Galaxy Surfactants Limited — Q4 FY26

Galaxy Surfactants Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=oQvzvbikphA Published: 1d ago

0:01 1 second Ladies and gentlemen, good day and welcome to Galaxy Sectants Limited Q4 NFI26 earnings conference call. This 0:09 9 seconds conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. 0:20 20 seconds These statements are not the guarantees of future performance and involve risks and uncertainty that are difficult to predict. As a reminder, all participant 0:29 29 seconds lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:37 37 seconds during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being 0:45 45 seconds recorded. I now hand the conference over to Mr. Ketwanjen, managing director of Galaxy Sense Limited. Thank you and over to you sir. 0:56 56 seconds Thank you. 0:58 58 seconds A very good afternoon ladies and gentlemen. 1:02 1 minute, 2 seconds Thank you for joining us today for our fourth quarter and full year FYI 26 earnings call. 1:10 1 minute, 10 seconds Before delving into our performance on the business fund and regional updates, it is important for me to set the broader context. 1:21 1 minute, 21 seconds The operating environment during the year and particularly the last leg of the final quarter that is Q4 of this of 1:29 1 minute, 29 seconds the last financial year was shaped by series of external disruptions that impacted global supply chains, trade flows and customers auditing behavior. 1:39 1 minute, 39 seconds West Asia war introduced a prolonged period of uncertainty across global supply chains, trade routes and energy 1:46 1 minute, 46 seconds markets. What was initially perceived as a short-term disruption extended well into and beyond quarter 4 with visible 1:55 1 minute, 55 seconds second order impacts on logistics, feed stock availability, rising volatility and customer ordering behavior, particularly across our export markets. 2:07 2 minutes, 7 seconds Disruptions and rerooting of seaf freight resulted in delays in inbound raw material as well as outbound export shipments for an Egypt facility. Port 2:16 2 minutes, 16 seconds congestion and vessel availability constraints le led to extent transit times adversely impacting our dispatches. 2:26 2 minutes, 26 seconds Over recent weeks, the logistic situation has gradually begun to stabilize with shipments being directed through alternate ports. While 2:34 2 minutes, 34 seconds congestion at ports has reduced, transit times remain elongated and our team continues to be actively managing the situation through tighter planning and 2:43 2 minutes, 43 seconds close coordination with our customers and vendor partners. 2:48 2 minutes, 48 seconds On the supply chain front, due to the impact of the geopolitical situation, price of these stocks have increased significantly. 2:56 2 minutes, 56 seconds This sharp and simultaneous escalation across input raw materials created a highly challenging operating environment 3:04 3 minutes, 4 seconds exerting a need for repricing at major customer levels impacting overall Q4 volumes. 3:14 3 minutes, 14 seconds Coming to our regional performance and key highlights, India remained relatively resilient supported by steady demand across Taiwan and non-Tyrone 3:23 3 minutes, 23 seconds accounts. India volumes grew 8% year-on-year driven by a 3% growth in 3:30 3 minutes, 30 seconds performance and more than 27% growth in specialy volumes on a year-to-ate on a year-to-ate basis. Despite reformulation 3:39 3 minutes, 39 seconds pressures from a key tier one customer that impacted performance segment, strong growth in non-tier one and diet to consumer 3:46 3 minutes, 46 seconds accounts fully offset these volume losses. In specialty, we are pleased to report a 27% growth on on an annual 3:53 3 minutes, 53 seconds basis delivering consistent progress in line with our strategy 2030. 3:59 3 minutes, 59 seconds In contrast, the Amit region remained challenging for reasons out outlined earlier with volumes declining 15% yearon year in Q4. 4:09 4 minutes, 9 seconds This weakness was concentrated in the later part of the quarter and was largely given the last disruptions, raidal availability constraints, 4:17 4 minutes, 17 seconds customer repricing pressures and more cautious procurement behavior amidst heightened political geopolitical uncertainty. 4:27 4 minutes, 27 seconds The rest of the world region witnessed mixed trends with volumes declining 7% year on year in Q4 while delivering a 4% 4:34 4 minutes, 34 seconds growth on a fullear basis. The Q4 volume shortfall was partly influenced by delays in export shipments to Europe and 4:42 4 minutes, 42 seconds LAN driven by sudden spike in freight rates and cautious buying behavior at the customer. In contrast, the Americas emerged 4:51 4 minutes, 51 seconds as a relative bright spot during the quarter following following improved clarity and partial reversals 4:59 4 minutes, 59 seconds on tariff related developments. Demand momentum strengthened sequentially with volumes improving over Q3. Importantly, 5:07 5 minutes, 7 seconds our specialty pipeline in the US has been reinitiated post tariff reversals and we are seeing encouraging traction and strong growth potential in premium specialty products. 5:18 5 minutes, 18 seconds Coming to financial performance for the quarter for Q4 FI26 IBIDA stood at 122 5:24 5 minutes, 24 seconds crores compared to 135 crores in the earlier year quarter 4 with thea per 5:32 5 minutes, 32 seconds metric t for Q4 FI26 at 20,114 per metric t versus 21,715 per metric t in 5:40 5 minutes, 40 seconds Q4 FI25. This performance was largely driven by effective pass through of raw material prices, trade cost increase to 5:47 5 minutes, 47 seconds customers, improved mix and specialty segment in Q4 post reduction of reciprocal tariffs in US. Consistent 5:55 5 minutes, 55 seconds better performance of our tryare business in the US that is a premium specialy segment and discipline cost control measures 6:03 6 minutes, 3 seconds at various operation areas and at our subsidiaries. 6:07 6 minutes, 7 seconds Moving to an update on innovation. In this quarter, we further advance our innovation agenda with the launch of gals soft dumitic in cosmetics Paris and 6:16 6 minutes, 16 seconds next generation mactant which is self thickening amino acid based subactant that simplifies formulation by seamlessly combining gentleness, 6:24 6 minutes, 24 seconds clarity, foam and process efficiency into a single system. It delivers skin care. It sorry, it delivers skin 6:31 6 minutes, 31 seconds cleansing with with a low pH compatibility and is ideally suited for sensitive applications such as baby care, feminine hygiene care, scalp care and anti-aging solutions. 