Gandhar Oil Refinery (India) Limited — Q3 FY26

Gandhar Oil Refinery (India) Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LSY1yzaS7tY Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Gandhar Oil Refinery India Limited Q3 and 9 months FY26 earnings 0:09 9 seconds conference call hosted by MUFG Inime Private Limited. As a reminder, all participants line will be in the 0:17 17 seconds listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this 0:25 25 seconds conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. 0:34 34 seconds I now hand the conference over to Miss Aayushi Gupta from MUFG in time private limited. Thank you and over to you Miss Gupta. 0:44 44 seconds Thank you. Good morning everyone. I welcome you all to the Q3 and 9 months FY26 earning conference call of Gandhar 0:51 51 seconds Oil Refinary India Limited to discuss this quarter's business and financial performance we have from the management 0:58 58 seconds Mr. Ashesh Parik joint managing director and Mr. Indrajit Batajara CFO. Before we proceed with the call, I would like to 1:06 1 minute, 6 seconds mention that some of the statements made in today's call may be forward-looking and may involve risk and uncertaintities. For more details, 1:14 1 minute, 14 seconds kindly refer to the investor presentation and other filings that can be found on the company's website and on the stock exchange. Without further ado, 1:22 1 minute, 22 seconds I would like to hand over the call to the management for their opening remarks and then we can open the floor for Q&A. Thank you and over to you, sir. 1:32 1 minute, 32 seconds Thank you. Uh first of all, good morning to everyone who is joining us on this call. Uh I am Ash Par, joint managing director of Gandhar Oil Refinary India 1:40 1 minute, 40 seconds Limited. I'm joined today by our CFO, Mr. Angrajit Batachara. We appreciate your time and participation as we discuss our financial performance for 1:48 1 minute, 48 seconds the third quarter and the 9 months ending 31st December 2025. I'll begin by sharing our perspective on the operating 1:56 1 minute, 56 seconds en environment and how our business has performed amidst a dynamic economic landscape. The global white oil market continues to exhibit steady structural 2:04 2 minutes, 4 seconds driven growth. Based on the recent industry estimates, the market was valued at approximately $3.6 billion in 2025 and is expected to be around $4.66 2:13 2 minutes, 13 seconds billion by 2034. Expecting a CAGR of about almost 3% over 2025 to 2034 2:20 2 minutes, 20 seconds period. This growth is underpinned by the essential role of white in regulated and performance sensitive applications where consistency, safety and compliance 2:28 2 minutes, 28 seconds remains very critical. Regionally, Asia-Pacific remains the largest contributor to the global white demand according accounting to over 40% of the 2:36 2 minutes, 36 seconds total consumption supported by industrial expansion, rising healthcare usages and growing personal care adaption. At the same time, developed 2:45 2 minutes, 45 seconds market continues to demand higher quality grades due to tighter regulations. This dynamic aligned well with Gandhar's policy and operating strength and reinforce our position 2:53 2 minutes, 53 seconds within the global v2 value chain. During the third quarter FI26, Gandha recorded a consolidated revenue of 1,167 3:01 3 minutes, 1 second crores reflecting a healthy yearon-year improvement of 16% and quarter and quarter growth of 10%. For the 9th month 3:08 3 minutes, 8 seconds period ended FI26, the total revenue stood at around 3,000 uh at 3,130 crores demonstrating stable performance despite 3:17 3 minutes, 17 seconds the challenging macro macroeconomic environment marked by pricing volatility and logistical disruptions. 3:24 3 minutes, 24 seconds International market continues to play an important role in our overall performance with overseas sale contri contributing to around 45% of the 3:31 3 minutes, 31 seconds consult revenue during the 9-month period. This sustained contribution from global market underscores the strength of our international customer base and 3:39 3 minutes, 39 seconds reflects the steady progress we are making in expanding and deeping our global footprint across key geographies. 3:45 3 minutes, 45 seconds With this I would now like to hand over this call to our CFO Mr. Indrajit Patara who will take you through the financials in detail. Thank you once again and over to you Indrajit. 3:54 3 minutes, 54 seconds Thank you Ashai and good afternoon to all participants. Let me take you through the financial highlights for the third quarter and 9 months ended FI26. 4:03 4 minutes, 3 seconds On a consolidated basis, revenue for Q3 FI26 stood at 1167 crores, reflecting a 4:10 4 minutes, 10 seconds sequential increase over Q2 FI26 and healthy year-on-year growth of 16% compared to Q325 FI25. For the 9 months 4:20 4 minutes, 20 seconds ended FI26, consolidated revenue stood at rupees 3130 crores supported by steady volumes and consistent demand 4:29 4 minutes, 29 seconds arose across markets. I beta for Q3 FI26 was 59 crores while the while this 4:36 4 minutes, 36 seconds represents a moderation compared to the strong performance in Q2 FI26 it remains significantly higher on a year-onyear 4:44 4 minutes, 44 seconds basis for the 9 month ended uh for the 9 month period stood at 171 crores underscoring the resilence of our 4:52 4 minutes, 52 seconds operational performance profit after tax for Q3 FI26 was rupes 34 crores compared 4:59 4 minutes, 59 seconds to rups 40 crores in Q2 FI26 and rupes 20 crores in Q3 FI25. For the 9 month 5:06 5 minutes, 6 seconds ended FI26, PAT stood at rupees 100 crores, reflecting a strong improvement over the corresponding period last year. 5:13 5 minutes, 13 seconds Our segmental revenue mix for 9 month FI26 remained well diversified with PHP 5:20 5 minutes, 20 seconds contributing 50% followed by lubricants at 26.8% and PIO at 9.5%. the the manufacturing 5:29 5 minutes, 29 seconds gross margin spread for Q3 FI26 stood at rupes 7,271 per k underscoring the strength of our 5:38 5 minutes, 38 seconds manufacturing efficiency and disciplined operating exe execution we remain focused on a prudent cash flow 5:46 5 minutes, 46 seconds management and operational efficiency as we navigate a volatile global environment with this I conclude the financial review and would now be happy to take your questions thank Thank you. 5:59 5 minutes, 59 seconds Thank you. Thank you very much. We will now begin the question and answer session. 