uh it will I mean we it should be around 8,000 tons. 40:28 40 minutes, 28 seconds Okay. So maybe by within next year once we get our approval and uh customer uh you know side we will be you know touching almost 40,000 t capacity. 40:38 40 minutes, 38 seconds Yeah. I mean because I mean overnight you cannot uh expect uh to penetrate the market easily. I mean there is no way 40:46 40 minutes, 46 seconds you can dismand the competitors. So I mean we expect that within 5 years we'll be working uh we'll be able to reach 40,000 utilization. 40:58 40 minutes, 58 seconds Yeah. You mention five years. Yes. 41:02 41 minutes, 2 seconds Okay. So within maybe next 5 years maybe 40,000 will give us 800 to,000 cr revenues. Yes. Yes. Yes. 41:11 41 minutes, 11 seconds Okay. In the paint side since we have a larger user industry particularly paint and paint there are also new players 41:18 41 minutes, 18 seconds which are reversed. So are we also supplying to those players? 41:21 41 minutes, 21 seconds Yes. Yes. We are supplying to all including 41:29 41 minutes, 29 seconds even JSW uh GSW is on water in waterbased paints. 41:36 41 minutes, 36 seconds This is a different segment. 41:40 41 minutes, 40 seconds Okay. Okay. And so lastly on the working capital side if I look at last two years our inventory may have gone up uh you 41:48 41 minutes, 48 seconds know maybe uh substantially. So is there any chance of improving our working capital circle going to 41:57 41 minutes, 57 seconds no working capital is expected to remain uh at around uh between 100 to 120 days. 42:05 42 minutes, 5 seconds Okay. So inventory days could also remain at the higher level because it used to be around 50 60 days. has got to 1995 days sir. 42:13 42 minutes, 13 seconds Yes. 42:15 42 minutes, 15 seconds Yeah. If the volume uh increases it will uh I mean uh since the denominator will improve it will in uh it will improve a 42:23 42 minutes, 23 seconds bit from the current level of 120 days. 42:30 42 minutes, 30 seconds Oh okay okay. Thank you so much from my 42:37 42 minutes, 37 seconds Thank you. Next question is from the line of Chiat from Budwani Finance. Please go ahead. 42:45 42 minutes, 45 seconds I wanted to understand uh on this uh you know you said that the pressure from the Chinese import has come down. Uh sir, have you been able to figure out why has 42:54 42 minutes, 54 seconds it happened? H no no no that's not possible but overall uh 43:01 43 minutes, 1 second Chinese companies in all practically all the products have reduced uh I mean something has happened whereby I mean 43:09 43 minutes, 9 seconds all the products what they were dumping is somehow going down so has there has there been any export 43:16 43 minutes, 16 seconds uh restriction on on their dumping been put there any any idea sir no no but quite a your products uh 43:25 43 minutes, 25 seconds whatever the export incentives Chinese government was giving has been removed which was as high as 15%. 43:34 43 minutes, 34 seconds In lots of I mean uh so I mean obviously it's because of that only the Chinese would have done that and they were 43:42 43 minutes, 42 seconds selling at a price which was I mean too low for uh I mean so it must they must be making losses. 43:50 43 minutes, 50 seconds Okay. And sir uh when we supply you know most of we supply to uh all the paint so we don't have restrictions to supply the 43:58 43 minutes, 58 seconds material to any paint company right we are not bound no no no okay and so the last thing is what is the capeex for 27 and 28 44:07 44 minutes, 7 seconds uh this year there won't be any cex except for anything related to energy saving 44:15 44 minutes, 15 seconds okay that will be how much sir no I mean that is whenever the uh things come up because we have just finished one energy audit. Second energy audit is 44:24 44 minutes, 24 seconds happening. If the stat is less than 4 years, we'll go for it. 44:28 44 minutes, 28 seconds Okay. And so for 28, what would be the number? 44:32 44 minutes, 32 seconds I mean that if everything depends on 28 for uh what happens to our uh new product 44:39 44 minutes, 39 seconds if that picks up we'll go for investment otherwise not. Okay. 44:45 44 minutes, 45 seconds Current business doesn't require any capex. 44:48 44 minutes, 48 seconds Right? Right. So now we are just focused on improving the top line, right? Yes. Exactly. Okay sir. Okay. Thank you. 44:59 44 minutes, 59 seconds Thank you. Next question is from the line of Kesha from counter cyclical PMS. 45:05 45 minutes, 5 seconds Please go ahead sir. 45:07 45 minutes, 7 seconds So I'm trying to understand that when we did our peak revenue in let's say F23 of 45:14 45 minutes, 14 seconds roughly 650 K. So sir that time what was the uh sales volume that we did roughly? 54,000. 45:22 45 minutes, 22 seconds No sir 54 was for fi 25 or fi 23 also it was 54,000 only. 45:27 45 minutes, 27 seconds Uh so which year you are asking sir I'm asking for fi 23 when we did peak revenue of 54,000 54 fi 54,23. 45:39 45 minutes, 39 seconds Okay. So it was so so basically our volume was flat at around 54,000 for till FI25 and only last year it fell to 44,000. 