6:43 6 minutes, 43 seconds To conclude, while recent supply and deceptions have created near-term challenges, they also present an opportunity for us to remain agile and 6:50 6 minutes, 50 seconds sharpen our focus on timely price passroughs to our customers. We continue to remain confident with the 6:58 6 minutes, 58 seconds successful strength of our business underpinned by resilient customer relationships, a diversified geographic footprint, a strong India franchise and a disciplined operating approach. 7:10 7 minutes, 10 seconds Barring any new unforeseen events, we are confident that performance in the coming quarters will improve sequentially. 7:18 7 minutes, 18 seconds Thank you ladies and gentlemen for your continued personal support. I now open the floor for questions. 7:27 7 minutes, 27 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 7:34 7 minutes, 34 seconds star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you 7:41 7 minutes, 41 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 7:48 7 minutes, 48 seconds wait for a moment while the question queue assembles. 8:08 8 minutes, 8 seconds The first question is from the line of Aditakan from Smith Institutional Equities. Please go ahead. 8:15 8 minutes, 15 seconds Yeah, thank you sir for the opportunity. 8:18 8 minutes, 18 seconds Uh I have a couple of questions. Uh so first question is to the specialtity side. Uh so you mentioned in your presentation that uh so t reversals we 8:27 8 minutes, 27 seconds all know and from uh revenue traction in the specialtity products has led to improvement in your specialtity side but 8:34 8 minutes, 34 seconds sir when we look at the numbers on quarteron quarter basis it is flat only some 493 cr topline large quarter this 8:41 8 minutes, 41 seconds quarter 498 cr uh also sir you mentioned into your Indian business also some strong traction is led by speciality 8:49 8 minutes, 49 seconds care products I believe India is the speciality mix in India is relatively smaller only. So how what was the mix 8:57 8 minutes, 57 seconds earlier? How much mix has changed in India and why this uh improvement in your uh America's business has not led to speciality growth quarter on quarter? 9:10 9 minutes, 10 seconds Yeah. First of all quarteron quarter okay the it is essentially due to the mix of the speciality portfolio in that 9:17 9 minutes, 17 seconds quarter in quarter 4 in US. Uh so that's one of the reasons okay so uh it's a question of what products that we 9:25 9 minutes, 25 seconds started moving out post the tariff reversal okay uh so it's it's only the mix impact okay but as you see moving 9:32 9 minutes, 32 seconds forward okay uh things will start looking better because sequentially that's what explains as to why it doesn't reflect the volume growth 9:39 9 minutes, 39 seconds doesn't reflect in terms of the uh contribution growth with regard to your 9:46 9 minutes, 46 seconds uh next question on India India as you said it's Because as I said in my opening remarks uh in terms of the way 9:54 9 minutes, 54 seconds that we have been able to uh grow with the D2C franchise, direct to consumer brands franchise where you have a good 10:02 10 minutes, 2 seconds amount of uh uh special ingredients that growing. So although the base in India is small of special ingredients okay but 10:09 10 minutes, 9 seconds then uh there is a significant momentum that we see that is gathering in terms of the direct to consumer brands uh 10:16 10 minutes, 16 seconds increasing their uh uh presence significantly. 10:22 10 minutes, 22 seconds Got it. uh slightly a longer term onto the speciality mix and when we look the numbers uh over the last few years and 10:30 10 minutes, 30 seconds look around so 35 to 40% range only over the longer term sir how you see like this mix to improve by 2030 what what 10:39 10 minutes, 39 seconds could be the mix and secondly last quarter also you mentioned like some customers in in US has highlighted some demand related problem offsetting that 10:47 10 minutes, 47 seconds impact and considering the current ramp up in specialtity how things will look over the longer term. 10:53 10 minutes, 53 seconds Yeah. Over the longer term, see as our strategy is to grow both the segments of performance affectance and specialy ingredients because we we are very clear 11:02 11 minutes, 2 seconds that skewing towards either of the say skewing only towards specialy ingredients is not going to be making us very relevant for our customers because 11:10 11 minutes, 10 seconds they want we expect that we are able to serve them with the basket of all the ingredients in the for the HPG segment. 11:16 11 minutes, 16 seconds But with the way that we are growing a specialy ingredients portfolio, I would probably say it'll it'll keep swinging 11:23 11 minutes, 23 seconds between the 65 35 60 40 70 30 depending on how both these legs start uh uh you 11:31 11 minutes, 31 seconds know how both these legs start performing. Uh so even by 2031 I do not see it's going 11:38 11 minutes, 38 seconds going uh say uh probably in the zone of 6040 6535 that's what I look at it. 11:45 11 minutes, 45 seconds Okay. Got it. Uh so my third question is on to the raw material prices fatty alcohol. So last quarter we had seen a 11:52 11 minutes, 52 seconds dip of 8%. And again sir this quarter uh prices has come. Uh so what is the strategy like uh sir you have also 12:01 12 minutes, 1 second mentioned in in in your last quarter that with rising of material prices definitely uh so there could be a a demand destruction which which could 12:09 12 minutes, 9 seconds happen and it would be also difficult for us to pass on the prices. What is the outlooks are going on? how much we can pass on with this rising raw 12:16 12 minutes, 16 seconds material prices and how much uh the downtrading can even happen now further like which you seen in the last quarters that could continue going ahead. 12:27 12 minutes, 27 seconds Yeah, the first correction is I never said that it'll be difficult to pass on increased prices. I only said that you 12:35 12 minutes, 35 seconds can't pass on prices every week that it increases because customers expect that you have some price stability. So I will have a lag effect. So that can have an 12:44 12 minutes, 44 seconds implication because if a price increases today I pass it on after one month a lag effect but saving that I think there is a very clear way that our uh you know 12:53 12 minutes, 53 seconds relationship with customers ensues that they understand okay when we go for a price increase that there is a clear rational and transparency so that's not 13:00 13 minutes an issue but you can go to them every week. So having clarified that uh today if you see uh you have raw materials 13:09 13 minutes, 9 seconds across like like today pet stocks have gone up significantly. Uh forget about going up even availability is a 13:17 13 minutes, 17 seconds challenge. So the question here today is not about uh uh you know whether chemical has gone up because that was 13:24 13 minutes, 24 seconds the fact till say last quarter. Now everything has gone up significantly. In fact, petrochemical prices based sweet feed stocks have gone up much more than 13:31 13 minutes, 31 seconds the chemical feed stock prices. Okay, so that's the situation today. But the current challenge is in terms of how 13:39 13 minutes, 39 seconds well okay we are able to manage the supply side in terms of ensuring that we have uninterpreted production because as 13:46 13 minutes, 46 seconds of now we see that demand is healthy and uh it's uh it's important that we manage supply side uh very very judiciously and 13:55 13 minutes, 55 seconds in a very agile manner which my team is doing a fantastic job and uh I'm sure that uh that's going to aid us in terms 14:02 14 minutes, 2 seconds of the way that we report performance in the coming months. 