6:05 6 minutes, 5 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 6:12 6 minutes, 12 seconds If you wish to remove yourself from the question queue, you may press star and two. 6:17 6 minutes, 17 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment 6:25 6 minutes, 25 seconds while the question Q assembles 7:00 7 minutes The first question is from the line of Rohit from I thought PMS. Please go ahead. 7:08 7 minutes, 8 seconds Uh uh am I audible? Yeah. 7:12 7 minutes, 12 seconds Uh good morning sir. Thank you for the uh opportunity. So sir uh uh just uh three questions. one was so if I look at 7:20 7 minutes, 20 seconds the history of our company over the last 7 8 years our operating margins have hovered between uh 2 3% to about 7 8%. 7:29 7 minutes, 29 seconds And right now we at about 5% in this quarter uh so just from to understand uh I understand our gross margins are 7:38 7 minutes, 38 seconds pretty low. uh uh so I mean h when you look at your business what is the uh 7:46 7 minutes, 46 seconds general operating margin that you would uh that you would sort of say that this is a normal operating margin for a business I know it can fluctuate a 7:55 7 minutes, 55 seconds quarter here and there but I'm just trying to understand on a normalized basis how do you see 8:03 8 minutes, 3 seconds so the the by operating margins we'll be talking about ITA we We're looking at I 8:09 8 minutes, 9 seconds beta in excess of about 5 5 12% annually and we expect we expect it to keep going 8:17 8 minutes, 17 seconds up from now. I mean all other conditions all of the circumstances remaining the same. 8:25 8 minutes, 25 seconds Okay. And so we I mean there are some other uh uh I mean some of your peers 8:32 8 minutes, 32 seconds were also listed and I was trying to sort of compare. So we are more focused on the uh personal healthare personal 8:40 8 minutes, 40 seconds care and healthcare segment. Uh so any specific reason for that? I mean and also if you can sort of comment on uh 8:48 8 minutes, 48 seconds where the margins are better where the uh sort of uh customers are more sticky. 8:54 8 minutes, 54 seconds I mean there are there are other segments like transformer oil is there uh paraffin is there. So if you can maybe just explain what uh if you can 9:03 9 minutes, 3 seconds just give an overview about these other segments and why we've chosen on the uh performance uh personal care segment. 9:11 9 minutes, 11 seconds Yeah, sure. See, Gandhar oil is not only focused on PHP as a product matrix but you know we also are you know having 9:20 9 minutes, 20 seconds other products in our uh portfolio including the transformer oil, including the rubber processing oils, including the lubricants uh the value share you 9:27 9 minutes, 27 seconds know across the value chain. uh if we discuss you know around 50% of the total uh contribution is still from the PHPO sector which is the personal care 9:35 9 minutes, 35 seconds healthcare uh performance oil segment uh the other businesses are also growing PHPO as a business I mean uh obviously 9:43 9 minutes, 43 seconds last say if you say last one and a half to two years obviously uh the cosmetics and the pharmaceutical industry has not been doing so well you know because of 9:51 9 minutes, 51 seconds the of the domestic uh consumption you know we anticipate the consumption you know to move up I mean uh after discussion with our you know various 10:00 10 minutes FMCG customers they are also anticipating the pick up and demand you know post GST rate cuts you know post 10:07 10 minutes, 7 seconds increasing liquidity you know uh in the system so we are highly hopeful uh that you know the the FMCG sector you know 10:15 10 minutes, 15 seconds will turn around very soon having said that you know most sticky customers are in the PHP business where you know the the entry to a customer is more than you 10:23 10 minutes, 23 seconds know like 7 to 8 years of time frame and you know once you are there with the customer we grow with the customer That's what we have even experienced. 10:30 10 minutes, 30 seconds So, and with if you see the other businesses, it's more of a price sensitive price driven uh business. For example, it's a transformer oil. It's purely a pricedriven business. It's a 10:38 10 minutes, 38 seconds tender business. You know, the margins are are pretty low and you know, even the dattors, even the collection from uh 10:45 10 minutes, 45 seconds from this segment is pretty pretty high compared to the PHP segment. So, the focus will still be on the PHP segment. 10:51 10 minutes, 51 seconds Having said that, we are also you know uh not only dependent on our domestic customers, we are also dependent on our overseas business which is also contributing to around 35 40% of the 10:59 10 minutes, 59 seconds total uh revenue of the company. We are we are you know on verge of you know adding some new products also to the pipeline and we are very hopeful uh that 11:07 11 minutes, 7 seconds our margins in the near future would definitely go up. 11:12 11 minutes, 12 seconds Got it. So just on this question just on this question on uh the uh the volatility of a raw material. So how 11:20 11 minutes, 20 seconds does it work sir in terms of uh because these are all crude oil derivatives. 11:26 11 minutes, 26 seconds Uh so base oil base oil pricing how does it work with your customers? 