45:50 45 minutes, 50 seconds Yes. 45:51 45 minutes, 51 seconds No in between FI 24 it has gone up to 63,000 also. 45:57 45 minutes, 57 seconds Okay. 63,000. Okay sir. But it doesn't reflect in the revenue number. So I'm assuming the uh prices must have gone 46:05 46 minutes, 5 seconds down and that is why despite the revenue going up the uh uh uh uh despite the volumes having gone up in FR24 the 46:13 46 minutes, 13 seconds revenue has actually come down year on year. Yes. Yes. Yes. 46:18 46 minutes, 18 seconds Now sir uh what I'm trying to understand is that since you mentioned that Chinese government must be giving them some 46:26 46 minutes, 26 seconds incentive that's why they were selling at the price which apparently looks as a lossmaking prices but now that the 46:33 46 minutes, 33 seconds dumping has stopped and prices have gone up by 8 10%. So don't you think that now basically even if that export incentive 46:42 46 minutes, 42 seconds from 15% we don't know if it has become zero or maybe uh something like 5% or something in that vicinity so so the 46:50 46 minutes, 50 seconds point is that can't that dumping uh restart because after all they must be having capacity so now where is that 46:57 46 minutes, 57 seconds capacity going I mean maybe the sense would have prevailed that it doesn't make any sense to lose 47:05 47 minutes, 5 seconds money that's been I mean that is that is the whole possibility that is and I mean Chinese 47:13 47 minutes, 13 seconds government can reintroduce that 15% infantry. I mean that is not in our end but I mean I don't think so I mean for 2 47:22 47 minutes, 22 seconds years they create that game. I I don't think uh they'll be able to do more and 47:29 47 minutes, 29 seconds that also during this uh current geopolitical situation. 47:35 47 minutes, 35 seconds Yes sir. I'm absolutely with you on this matter. But my only point is that now that prices themselves have bounced 47:41 47 minutes, 41 seconds back. So now even without additional Chinese government support, can't the Chinese exporters in light of the 47:50 47 minutes, 50 seconds increased prices, can't they restart like dumping at the current price? 47:55 47 minutes, 55 seconds That's not an problem. That's not a problem for us because at this price we are happy. 48:01 48 minutes, 1 second Understood, sir. And sir now the thing is that whatever uh refinery byproduct we require can't we import that 48:09 48 minutes, 9 seconds byproduct from other geography? No, historically this uh because of the trade component these byproducts they 48:18 48 minutes, 18 seconds historically nowhere in world are being traded exported. This is normally used wherever it's generated. It is consumed 48:26 48 minutes, 26 seconds domestically only sir. And what is the pricing arrangement that we have with the refineries for 48:33 48 minutes, 33 seconds their byproducts which is our it's I mean the it's a buyer basically it's driven by market it's a commodity. 48:42 48 minutes, 42 seconds Okay. So so is it like monthly revision or quarterly yearly like daily revision daily revision. 48:51 48 minutes, 51 seconds enter in any long-term contracts. It's just like a commodity. 48:56 48 minutes, 56 seconds Let's say now if let's say these uh seed oil prices come down then the raw material prices will also come down. 49:04 49 minutes, 4 seconds Yes. 49:06 49 minutes, 6 seconds Okay. Understood sir. And sir what about the end product prices that we have with our customers like let's say paint industry and so on. Is it a monthly? 49:15 49 minutes, 15 seconds It's a it's a by sell again maximum it's one month. 49:20 49 minutes, 20 seconds Okay, understood sir. So now we have I'm sorry to interrupt. I'm sorry to interrupt. Please rejoin for more questions. 49:28 49 minutes, 28 seconds Thank you. 49:30 49 minutes, 30 seconds Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly 49:38 49 minutes, 38 seconds limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. 49:45 49 minutes, 45 seconds Next question is from the line of Ketan Archer, an individual investor. Please go ahead. 49:51 49 minutes, 51 seconds Hi, thanks for the followup. Uh sir, uh correct me if I'm wrong. Uh I I heard that we also import some raw materials. Is that correct? 49:59 49 minutes, 59 seconds No, we have option. 50:03 50 minutes, 3 seconds We don't import right now. We are not importing. We are not. 50:08 50 minutes, 8 seconds Yeah. Yeah. against export we can import but we are not importing because I mean it's not uh viable compared to the 50:17 50 minutes, 17 seconds material what we are getting from mystically right right so uh I I think this was in conversation with one of the earlier 50:25 50 minutes, 25 seconds participants where he was mentioning that the uh you know the devaluation of rupee uh we should actually be benefited 50:33 50 minutes, 33 seconds because then you know we we earn more in INR terms when we export and I thought you at that point because we also import so that benefit is not there. No, no, 50:41 50 minutes, 41 seconds no, no. I I I didn't say import. I said raw material. My words were raw material, not import. 50:50 50 minutes, 50 seconds But raw material we uh buy domestically only, right? Yes. Yes. 50:56 50 minutes, 56 seconds Okay. So still if if the INR is getting more devalued, we are not benefited so much. Is that understanding correct or 51:04 51 minutes, 4 seconds no? Obviously we are getting not 100 to the extent of 100% of the valuation 51:12 51 minutes, 12 seconds partially we'll be 100% getting I mean partially we'll be getting benefited in our exports yeah but in a way our raw material will also increase since the 51:21 51 minutes, 21 seconds I mean devaluation is I mean in both ways no India imports vegetable oils so the price of vegetable oil to that 51:29 51 minutes, 29 seconds extent is what increase to that extent are uh my product our raw material cost would go up. So not for us for any company. 51:41 51 minutes, 41 seconds Okay. Understood. Understood. Sure. Thank you so much. Thank you. 51:47 51 minutes, 47 seconds Thank you ladies and gentlemen. We will take this as the last question. I now hand the conference over to the management from Triam Organics Limited for closing comments. 52:00 52 minutes Yeah. Uh thank you very much uh uh for attending the conference. uh will we meet in the next quarter? 52:06 52 minutes, 6 seconds Thank you. Thank you. 52:10 52 minutes, 10 seconds Thank you very much on behalf of Fairium Organics Limited. That concludes this conference. Thank you all for joining us today and you may now disconnect your line.