14:07 14 minutes, 7 seconds Okay. So, just one last question. Uh, sir, how much competitive we would be uh versus Labsa into the group chain? The 14:14 14 minutes, 14 seconds current prices of LPSA versus the oliochemicals prices of two $800 patty alcohols like I just want to know how much difference today could be there and 14:23 14 minutes, 23 seconds what are the reasons why consumer could shift to the other chain. Second question sir, considering the current RN prices $2,800 per ton, what could be the 14:32 14 minutes, 32 seconds volume growth? Uh is there any change into the volume growth guidance for 27 28 14:40 14 minutes, 40 seconds prices today? Forget about prices they have gone up significantly. They have more than doubled. Okay. And the issue is in terms of availability. Okay. 14:48 14 minutes, 48 seconds Whereas your prices also have gone up but not to the same with the same to the same extent. So yes. So the now when our 14:56 14 minutes, 56 seconds customers are looking at I think their their requirement is how do they keep their formulations available on the shelves. Okay. So they're doing various 15:04 15 minutes, 4 seconds ways to ensure that they are able to have their products. Okay. Finding a space on the shelf. They don't want to lose any product. So essentially we need 15:14 15 minutes, 14 seconds to m ensure that we are able to serve them well. 15:17 15 minutes, 17 seconds As regards the uh you talked about your alcohol pes. Can you repeat that question? 15:25 15 minutes, 25 seconds So fatty alcohol so considering the current prices of fatty alcohol what could be the volume growth findings we are looking 15:32 15 minutes, 32 seconds yeah so what what we seeing is that uh I don't want to be talking anything specifically moving into uh the year 15:40 15 minutes, 40 seconds because it is too premature to be talking about that but one thing that I am able to see very clearly is that uh uh if I look only at say Q1 okay because 15:49 15 minutes, 49 seconds there's no way that I can look beyond that but uh Q1 we are looking you know you'll be able to we'll be delivering 15:57 15 minutes, 57 seconds close to the higher end of the volume uh guidance range of 6 to 8%. Okay. And uh IDIDA as well at the higher end of the uh range of 90 to 21,000 per metric. 16:10 16 minutes, 10 seconds So this guidance is for Q1 or like for full fiscal you mentioned for Q1 right? 16:14 16 minutes, 14 seconds Yes Q1 but then I I would like this to if the current scenario continues the way it is. Okay, that's my uh that's my 16:23 16 minutes, 23 seconds rider. If nothing it need not improve but it should not worsen. If this is the situation what we have in Q1 continues, 16:30 16 minutes, 30 seconds I think uh we'll also be able to deliver that for the full year. But we all know that the current situation it doesn't give us the luxury of looking beyond one 16:39 16 minutes, 39 seconds quarter. So I would suggest that probably we'll have a better clarity okay in the next call. Okay. When we discuss on Q1 results. 16:48 16 minutes, 48 seconds Got it sir. Thank you sir. better process. 16:55 16 minutes, 55 seconds Thank you. Next question is from the line of Rohit Nagaraj from 361 Capital. Please go ahead. 17:02 17 minutes, 2 seconds Uh thanks for the opportunity. Uh so first question is in terms of the Egypt facility. So currently how is the 17:10 17 minutes, 10 seconds situation out there uh both in terms of the availability of raw material logistics and uh even on the customer 17:18 17 minutes, 18 seconds side uh in terms of the demand uh which is you know in Egypt and around Egypt. 17:26 17 minutes, 26 seconds Yeah. So first is I think one thing that I can clarify one thing I need to clarify is that as far as the African 17:34 17 minutes, 34 seconds Middle East Turkey market is concerned uh we do not see demand as a challenge. 17:38 17 minutes, 38 seconds If you see even last quarter, but the thing that impacted our African media business and more so our galaxy chemical 17:46 17 minutes, 46 seconds Egypt business was I think the entire march was disrupted because all the materials that were to be coming in got 17:55 17 minutes, 55 seconds stuck at various trans shipment points and the team was essentially uh working uh you know aggressively to look at how 18:04 18 minutes, 4 seconds we are able to get those materials released and these to our factory uh it started uh uh bearing results all the 18:12 18 minutes, 12 seconds efforts only from the first week of April. So I think uh uh say post middle April middle of April I think they uh 18:20 18 minutes, 20 seconds Egypt operations have got restored okay uh to a significantly superior level and they have started uh catering to all the 18:28 18 minutes, 28 seconds pending orders that were there that they couldn't serve in the month of March. So that's that's the situation today. The issue is not about demand side. I think 18:35 18 minutes, 35 seconds more on the uh availability of raw materials to take care of supplies that impacted mass but then into April things 18:43 18 minutes, 43 seconds started improving and we expect uh that uh you know uh May and June should be significantly superior where we are able to run our operations uninterrupted. 