11:33 11 minutes, 33 seconds So see basil is the KRM you know for any of our product management wherein you know we have term contracts with our suppliers you know for uh annual uh 11:42 11 minutes, 42 seconds oftake of our of our bas oil to service our customers. So with suppliers we do have you know pricing uh pricing 11:49 11 minutes, 49 seconds formulas in place with few of our select customers you know we do have price pass through mechanism you know wherein changes in the raw material price 11:56 11 minutes, 56 seconds changes in the forex price are passed on to our customers. only few of our spot customers you know we have a pricing on uh every 15 days every fortnite 12:04 12 minutes, 4 seconds mechanism wherein you know any change in the price you know is passed on to the customer on on uh on fortnite basis having said that we have more than 4,000 12:11 12 minutes, 11 seconds plus set of customers you know so the repeat auto is uh from this customer is more than uh 75 80%. 12:18 12 minutes, 18 seconds Yeah. So with like sticky customers we have a history of about 70% of repeat customers for the last 3 to four years. 12:30 12 minutes, 30 seconds So you see that with few customers we have pricing contracts and with few customers we have like a 15-day uh price change that happen every time we change the price. 12:41 12 minutes, 41 seconds Yeah. So what share would we where we have these these pricing contracts where we'll we'll have a formula and any 12:48 12 minutes, 48 seconds change will sort of automatically get uh accommodated. What percentage of our revenue will be coming from these customers 12:56 12 minutes, 56 seconds around around uh 35% of the business is on that price pass through mechanism the residual on the are on the uh other mechanism. 13:08 13 minutes, 8 seconds Got it. And just this last question before I fall back in the queue. Uh so if I look at your uh EITA this water it 13:16 13 minutes, 16 seconds improve both sequentially and YI as well which you explained. Uh but in your presentation you've given the per liter 13:24 13 minutes, 24 seconds EITA also that you that has been broadly in the same range but the improvement in EITA has been much more. Uh so what has 13:33 13 minutes, 33 seconds led to that? I mean I see that other expenses are significantly reduced. 13:38 13 minutes, 38 seconds uh both sequentially and yi. So just uh if you can just explain what was that. 13:45 13 minutes, 45 seconds So obviously you know expense is one part of it you know we've been able to you know handle our finance cost effectively well uh year on year quarter on quarter over and about that obviously 13:54 13 minutes, 54 seconds you know we've been we've been in a position you know to better sell our product and and also efficient buying you know uh from our suppliers. So this has been you know combination uh of 14:02 14 minutes, 2 seconds various factors which has related to this the the main the main driver for any change in iota or even pat is the gross 14:12 14 minutes, 12 seconds margin of our products because this represents practically 75 to 80% of the cost. So in 1% move here or there has an 14:20 14 minutes, 20 seconds impact on the uh bottom lines. So that is why we one of the main reasons is that we've done better on the gross margins. 14:31 14 minutes, 31 seconds Got it. And uh so one thing was that so a rising crude base oil price is beneficial for you or a falling base oil 14:40 14 minutes, 40 seconds uh base oil pricing environment is beneficial for you on a rule of thumb basis whatever you've seen in the last seven eight years. 14:47 14 minutes, 47 seconds Yeah I mean it's difficult for me to you know give you a specific comment because you know we don't play on uh the raw material price. Our focus is purely you 14:55 14 minutes, 55 seconds know customer-driven attitude wherein you know we focus on customers their requirement and we have a lean inventory of around 40 45 days at the most. So and 15:03 15 minutes, 3 seconds whatever buying is there you know I mean 80% of the product is pre-sold you know so really I mean uh unless in very 15:11 15 minutes, 11 seconds exceptional situation you know where like crude goes up from $30 to $200 a barrel or vice versa it may impact otherwise you know if it is rangebound it's not a problem. 15:22 15 minutes, 22 seconds Got it. Thank you. I'll call back if I have more questions. Thank you very much. Thank you. 15:27 15 minutes, 27 seconds Thank you. Participants who wish to ask a question may press star and one. 15:33 15 minutes, 33 seconds The next question is from the line of Mr. Retesh Polaria from Giri Capital. Please go ahead. 15:40 15 minutes, 40 seconds Uh thanks a lot. Uh so my question is uh your uh manufacturing gross margin uh from your own presentation it's like uh 15:50 15 minutes, 50 seconds 12 quarter low. So uh the improvement would not be from this uh gross margin spread. It would be from other expenses. 15:57 15 minutes, 57 seconds So if you can elaborate on uh uh what has led to uh fall in the uh other expenses uh that would be very helpful for us. 16:13 16 minutes, 13 seconds Hello. Just a minute. Let me room over there. 16:27 16 minutes, 27 seconds So bas if you see quarter on quarter or if you are going to see year on year the major improvement has happened on other 16:36 16 minutes, 36 seconds expenses which is reduced from 52 crores in 31 12 24 to 37 crores this year. Uh even finance cost has slightly improved. 16:49 16 minutes, 49 seconds Employee cost employee cost is no employee cost has gone up but the major improvement is on account of other 16:56 16 minutes, 56 seconds expenses where where the major component would be freight and uh where do you see freight now is 17:05 17 minutes, 5 seconds it stable or again it's inching up from this geopolitical situation. 