18:54 18 minutes, 54 seconds Sure. Uh the second question is you just spoke about Q1 guidance in terms of volume growth. uh now is it because that 19:04 19 minutes, 4 seconds uh these uh supplies are constrained and we have the material to supply to the customers. Uh that's the reason we are 19:12 19 minutes, 12 seconds confident that 6 to8% volume growth is possible given that uh till uh in most of the geographies there are challenges 19:21 19 minutes, 21 seconds in terms of some challenges in terms of demand and some challenges in terms of availability. So the volume guidance is predominantly based on the supply constraints and availability at our end. 19:33 19 minutes, 33 seconds Is that the right uh way to look at it? 19:36 19 minutes, 36 seconds No, that's not the only reason or the major reason. If you look at it uh in our volume growth 19:44 19 minutes, 44 seconds guidance, I've always been saying that your India should come back to its uh robust growth okay of 8 to 10%. If you 19:53 19 minutes, 53 seconds see that happened in the last in the in quarter 4. So that momentum is continuing and that growth happened because the GSC rationalization started 20:02 20 minutes, 2 seconds showing results in last quarter and you'll see all our customers also have spoken about uh 4 to 6% growth. Okay. 20:09 20 minutes, 9 seconds And in line with that we have also reported 8% growth. Okay. So we expect that also to continue because we don't 20:16 20 minutes, 16 seconds see uh any demand channels at least in Q1 as far as India market is concerned. 20:21 20 minutes, 21 seconds Okay. Second, we also see our uh the in Americas uh you know we had uh uh the implication on uh because of the tariff 20:30 20 minutes, 30 seconds in terms of uh our business. I think that has got resolved and then we have started uh reviving okay business with 20:37 20 minutes, 37 seconds our customers that also will aid and more importantly I think you'll have a met Africa Middle East Turkey through uh 20:43 20 minutes, 43 seconds the sort of uh uh degrowth that was happening in terms of on the supply side significant supply 20:51 20 minutes, 51 seconds due to the supply side factors that also will certainly improve significantly in Q1. 20:59 20 minutes, 59 seconds Got that. So just one clarification did we recognize any project income during this quarter and if so what was the quantum? 21:07 21 minutes, 7 seconds So we we we did recognize but nothing significant that's the reason why we are not reporting that separately but yes the project is progressing well and we 21:15 21 minutes, 15 seconds do based on completion level we recognize but that's not something significant or material as I call it. Yeah. 21:23 21 minutes, 23 seconds Thanks a lot and all the best sir. 21:28 21 minutes, 28 seconds Thank you. Before we take the next question, a reminder to all the participants. If you wish to ask a question, please press star N1. 21:37 21 minutes, 37 seconds We will take our next question from the line of Sanjay chain from ICIC security. Please go ahead. 21:44 21 minutes, 44 seconds Yeah, good afternoon. Thanks for taking uh a couple of questions. Uh first on 21:51 21 minutes, 51 seconds the US market in the previous call you sounded quite bullish uh post the uh tariff deal announced. Uh where are we 22:00 22 minutes now? Has this midish situation impacted the demand uh the supplies which we were planning? Uh any change in the uh outlook on the US side? 22:13 22 minutes, 13 seconds See first of all uh that the demand side which has started getting uh which is we started recouping post the uh uh tariff 22:22 22 minutes, 22 seconds uh thing getting taken care I think that is intact. Uh the supply started very well okay from Jan I think we had a 22:30 22 minutes, 30 seconds temporary impact in March because of the suddeness with which the you know west Asia crisis happened. uh it took us 22:38 22 minutes, 38 seconds almost two to three weeks in March to be able to resolve that and I think things have resumed after that. So this wizard crisis as of now there is no impact we 22:47 22 minutes, 47 seconds are seeing on the demand side and the supply side implication was for a brief period in March which uh has gotten taken care of. 22:57 22 minutes, 57 seconds So, so from next quarter onwards is it fair to assume that the US business which we were planning uh the acceleration uh that should show up some 23:06 23 minutes, 6 seconds result because RO we have declined in this quarter. Um so which geography apart from US conservatives in RO? 23:16 23 minutes, 16 seconds See the last quarter decline in your RO was because as I said we had a good amount of dispatchers. We had orders but 23:25 23 minutes, 25 seconds we couldn't dispatch into Latin America into Europe. Okay. Because of the sudden increase in freight rates we also had to be talking to and negotiating with 23:33 23 minutes, 33 seconds customers for a repricing because the the rates had gone up so significantly that there's no way that you could have dispatched the material. So that took a 23:40 23 minutes, 40 seconds good portion of mass. So they're all the backlog is getting clear. Okay. The uh other thing is in terms of our uh uh the 23:50 23 minutes, 50 seconds America business reflecting okay in uh in terms of results in the coming quarters. I do see that will start happening. 23:58 23 minutes, 58 seconds So when we say Cuban guidance in the volume this all should help us to grow much faster than the normal level. 24:05 24 minutes, 5 seconds Right. 24:08 24 minutes, 8 seconds No despite see I was just looking at the trajectory um till Q3 our RO was growing 24:16 24 minutes, 16 seconds at double digit correct suddenly uh in Q4 uh we saw a decline of high single digit now if we assign that 24:25 24 minutes, 25 seconds entire double digit to a decline uh say uh 15 20% of volume is which happened because of a logistical issue repricing 24:34 24 minutes, 34 seconds renegotiation and all that will get recouped in Q1. Right? So in Q1 ideally assuming all other things things 24:42 24 minutes, 42 seconds remaining same and we are able to uh fulfill the demand which we uh delayed in the Q4. Q1 on a RO should look at significantly better. 24:52 24 minutes, 52 seconds Yes, you're right. But then when I'm giving you the guidance, I'm also looking at uh certain uh situations that 25:00 25 minutes I may because I don't want to be guiding uh inappropriately. That's why I said the higher end of the 6 to 8% growth. 25:07 25 minutes, 7 seconds Okay. Because I still have 45 days. Okay. So, we want things to continue. 25:12 25 minutes, 12 seconds So, you're right. Okay. It should reflect. But I don't want to be guiding uh in beyond that 6 to 8%. Yes. So, I'll 25:19 25 minutes, 19 seconds be very happy if I'm able to breach that in a positive way. 25:24 25 minutes, 24 seconds Very clearly. But are you seeing any other headwind that you're not able to procure yourself? 25:28 25 minutes, 28 seconds Not as of today. Not as of today. Uh so for example if this vessa crisis worsens see the state of blockade what happened 25:38 25 minutes, 38 seconds the uh the fate industries adjusted to that we have adjusted the elevated lead times replanning customers have all planned if anything new comes up which 25:47 25 minutes, 47 seconds is going to further aggravate the situation that's the only thing that is going to be impacting okay I don't see anything else coming and impacting uh 25:55 25 minutes, 55 seconds the momentum because I see two big raw material which may got impacted. One is sulfur and 26:03 26 minutes, 3 seconds ethyline oxide and these are the two very big raw material for us. Right. Yeah. 26:08 26 minutes, 8 seconds Uh and and a lot of sulfur in India at least was coming from the Middle East and ethyline oxide we had only one 26:15 26 minutes, 15 seconds supplier and ethylene is a gas based uh we know what's happening on that side. How should we think of raw 26:22 26 minutes, 22 seconds material in India? again Southeast Asia will have a same problem because uh most of the Southeast Asia sulfur used to 26:29 26 minutes, 29 seconds come from the uh Middle East. How is how is this situation playing out or there is absolutely no issue in terms of the availability of raw material for us? 26:39 26 minutes, 39 seconds So first of all on both on ethane oxide and sulfur uh there are it is not a comfortable situation if you ask me that 26:46 26 minutes, 46 seconds you know uh you you can sleep every day uh presuming that things will be on a steady state. So it's all about managing 26:54 26 minutes, 54 seconds uh managing the situation on a daily basis but I we are not seeing any great worries or concern in terms of uh the 27:03 27 minutes, 3 seconds supply side not being supported the way that our my team is able to manage okay both on ethan side and on sulfur the 27:11 27 minutes, 11 seconds price have gone up significantly that's that's given okay but the the supply side has to be manageable well and with 27:18 27 minutes, 18 seconds the sort of uh uh huge vendor uh partnership that we have uh I think we are managing it well 27:26 27 minutes, 26 seconds that's very clear one on the MAT side um the decline in teens right I know we were already struggling in the emat 27:34 27 minutes, 34 seconds because of the currency and all um know what's what's further uh hurting us because we were at 90,000 metric ton 27:43 27 minutes, 43 seconds peranom at one point of time in mat we have already reached 60 and now we are declining by another teens u What's 27:52 27 minutes, 52 seconds really happening in MAT and how should we think MAT as a region for us? 27:57 27 minutes, 57 seconds No, this we had see if you said that that 90 to 60 we talked about question of 28:05 28 minutes, 5 seconds local client who's back integrated taking the market share and uh all the uh global customers who are our C who are who are the key source of our 28:14 28 minutes, 14 seconds business have lost market shares. So that we explained now in fact if you see last quarter but for the March episode 28:22 28 minutes, 22 seconds because my Egypt plant uh couldn't produce and dispatch they they were actually uh idle for most part of the 28:29 28 minutes, 29 seconds month in March because didn't reach even what was there they couldn't ship out material which impacted as I said even 28:36 28 minutes, 36 seconds earlier uh the numbers for the month of March and that significantly impacted so you're talking about the growth that 28:44 28 minutes, 44 seconds happened 15% majorly was supply it okay very clearly okay which should start getting taken care okay from the Q1 of 28:54 28 minutes, 54 seconds this year there is nothing new that is happening in terms of the volumes I don't have a tailwind to take it to 29:01 29 minutes, 1 second 90,000 but there's nothing that is going to not allow me to grow uh at a reasonable rate uh from this base of 29:08 29 minutes, 8 seconds 60,000 if you look at just Chan Fem ignoring March what could have been the 29:15 29 minutes, 15 seconds growth rate in I met we we could have probably been 29:23 29 minutes, 23 seconds uh say 2 3%. 29:27 29 minutes, 27 seconds That was still not growing materially in that that still remains a geography which is underperforming. Correct. Correct. Correct. 29:35 29 minutes, 35 seconds That that that that's got it. One on the Middle East. We have a decent exposure on the Middle East, Saudi, UAE and all. 29:43 29 minutes, 43 seconds uh we were already a supplier from MAT market um uh MAT uh plant which is our Egypt plant how should we think about 29:51 29 minutes, 51 seconds those volume because I if I remember it we were in um probably singledigit uh contribution from the geography u how 30:00 30 minutes the have the supplies resumed there or uh how should we think about performance in that market or when the war get over 30:08 30 minutes, 8 seconds you will see a very big demand from the restocking and this year actually we can end with say upwards of 10% kind of a volume growth. 30:16 30 minutes, 16 seconds Yeah. So if the war uh uh amid can have yeah there can be restocking that will happen. But right now right now what is 30:24 30 minutes, 24 seconds happening is that uh people have started exploring land routes now for managing supply chain. The state of warmers getting blocked is critical for the 30:33 30 minutes, 33 seconds managing the supply chain in that part of the world. Okay. And uh I think uh uh we are also uh found out land roots, 30:42 30 minutes, 42 seconds different sea uh roots. Okay. Uh to be able to manage the situation. But yes, you're right. If the uh if the see you 30:51 30 minutes, 51 seconds know if the war gets resolved okay the certainly there'll be restocking but the restocking but what is important uh uh 31:00 31 minutes Sanjay is also uh with the way that the economies have got impacted in terms of 31:07 31 minutes, 7 seconds uh damage to their key facilities. How is the demand going to be intact? I do not know but if the demand is not impacted you're right the restocking 31:15 31 minutes, 15 seconds will happen uh which can lead to a spike in demand for us. 31:21 31 minutes, 21 seconds Got it. And and second you talked about your uh IITA per kg in the range of 19 to 21 uh emphasizing that upper end will be what we are aspiring or probable. 31:33 31 minutes, 33 seconds This quarter we did what 20 rupees a kg. 31:35 31 minutes, 35 seconds Uh now what will drive this 20 to 21? Is it purely operating leverage now that we are looking at higher volume or or you 31:43 31 minutes, 43 seconds still think there is a scope for some gross profit per kg improvement as well? 31:49 31 minutes, 49 seconds No, one is I think it will be driven by uh one is because volume growth is that there's operating rates but that's not the only reason. The second also is the 31:57 31 minutes, 57 seconds mix also impact because you will have uh specialties in America that are picking up. Okay. And also in Europe we are seeing some green shirts in terms of 32:06 32 minutes, 6 seconds certain project pipeline maturing. So that will contribute. 32:11 32 minutes, 11 seconds Got it. One one last question from my end. Uh we were looking an alternative product taking some market share in Indian market with this new scenario. 