17:10 17 minutes, 10 seconds So apparently currently the the rate are pretty stable and there is no such uh unexpected hike that we experienced you 17:17 17 minutes, 17 seconds know uh previous quarters and just to add you know our gross margin in quarter 3 you know uh in 17:25 17 minutes, 25 seconds number term you know on on a standalone basis for example you know has improved from uh from 18 crores in FI 20 uh sorry 17:34 17 minutes, 34 seconds uh 17 crores in FI25 quarter 3 to 36.3 crores in FI26 quarter 3. So obviously there has been an increase uh in in the overall performance of the company. 17:45 17 minutes, 45 seconds So it's just not only you know the expense reduction but uh obviously increasing on the performance as well. 17:51 17 minutes, 51 seconds Yeah. But your gross margin is about 12 quarter low. In fact if we see from uh IPO times it used to be hovering at 17:59 17 minutes, 59 seconds 10,000 uh uh 10,000 rupees per kilo liter. Now it's about 7,200. So is it 18:05 18 minutes, 5 seconds because of the uh you know range about oil prices or is there any uh other reason like a increased competition or any anything you can elaborate on that? 18:17 18 minutes, 17 seconds compet. 18:18 18 minutes, 18 seconds Yeah, I mean if you see uh the preipo around IPO obviously these are all you know postcoid numbers and all that stuff 18:27 18 minutes, 27 seconds you know but you know post that if you see last two years you know majority of chemicals speciality chemicals I mean across the industry there has been you 18:34 18 minutes, 34 seconds know revision in the profitability cotton quarter I mean uh I mean Dr. you know part of the same cycle but we are trying we tried our level best you know 18:42 18 minutes, 42 seconds to maneuver around and you know ensure that you know the margins of the companies are protected and you know uh and in fact now we have started 18:49 18 minutes, 49 seconds improving if you see last three quarters compared to previous year our profitability has increased our gross margin also have substantially increased 18:58 18 minutes, 58 seconds also if you can guide us on current uh ruling white oil prices and uh where do 19:04 19 minutes, 4 seconds you see it is uh going uh 7,000 7,800. So, can can you repeat your question? 19:13 19 minutes, 13 seconds you're talking about uh uh uh if you can comment on the current uh ruling white oil prices uh uh during the month of January and where do 19:22 19 minutes, 22 seconds you see it's going January January so I mean it's range is around say 70 to 70,000 72,000 uh sorry around 19:31 19 minutes, 31 seconds 78 to 80,000 rupees per metric ton okay and we 19:38 19 minutes, 38 seconds yes sir please go ahead no so we anticipate the price to be you So little bit going up I mean based on 19:45 19 minutes, 45 seconds the raw material increase and the forex increase as well. 19:50 19 minutes, 50 seconds Sure. Uh also if you can comment on your capex uh I think there is some delay from the whatever you envisaged in the 19:58 19 minutes, 58 seconds IPO or is it on uh time frame if you can uh uh quickly take us through that. 20:04 20 minutes, 4 seconds No no uh delay in the capex. 20:09 20 minutes, 9 seconds So uh uh I I I think uh in the IPO whatever uh their plans is there any 20:16 20 minutes, 16 seconds delay or uh all your capital expenditure it's all done all the money has been expended and the all the capex has been 20:24 20 minutes, 24 seconds put into place all the other objects have been met okay so 6 lakh liter is your now 6 lakh 20:31 20 minutes, 31 seconds kilon lit is your capacity uh which will be uh there for some time now right in the free plants 20:39 20 minutes, 39 seconds Okay. And uh uh what will be the utilization for the charger? Shar is currently around 70 72%. 20:49 20 minutes, 49 seconds Sir, India has about almost optimum utilization but Shar is uh bit low. Is there any uh 20:59 20 minutes, 59 seconds so Sharah is basically a new plant. I mean it got operationalized sometime in 2017 or 2018. Okay. Now as a had 21:08 21 minutes, 8 seconds explained getting onboarded with these marquee names or the big players takes anything less nothing less than six to seven 21:16 21 minutes, 16 seconds years. So that process is on. Second is even we are the raw material supplies for charger are also in the process of 21:24 21 minutes, 24 seconds being set up. So it will it will take another two two and a half years for charger to come online or close to the 90 95% listing. Till then this is the 21:33 21 minutes, 33 seconds normal course of business. The customer accreditation is I mean accretition by the customers is happening and the raw material lines have been set up. 21:43 21 minutes, 43 seconds Sure sir. Uh also if you uh is there any other expansion plans uh you are currently going through or uh right now it's a status quo. 21:53 21 minutes, 53 seconds Uh it's difficult for us to comment but obviously as you have seen during the board meeting obviously the restorations are now available publicly. We purchased 22:01 22 minutes, 1 second some uh we have planned to purchase some additional piece of land in both our facilities you know for expansion. So maybe we'll be you know in a position to 22:09 22 minutes, 9 seconds give you more clarity in maybe a quarter to come as well with the with the amount of expansion plant and the quantity and the value of capex plant and in the capex you will have the 22:18 22 minutes, 18 seconds regular maintenance capex debottling capex that will happen and some additional tanks are being put up. So I mean uh storage 22:25 22 minutes, 25 seconds but the new new capex will definitely be you know coming by by by maybe uh end of this year or next year at the most. 22:35 22 minutes, 35 seconds Sure. And uh final last question uh what's the status of this Vadwan port uh project for you? Uh there was like 22:43 22 minutes, 43 seconds non-binding MOU but if you can uh give us some uh idea what's happening over on that side. 22:49 22 minutes, 49 seconds The tenders have still not been floated you know by the government as yet. So we are persuading them and as as soon as we have some information which we need to 22:57 22 minutes, 57 seconds pass on to our shareholders definitely we'll be doing so. 23:01 23 minutes, 1 second And uh uh uh what what kind of uh uh investments would be that is it for the chemical storage side or uh is it from your own this existing operation side? 23:14 23 minutes, 14 seconds It will be a combination of both. Okay. 23:19 23 minutes, 19 seconds Yeah. That's all from my side. Thank you very much sir. Thank you. 23:24 23 minutes, 24 seconds Thank you. The next question is from the line of Mr. Bhavesh Patel from Patel Investments. Please go ahead. 