32:20 32 minutes, 20 seconds Have we seen that thing reversing stabilizing and we were also looking to produce that product. Where are we in that entire 32:28 32 minutes, 28 seconds we are already producing and selling that product. Okay. So yeah we already doing it. 32:33 32 minutes, 33 seconds Okay. Yes. Obviously the supply side is has got impacted. So things have changed 32:39 32 minutes, 39 seconds uh dramatically. So now uh you know uh the whole thing is about how we are able to use this flexibility that we have uh 32:48 32 minutes, 48 seconds to be able to gain back uh certain uh volume share that's what uh we'll be doing. 32:56 32 minutes, 56 seconds So this year India will be back to 10% kind of a growth. Will that be a fair assumption? 33:03 33 minutes, 3 seconds If the end market grows uh I think uh I would not say because I am still not seeing uh if if the monsoon doesn't 33:11 33 minutes, 11 seconds impact demand uh you know if the current uh uh energy prices uh doesn't impact demand because it's going to be 33:18 33 minutes, 18 seconds inflationary subject to all this not being there I see that that's what I said about 8 to 10% should be possible but uh we do not 33:27 33 minutes, 27 seconds know we're keeping our fingers crossed okay because the demand can get impacted significantly If you have all the energy prices going 33:34 33 minutes, 34 seconds up now and discretionary spending gets impacted that's the only concern. 33:40 33 minutes, 40 seconds Got it. Got it. U very helpful. Thanks for all those answers and for the coming. Thank you. 33:50 33 minutes, 50 seconds Thank you ladies and gentlemen. You may please press star and one to ask a question. We will take our next question from the line of Arun Prasad from Aendispar. 34:01 34 minutes, 1 second Please go ahead. 34:03 34 minutes, 3 seconds Good afternoon and thanks. uh first uh during this quarter 34:11 34 minutes, 11 seconds in India at least um uh what kind of volumes do you think probably would have come because of the let's say panic buy 34:19 34 minutes, 19 seconds panic buying or inventory building and uh do you see that risk of you know reversing out uh let's say things settle 34:27 34 minutes, 27 seconds and you may have a couple of quarters of uh restocking um impact on our volume growth 34:35 34 minutes, 35 seconds no I don't think there was any I don't I think there was a panic bite because uh I also told you that the feed stock prices went up significantly. So you 34:44 34 minutes, 44 seconds look at freight incoming freight rates went up. So we are also negotiating with customers for repricing. Okay. You're talking about sulfur prices going up 34:51 34 minutes, 51 seconds every day. You're talking about engine offet prices going up uh every week. 34:56 34 minutes, 56 seconds Okay. So that also was an issue. So I would not say there was no panic buy. I think the uh probably the uh uh buyers 35:05 35 minutes, 5 seconds were looking at how do they ensure that they have a security of supply and obviously as uh uh they reached out to 35:14 35 minutes, 14 seconds us but it's it's not that because even it's it's not that someone wants a panic bank we had enough and more available because even our supply chain gets 35:22 35 minutes, 22 seconds impacted in terms of the incoming so I would not say panic bank so I do not see a reason as to why there will be a 35:28 35 minutes, 28 seconds reversal Okay. Uh but yes, what can be an issue is based on my customers because these are high season months. 35:36 35 minutes, 36 seconds Jan to August, September are high season months. 35:41 35 minutes, 41 seconds Our customers prepared for this high season in terms of raming up their production. The only thing that 35:49 35 minutes, 49 seconds can spoil this growth momentum is if the demand situation gets corrected because of the inflationary situation. then our customers will start cutting back on 35:56 35 minutes, 56 seconds their production because they need to reduce the inventory levels. Okay. So that is the only thing that I see but uh there cannot be any issue in terms of 36:04 36 minutes, 4 seconds the panic buying getting reversed and then there being an impact on the uh volume growth in the in quarter one 36:12 36 minutes, 12 seconds and and narratan g one more risk is uh the gramage cut u uh indirectly uh that could also be putting pressure on our 36:21 36 minutes, 21 seconds volume growth because beyond Q1 maybe the gramage cut will also play out u at least in India. Yeah, they they have all 36:29 36 minutes, 29 seconds reduced prices. Now I have seen that they're increasing prices. Okay. So all of them have started increasing prices. 36:36 36 minutes, 36 seconds So if they but gramage reduction typically yeah it can happen because there's one way of passing on a price 36:44 36 minutes, 44 seconds increase by gramage. Okay. But yes so that we'll have to wait and watch but as of now uh we not seeing that's why I'm 36:53 36 minutes, 53 seconds saying that I am looking I'm able to clearly know about quarter one beyond that I think probably the next call will give us more clarity. 37:02 37 minutes, 2 seconds industrial s and uh on bit on u what we have done in the last three years um 37:09 37 minutes, 9 seconds this a very if I zoom out and look at it uh we have done capex in last 3 years of 37:16 37 minutes, 16 seconds roughly 480 crores um do you think some of I mean are you seeing some of these facilities which is 37:23 37 minutes, 23 seconds commissioned in the this 480 crores of capex you can give broadly the break up between some projects and if any of the idle capacities we are 37:31 37 minutes, 31 seconds And any chance of you know see in in terms of this difficult time terms with other supply is not coming. Is there a possibility we can utilize be you know 37:41 37 minutes, 41 seconds because we have put capacity ahead of that time uh should be this should be a easier time for us to monetize this capacities. 37:51 37 minutes, 51 seconds Yes. So if there is an opportunity we are well prepared to uh encase the opportunity the investments that we have done. Okay. Uh obviously yes we are very 38:00 38 minutes clear that we need to have and most of it what in the speciality ingredient segment and I also said that the tariff 38:08 38 minutes, 8 seconds situation in US had uh uh created some issues in terms of the pipeline getting built and the pipeline 38:17 38 minutes, 17 seconds uh getting converted. We also had the issue in Europe where the inflation had created a lot of issu significant 38:24 38 minutes, 24 seconds headwind in terms of conversion but those things are we are seeing that they are getting taken care of. First is in terms of the way that we have been able 38:32 38 minutes, 32 seconds to uh build the pipeline and convert them in terms of our efforts uh and see and this in the current situation if 38:40 38 minutes, 40 seconds there are supply challenges which presents an opportunity you're right okay we are well equipped to encase that opportunity. 38:48 38 minutes, 48 seconds And then and sir this entire 480 crores of capex is already kind of reflecting in our volumes and uh P&L in terms of the extent of monetization. 39:00 39 minutes We we started commission major portion of it only in the last one and a half years. Okay. So I they would start they 39:08 39 minutes, 8 seconds start some of it would start this year and then the momentum would uh be built upon. any specific projects or uh or uh groups you to call out from this? 39:19 39 minutes, 19 seconds I can't call out but I as I told you it's the major post of the investment was on the specialy ingredients segment. 39:28 39 minutes, 28 seconds And then and so on this APC revenue what are the milestones uh post which we'll be uh booking the revenues and uh in RPL have you reached those milestones? No. 39:40 39 minutes, 40 seconds So we started booking but those milestones are what is mandated as per the international accounting standards. 39:45 39 minutes, 45 seconds So that's what our team does. So the project is making good progress and we have started recognizing a portion of the revenues based on the milestones as 39:53 39 minutes, 53 seconds mandated by the international accounting standards. 39:56 39 minutes, 56 seconds I mean the whole FI26 what will be that uh contribution to the revenue from this ECC? So we we we we because we are born 40:05 40 minutes, 5 seconds by convention with the customer we are not able to reveal but it is it is enough to say that it's not material 40:13 40 minutes, 13 seconds in uh FIA 2526 okay and and this revenue will be 40:20 40 minutes, 20 seconds recognized what for how many years sir and bulk of it will be in this year or next year and you say in this year bulk of it will be bulk of it will be in 40:29 40 minutes, 29 seconds uh this financial year Okay, understood. And and finally one thing uh we last year we had a capital 40:39 40 minutes, 39 seconds day uh event where we had a specified our 2020 target. What are the initiatives we have already done on uh 40:47 40 minutes, 47 seconds to achieve those targets? anything uh in terms of product approvals or uh in terms of you know discussing with the 40:56 40 minutes, 56 seconds we have we have we we have launched products if you see I talked about limit we we have launched the products in line with what we had uh in the five year uh 41:05 41 minutes, 5 seconds you know period what was the phase one in terms of launch we have done that we started building in uh production pipeline we also talked about how we 41:12 41 minutes, 12 seconds going to be leveraging on what capacitors we already have in terms of uh the specialty ingredients okay we we've also talked about how we going to 41:20 41 minutes, 20 seconds be looking at uh coming up with uh the Levon uh the ingredients for the Levon formulations. Okay. So that's that's all 41:28 41 minutes, 28 seconds been uh done well. Okay. It's only on the wellness segment that what we had to progress. We haven't made the progress 41:35 41 minutes, 35 seconds that we should have made. Okay. So but that again it's something work in progress but only thing that I'm not uh 41:42 41 minutes, 42 seconds too satisfied is what we should have worked on the wellness segment which was a new segment we introduced. Other than that I think there are uh the work is 41:50 41 minutes, 50 seconds happening as per schedule. So I don't think uh there's anything different that's happening there 41:57 41 minutes, 57 seconds in terms of revenue and uh uh data or margin when we should start expecting uh 42:05 42 minutes, 5 seconds these things will be reflecting in our in our numbers. 42:10 42 minutes, 10 seconds Yes. to the issue uh besides so what we talked about we talked about in the analyst day talking to going to about 25,000 rupees for metric 10 correct and 42:18 42 minutes, 18 seconds I also said during the uh analyst day that it'll all be uh backloaded okay so it's not it's going to be so it'll be a 42:27 42 minutes, 27 seconds situation where it'll start happening towards uh the later portion of the next the five year period that we have had 42:34 42 minutes, 34 seconds okay so I think it'll start probably you'll start seeing this reflecting uh say Um it will you'll see some in 26 27 42:43 42 minutes, 43 seconds a good port then a good portion in 28 29 29 30 27 28 also we'll start reflect 42:51 42 minutes, 51 seconds all thanks for letting the questions all the yeah thank you 43:00 43 minutes thank you next question is from the line of Aka from Kjala please go ahead uh Good afternoon sir. Am I audible? 43:12 43 minutes, 12 seconds Yes. 43:13 43 minutes, 13 seconds Uh sir can you just tell us like what kind of capex has been occurred like was it regarding maintenance or is there any new facilities was coming up? Uh can you just shed some light on that? 43:25 43 minutes, 25 seconds No. So the capexes that we do we do we do have maintenance capexes. Okay. But they're not more than 20 30 crores per 43:32 43 minutes, 32 seconds year. uh imbalance whatever Arun was talking about has all been on growth capex and there as I right as I said it 43:39 43 minutes, 39 seconds is all bulk of it is on the specialy ingredient space okay sir uh so there won't be any capex 43:47 43 minutes, 47 seconds for f27 also right like we will have I don't see any growth capex given what there there may be some 43:55 43 minutes, 55 seconds in work in progress that will get capitalized but nothing new commitments that we are seeing in this year other than certain um Bronfield that may do or 44:05 44 minutes, 5 seconds we may do some um uh routine capacities, replacement capacities. 44:11 44 minutes, 11 seconds Okay sir. Uh and apart from this uh like uh as this current geopolitics crisis which are going on so can you just give 44:18 44 minutes, 18 seconds us revenue guidance for FY 27 and 28 like what kind of growth do you expect? 44:25 44 minutes, 25 seconds So I I don't want to mislead because I I there's no way that I can uh because the way things are I'm just looking at the 44:33 44 minutes, 33 seconds quarter one now based on the current situation that's the sort of visibility that I have. It doesn't I'm looking towards the future with lot of optimism 44:41 44 minutes, 41 seconds but I don't want it to be considering guidance that it seems misleading for each of you. Okay. So as I said quarter 44:48 44 minutes, 48 seconds one I'm looking at uh hitting the higher end of the 6 to8% volume growth and on the bit of a metric ton 21,000 per 44:56 44 minutes, 56 seconds metric 19 21,000 I look at hitting the higher end of the bank okay when we meet next time when we when we have a call 45:04 45 minutes, 4 seconds next time for new reserves hopefully things would have settled on and we have more clarity. 