23:33 23 minutes, 33 seconds Uh hi, thanks for the opportunity and congratulations on great set of numbers. 23:38 23 minutes, 38 seconds The turnaround is visible and uh hoping for better numbers going ahead. Also Fred uh felt great to get the dividend 23:46 23 minutes, 46 seconds of 75 PISA. uh appreciate especially the comment in terms of continuity of quarterly conference call based on the 23:53 23 minutes, 53 seconds input in last call. So thank you Ashlesh by on that and I like the details provided by both Asles by as well as 24:01 24 minutes, 1 second Indrajit. I have following couple of questions. Number one, our company reported record-breaking revenue this 24:09 24 minutes, 9 seconds quarter. So congratulations on that. Yet the manufacturing gross margin spread which is INR per kil contracted from 8662 to 7271. 24:20 24 minutes, 20 seconds Can you please explain this and do we expect this situation to be continued? 24:27 24 minutes, 27 seconds So this is this is basically an impact of the raw material prices also and the uh 24:36 24 minutes, 36 seconds the the the the fact that uh what Ashes mentioned that FMCG and pharma uh with our regular customers we've we've not 24:45 24 minutes, 45 seconds been able to get the prices which we were getting earlier. So these are the main reasons why the gross margins has been slightly impacted. uh going forward 24:53 24 minutes, 53 seconds yes we the the whole of this year we've been getting in excess of 7 7 and 1/2 rupees per uh liter going forward we 25:01 25 minutes, 1 second would like it to be close to 8 but it should stay around 7 7.8 7.9 rupees per liter. 25:08 25 minutes, 8 seconds All right. Thank you Indrajit on that. 25:10 25 minutes, 10 seconds Uh the next question is the board uh the meeting came out right in terms of minutes. It said uh approved the 25:17 25 minutes, 17 seconds purchase of 453 decimals of land adjacent to your current factory. Now I really don't understand what is this 453 25:25 25 minutes, 25 seconds decimals. Is it in terms of like you know acres or square meters? And where have you purchased this land at Taloja Silvasa? I mean which place? 25:35 25 minutes, 35 seconds So these these are these are plans being purchased uh at both the units at Silvasa and Taloia adjacent to our 25:44 25 minutes, 44 seconds existing factory. Now as regards the decimals uh we'll we'll we'll get back to you during the course of this call itself. What 25:53 25 minutes, 53 seconds does decimal mean? I don't know if it's Gas or 4853 acres. I'll just get back to you on that. Yes, please. That will be appreciated. 26:01 26 minutes, 1 second So we are saying we are buying at both the lands uh both the plants in terms of adjacent land for uh expansion. Now, now 26:09 26 minutes, 9 seconds I I know by mentioned about strategic plans for the timeline as well as amount for the further capacity addition. But 26:18 26 minutes, 18 seconds my question is without the upcoming capacity expansion with the land that we purchase, are we still continuing with 26:25 26 minutes, 25 seconds our increasing volume by 10 15% over next two three years on a yearly basis? 26:32 26 minutes, 32 seconds Okay. years but next next one and a half to two years we'll definitely be increasing our volumes quarter on 26:40 26 minutes, 40 seconds quarter uh even without the existing land perfect thank you uh the next question 26:49 26 minutes, 49 seconds final question in fact and I I uh I really appreciate the way by you and as well as promoter picked up uh at around 26:58 26 minutes, 58 seconds all-time low price of 120 onwards all the way up to 155 us now. Are you still looking at increasing your stake or uh 27:06 27 minutes, 6 seconds it was just to support and give confidence to all of us? 27:10 27 minutes, 10 seconds No, no, no. This is this is skin in the game, sir. The promoter sees the the the 27:17 27 minutes, 17 seconds the potential of the company to take it further. 27:22 27 minutes, 22 seconds Perfect. Perfect. No, really appreciate and and that's that's a great thing giving us confidence to be in together for longer period. So appreciate all the 27:32 27 minutes, 32 seconds very best and thank you once again Ashlesh as well as Indrajit. Thank you. Thank you so much. 27:39 27 minutes, 39 seconds Thank you. The next question is from the line of Mr. Rahil S from Sapphire Capital. Please go ahead. 27:47 27 minutes, 47 seconds Hi sir, good morning. Can you hear me? Yeah. Yeah. 27:51 27 minutes, 51 seconds Yes sir. Hi. So firstly this uh the other the segments I mean lubricants and uh 27:59 27 minutes, 59 seconds PIO um what uh what is the outlook there? I mean what is the current market scenario where you said transformer oil 28:06 28 minutes, 6 seconds is not doing uh as well as expected in the markets any reason for that? 28:11 28 minutes, 11 seconds So no I never said transformer is not doing well in the market. I told uh there are delicquencies in data collection in terms of the transform business because of the power structure it is associated with. 28:22 28 minutes, 22 seconds So okay so and uh and for the lubricant obviously you know it is growing at a stable pace. 28:29 28 minutes, 29 seconds I mean uh with the advent of EV obvious lubricant demand you know obviously would come down over the years but for at least for industial lubricant 28:38 28 minutes, 38 seconds obviously the demand keep on rising with increasing economy. 