45:10 45 minutes, 10 seconds Okay. Okay. I got it. Thank you. Thank you. 45:20 45 minutes, 20 seconds Next question is from the line of Rohit Nagaraj from 361 Capital. Please go ahead. 45:26 45 minutes, 26 seconds Thanks for the followup. Uh what was the bid for metric for FY26 for the full year? 45:35 45 minutes, 35 seconds on a full year we were at uh uh around 19,000. 45:42 45 minutes, 42 seconds Sure. And uh the second on the broader macro aspect so we had uh in FI23 a 45:50 45 minutes, 50 seconds situation when the uh you know uh raw material prices went up and uh at the same time we had a beneficial impact on 45:59 45 minutes, 59 seconds the bid per metric t. So given the current situation which is probably more or less similar in FI27 46:07 46 minutes, 7 seconds can we see a similar kind of uh you know modality barring the Q1 that you have already talked about and you know 46:14 46 minutes, 14 seconds confidently guided for that volume growth may be in question but we'll have the ability to make it up through the higher IBIDA permit front. Thank you. 46:25 46 minutes, 25 seconds Yeah Rohit. So that's that's uh that's my desire also but only one change between 2022 and now. So in 20 to 23 46:34 46 minutes, 34 seconds okay uh we had a supply side constraint but the demand actually was an uptick whereas now okay you have a supply side 46:42 46 minutes, 42 seconds impacted but the demand as of now is intact but with the way that the energy situation uh across the world is 46:49 46 minutes, 49 seconds happening I am only only concern is that should not end up uh impacting consumer spending on discusional items that's the 46:57 46 minutes, 57 seconds only thing that we need to watch out for probably we'll have better clarity in the coming months topic. Thank you and all the best. 47:05 47 minutes, 5 seconds Thank you. 47:08 47 minutes, 8 seconds Thank you. Next question is from the line of Adita Ketan from Smith's Institutional Equities. Please go ahead. 47:17 47 minutes, 17 seconds Yeah, thank you sir for the followup. Uh so my question broadly onto the Amit market. Uh sir, we being a local player 47:24 47 minutes, 24 seconds were impacted by currency related headwinds and demand related disruptions. So versus a player who is exporting into these markets. Out of 47:32 47 minutes, 32 seconds these two like who would be better placed a local player or an export oriented player like who is importing into all these markets? 47:39 47 minutes, 39 seconds No no the better place is the local player. 47:43 47 minutes, 43 seconds Okay. But sir like we have not seen any sort of an uptick. So if you if you can help us. So what was the market growth into this Amit market for the last two 47:51 47 minutes, 51 seconds years? like what was the effect in the market growth and across categories like we have seen a decline or there are some categories we have gone down others have 48:00 48 minutes gone up any sort of you know the only problem is this see this whole market Africa Middle East Turkey is a combination like we had a 48:08 48 minutes, 8 seconds year in which Turkey because of inflation got impacted okay and then our exports into Turkey were impacted Egypt 48:15 48 minutes, 15 seconds had its own issues in terms of currency availability and inflation that impacted volume so when an when when a when due to inflation and currency unavailability 48:24 48 minutes, 24 seconds you have a significant uh what I can say uh disruption of consumption it takes time to come back that's typically what 48:32 48 minutes, 32 seconds is happening there and our ability to be able to place those significant volumes on in Egypt and Turkey which uh gets 48:39 48 minutes, 39 seconds impacted due to the current situation and inflation uh into other markets okay is not is not happening that easily the 48:48 48 minutes, 48 seconds way that we would want it because all the markets there are very different. 48:51 48 minutes, 51 seconds Okay. So, some markets, you know, you need to be very careful in terms of credit risk. Okay. Some markets you need to be there. Some markets you just can't even approach because of sanctions and 49:00 49 minutes all that. So, that's the only thing that we have. So, these markets have to if they get into a situation of demand recession, it takes time for it to come 49:08 49 minutes, 8 seconds back. That's the only reason situation that we are into as far as Africa, Middle East, Turkey is concerned. 49:16 49 minutes, 16 seconds And sir, uh onto the categories part. So are we present in most of the categories which the end user or the OEMs use over 49:24 49 minutes, 24 seconds there or like we are present only in some categories. No, no, we have we have other than fragrance and color, I think 49:31 49 minutes, 31 seconds we can serve them with the entire basket of ingredients both on the performance of item side and the specialy ingredients side. 49:39 49 minutes, 39 seconds And sir, onto the market demand growth for the last two years. Any idea sir how this market has grown? Amit market? 49:48 49 minutes, 48 seconds I'm at market. I do not have it right now with me but uh I uh uh whatever I 49:56 49 minutes, 56 seconds see in terms of the business at the presentations that was doing it it wasn't reflecting anything great there was growth but then it was typically uh 50:04 50 minutes, 4 seconds a little bit touchy because the countries were also going through uh their own struggle. So uh in my view I think it it's it's it's if I'm able to recall it's about say uh 3 to 4%. 50:17 50 minutes, 17 seconds 3 to 4%. Okay. In terms of the volume declines like whatever we have seen over the last two three years volume dip in 50:24 50 minutes, 24 seconds market you see largely that to be bottoming out over the coming year considering all these macroeconomic uncertainties we will resolve into this 50:33 50 minutes, 33 seconds market. Are are you witnessing some sort of a change of like this will continue even for the one to two years time? 50:38 50 minutes, 38 seconds No I think probably the we it has bottomed out now. So from here we should only improve. 50:46 50 minutes, 46 seconds Yes. And we'll probably start seeing it from the coming quarters. Okay. Thank you. 50:56 50 minutes, 56 seconds Thank you. That was the last question for today. I would now like to hand the call back to the management for closing comments. 51:04 51 minutes, 4 seconds Thank you so much uh ladies and gentlemen for uh uh coming into this earnings call for uh Q4 and full year FI2526. 51:15 51 minutes, 15 seconds Uh looking forward to talking to all of you okay in uh August when we announce 51:20 51 minutes, 20 seconds our Q1 results for FYI 2627. Thank you and have a good day. Bye-bye. 51:30 51 minutes, 30 seconds Thank you very much on behalf of G on behalf of Galaxy Sectants Limited. That concludes this 51:37 51 minutes, 37 seconds conference. Thank you all for joining us today.