28:45 28 minutes, 45 seconds Just to clarify what Ashai meant is that transformer oils is a growing segment with the increase in electrification 28:52 28 minutes, 52 seconds with the electricity around but it is it is something which blocks a lot of working 28:59 28 minutes, 59 seconds capital because of the okay sir and uh you said the uh other 29:10 29 minutes, 10 seconds expenses were you know much lower this quarter which is a good sign but the major component which led to that was the changes in spread rate correct which 29:20 29 minutes, 20 seconds you say are pretty stable as of now but let's say they turn volatile given the geopolitical conditions so how do you still expect to you know maintain or uh 29:27 29 minutes, 27 seconds you know improve your gross margin see uh post this issue you know we have been you know in a position to pass on 29:35 29 minutes, 35 seconds the increase in freight rates to our customers and uh currently we are doing lots of shipments on FOB so freight is being arranged by the customers you So this has helped us in you know 29:43 29 minutes, 43 seconds navigating uh the freight uh uh sudden freight hikes if any going forward 29:50 29 minutes, 50 seconds [clears throat] 29:50 29 minutes, 50 seconds and you have that sort of arrangement with all your customers. 29:54 29 minutes, 54 seconds Majority of the customers I cannot say all the customers but majority of the customers. 29:58 29 minutes, 58 seconds Okay. So by and large you will be able to you know uh keep your gross margins at the range of the double digit at least. Can we expect that from the next 30:06 30 minutes, 6 seconds quarter itself from quarter four? So we are very we are very uh optimistic about it. 30:13 30 minutes, 13 seconds Okay. And finally sir if you can guide on uh revenue front any specific guidance you have or what do you expect 30:20 30 minutes, 20 seconds like a growth kagger for the next two three years you expect to achieve? 30:23 30 minutes, 23 seconds Uh our our annual budgeting for the next year is on the way this is in February. 30:29 30 minutes, 29 seconds So hopefully maybe next call it will be to give you much more clarity on you know what would be the guidance number for the year coming ahead. 30:36 30 minutes, 36 seconds Correct. Okay sir. Thank you. 30:41 30 minutes, 41 seconds Thank you. The next question is from the line of Mr. Pratik Sha from Investing Alpha. Please go ahead. 30:49 30 minutes, 49 seconds Hello. Yeah. Hi, good morning sir. Thank you for the opportunity. 30:54 30 minutes, 54 seconds So my first question is the PHPO continues to be the largest contributor to the finished goods revenue. So how 31:01 31 minutes, 1 second should we think about the growth trajectory at this segment you know over the median terms? 31:11 31 minutes, 11 seconds uh the FMCG industry as you are aware I mean PHP is a combination we are dependent on our customers you know to grow and that's a very basic line but 31:19 31 minutes, 19 seconds obviously the FMCG industry obviously has not been growing so well over last two years but obviously with with the 31:26 31 minutes, 26 seconds liquidity in the system hello can you hear me yes we can hear you 31:34 31 minutes, 34 seconds okay yeah so with uh with the GST reforms that has been there in the country you know by the honorable prime minister. We are very hopeful that FMCG 31:42 31 minutes, 42 seconds and the consumption demand you know specifically in the rural areas and the urban areas will start coming up you know from this quarter. Uh we are very 31:50 31 minutes, 50 seconds hopeful and with the discussions that we have with our customers you know they are also pretty optimistic that things will turn around uh earlier than earlier 31:58 31 minutes, 58 seconds than expected. So we are very hopeful that the the PHP and the cosmetic industry will you know continue growing at the way in the in the near future in 32:05 32 minutes, 5 seconds at least you know a high single digit plus we are also dependent on our exports for our PHP business as well. So uh not only on domestic front but also 32:13 32 minutes, 13 seconds export front we are anticipating to you know increase our our uh our revenue from our overseas customers. 32:22 32 minutes, 22 seconds Okay. So uh are we seeing a higher growth you know growth from existing customer itself or any incremental 32:29 32 minutes, 29 seconds contribution from uh newer accounts or any specific geographies that we are targeting? 32:36 32 minutes, 36 seconds Uh see we it's a combination of uh both the things I mean obviously like our existing customers you know are showing 32:43 32 minutes, 43 seconds some growth plus we are you know penetrating with our existing customers. 32:47 32 minutes, 47 seconds So with some of our multinational companies you know currently we're only supplying to India market. Now we are supplying you know this multinational customers to our overseas market as well. So that's why we are penetrating 32:55 32 minutes, 55 seconds with this customer and you know growing internally. 32:58 32 minutes, 58 seconds Okay. Uh so one last question. So exports now form a meaningful share of our overall revenue. So which regions are you currently driving this growth? 33:10 33 minutes, 10 seconds No no ex what was the question? Minuncal about 45% overseas sales is about 45% of total turnover. 33:18 33 minutes, 18 seconds Right. 33:19 33 minutes, 19 seconds So I'm just asking like which regions are currently driving this growth? 33:24 33 minutes, 24 seconds Uh obviously it is Asia Pacific uh and some some some specific countries in Africa which are driving this growth. 33:32 33 minutes, 32 seconds Okay. And uh should we expect the export mix to remain broadly stable or do you see certain markets getting faster over the next couple of years? 33:43 33 minutes, 43 seconds See obviously with uh uh the announcement of deal you know coming forward with uh with the US obviously we 33:51 33 minutes, 51 seconds may anticipate uh US uh would you know accelerate in terms of growth and with the EU trade is just done we are anticip 33:58 33 minutes, 58 seconds we are still working on the numbers and the benefit that our customers will have in the European region then you know I mean the landscape would definitely change you it's difficult for me to give 34:06 34 minutes, 6 seconds you a number now but uh uh we are anticipating the landscape to be changed uh uh very Okay, thank you sir. Thank you for the opportunity. 34:17 34 minutes, 17 seconds Thank you. The next question is from the line of Mr. Vive Gupta from Star Investments. Please go ahead. 34:26 34 minutes, 26 seconds Hello. Am I audible? Yeah. 34:30 34 minutes, 30 seconds Yeah. Hi sir. Uh so the working capital levels appears elevated in uh recent periods. Is this largely uh driven by business growth and invent planning? 34:46 34 minutes, 46 seconds levels the there has been a general increase about 3 4 days in inventory and about four five days in uh in uh uh 34:55 34 minutes, 55 seconds receivables and uh but in the same breath what was happening earlier was my creditors levels was coming down this year we've been able to keep it at 35:03 35 minutes, 3 seconds normal so uh if I take all that my my cash conversion cycle this quarter is slightly better than the previous 35:10 35 minutes, 10 seconds quarter and we expect it to be around with the same levels as this quarter. 35:18 35 minutes, 18 seconds Okay. Uh so like should we expect working capital intensity to uh moderate as volumes stabilize? 35:25 35 minutes, 25 seconds No. So uh just to answer your question specifically we are not in that game where we stock inventories. We we we 35:34 35 minutes, 34 seconds among the peers we have the least amount of inventories. Hence there is no impact of inventory gain or inventory loss. Uh 35:42 35 minutes, 42 seconds we are not very high on the transformer oil business. So my dattors will still stay within that 65 70 days. So I don't 35:50 35 minutes, 50 seconds see any increase in the in the working capital with the increase in turnover. It will stay around the same days. 35:59 35 minutes, 59 seconds Okay. Okay. So uh the uh like you cater to both the large uh FMCG players and a broad customer base. So like how do you 36:09 36 minutes, 9 seconds uh you know balance scale customers versus the uh diversification? 36:14 36 minutes, 14 seconds Obviously uh there are channels in place you know to take care of our small customers as well and large size customers as well. Obviously you know 36:22 36 minutes, 22 seconds with uh with international clients uh the buying is more uh uh you know the buying is more specific you know there 36:29 36 minutes, 29 seconds are uh there are budgeting in place you know there are quarterly forecasting in place you know which helps us in planning better uh this way you know it's easier for us you know to penetrate 36:38 36 minutes, 38 seconds with this customers and grow with the customers. 36:42 36 minutes, 42 seconds Okay. So uh like just a follow up on this like does uh onboarding large customers uh typically translates uh into the multi-product opportunities over time? 36:53 36 minutes, 53 seconds Yes, it does. It does. Okay. Okay. Okay sir. Thank you. 37:02 37 minutes, 2 seconds Thank you. The next question is from the line of Mr. Rajesh Agraal from Manior. Please go ahead. 37:10 37 minutes, 10 seconds Sir my question is is the business uh sequentially we have not done so well quarterly we have done well is the business seasonal in nature that is the 37:18 37 minutes, 18 seconds first question there's a bit of cyclical impact little bit of cyclical impact I mean if you see our revenue uh yeah quarter on 37:27 37 minutes, 27 seconds quarter it is primarily you know range I mean there not a huge volatility like uh say 500 crores in one quarter and thousand crores in another quarter it's 37:35 37 minutes, 35 seconds not like that it's still range but yes I mean uh post monsoons I mean during monsoon the the business is little bit low but I mean quarter three and quarter 37:43 37 minutes, 43 seconds four are better uh better performing quarters for us historically. So we are looking for and the next question uh is the demand from SNCG for the cream products like 37:52 37 minutes, 52 seconds white oil or personal products that is a good demand driver because I was reading a report by Nelson the 38:00 38 minutes are our products used being for hair cream and cosmetics. 38:04 38 minutes, 4 seconds So what is your question? My question is is our product being used for uh hair cream main products and cosmetic products. 38:15 38 minutes, 15 seconds The the application of our white oils is across various industry for cosmetic industry. Yes, it's used in manufacturing of creams, lotions uh and 38:22 38 minutes, 22 seconds stuff like that. In pharmaceutical as well, it's used in manufacturing of your creams, ointments and so on. Uh and also in you know like various like for 38:31 38 minutes, 31 seconds example say various manufacturers are there like say tiger or wick vapor and so on. Okay, this is an application for products. 38:37 38 minutes, 37 seconds Okay, so how is the demand holding there? Are you seeing demand good demand from there? 38:42 38 minutes, 42 seconds I mean it's not a healthy demand but demand is at least better than last year. 38:46 38 minutes, 46 seconds Last year and going forward you feel the demand will come from there. No, that's yeah we anticipating demand up happening 38:54 38 minutes, 54 seconds uh uh as just highlighted in our previous discussion. Okay. Thank thank you sir. That's it. 39:02 39 minutes, 2 seconds Thank you. A a reminder to all the participants who wish to ask a question, you may press start and one at this 39:09 39 minutes, 9 seconds time. The next question is from the line of Mr. Rohit from I thought PMS. Please go ahead. 39:18 39 minutes, 18 seconds Am I audible? Yeah. Yeah. Audible. 39:22 39 minutes, 22 seconds I just wanted to understand what is the peak uh uh revenue that we can do from our current uh capacity of six lakhs kilometers. 39:32 39 minutes, 32 seconds Repeat revenue. 39:34 39 minutes, 34 seconds Yeah, I'll tell you. So, so 6 lakh kil kil liters there is another 39:41 39 minutes, 41 seconds 30% of 2 lakh 25,000 kale which can be increased when the is shar plant comes onto stream and becomes close to about 39:49 39 minutes, 49 seconds 100%. So that is the highest we can do right now with the existing uh installed capacity. 39:59 39 minutes, 59 seconds So that's about 60,000 K. 40:03 40 minutes, 3 seconds Uh so you're saying 6 lakh 60,000 is what you can do at peak. I mean if you can use 40:10 40 minutes, 10 seconds No, not six lakh 60. No no no no no five five lakhs. Five lakhs is that uh six lakhs is the total installed capacity. 40:20 40 minutes, 20 seconds So right another another 30% increase another 30% of 20. So 60,000 will come will come up 40:27 40 minutes, 27 seconds by uh the next 2 years or so and in terms of revenue sir uh in terms 40:36 40 minutes, 36 seconds of revenue should we how should we look at it? I know prices are fluctuating but just generally as a maybe at current 40:43 40 minutes, 43 seconds prices what can we do as a peak revenue 7,800 rupees per liter or 7,800 rupees 40:51 40 minutes, 51 seconds or 7,500 rupees per kil it okay so okay so got it and hence 40:59 40 minutes, 59 seconds maybe you're looking at expanding the capacity and on this exports so while exports are 41:08 41 minutes, 8 seconds a big contributor uh uh in terms of revenue but I also wanted to just check like over the last 3 four years we've been rangebound 41:16 41 minutes, 16 seconds around that at 140 150 crores of course this year we'll probably hit around 170 180 crores uh but in exports like what 41:24 41 minutes, 24 seconds is the uh I mean what what do you think can be the potential can this be like 60 70% of 41:32 41 minutes, 32 seconds revenues uh let's say three four years out or it'll be more steady and the share of revenues will be around these 41:39 41 minutes, 39 seconds levels only. So, oh, so we probably exports could go up by another 5 10%. It will not be 60 70% 41:47 41 minutes, 47 seconds of total uh revenues. So, it could be 50 55%. That's that's what we see in the next in the short medium term. 41:57 41 minutes, 57 seconds And are they better margins and better uh I mean return on capital wise they are better or they similar slightly slightly better exports gets a 42:06 42 minutes, 6 seconds slightly better margins and working capital also is is similar there in terms of your receivables etc. 42:16 42 minutes, 16 seconds Yeah. Yeah. Yeah. Receivables is around the 60 odd days. uh but exports exports in working capital we is is slightly 42:24 42 minutes, 24 seconds better because we work on a lot of advance and against LC's so datas is slightly better managed over there. 42:33 42 minutes, 33 seconds All right. Okay. And the last question uh I mean uh in terms of your product profiling I mean uh is there anything 42:43 42 minutes, 43 seconds that you're doing to sort of improve your product profile or differentiate let's say maybe only very specific 42:50 42 minutes, 50 seconds formulations for your for a specific customer or a specific suit of products. 42:56 42 minutes, 56 seconds Uh is there something that you can you're doing there? uh or you you may want to talk about something on that line or 43:04 43 minutes, 4 seconds Yeah, I mean uh definitely we are you know in close uh interaction with a few of our multinational customers where we have we are formulating a specific 43:12 43 minutes, 12 seconds product for them but these are still under R&D trials because of the NDS it's difficult for me to you know give more further information but uh yes uh there 43:20 43 minutes, 20 seconds are there are there are you know some new products which are being worked with the customers. 43:28 43 minutes, 28 seconds Okay. And at this point of time what portion of revenue would be such products or so I mean these are the new products 43:36 43 minutes, 36 seconds which are under development right so there will be no such revenue generated as of this products. 43:41 43 minutes, 41 seconds Okay. So okay uh what I what what I wanted to understand was sir that I mean uh typically if the products are 43:48 43 minutes, 48 seconds differentiated or if there is a very lot of R&D that we have done with the customer and we are closely sort of tied 43:55 43 minutes, 55 seconds in with them then it'll be uh then we'll be probably the sole supplier or one of the sole suppliers or one of the key 44:03 44 minutes, 3 seconds suppliers for them. So right now do we have such revenue in the system like such a share of 44:12 44 minutes, 12 seconds there are few products yes where we are source suppliers you know to some certain specific customers uh the revenue I mean you know overall scheme 44:19 44 minutes, 19 seconds would be far minimum but uh uh I mean if you ask on the FMCG point of view obviously you know with some specific product would be in the range of 72% of 44:28 44 minutes, 28 seconds the total revenue on the PHP PHP products Got it. Got it. Okay. Thank you very much. This is all I had. Thank you. 44:40 44 minutes, 40 seconds Thank you ladies and gentlemen. That was the last question. I would now like to hand the conference over to Miss Aayushi Gupta for closing comments. 44:51 44 minutes, 51 seconds I would like to thank the management for taking the time out for the conference call today and also thank all the participants. If you have any queries, 44:59 44 minutes, 59 seconds please feel free to contact us. We are MG in Time Private Limited, investor relation advisor for Gandhar Oil Refinary India Limited. Thank you so 45:08 45 minutes, 8 seconds much on behalf of Gandhar Oil Refinery India Limited. That concludes this conference. 45:17 45 minutes, 17 seconds Thank you for joining us and you may now disconnect your lights.