Punjab Chemicals and Crop Protection Limited — Q4 FY26

Punjab Chemicals and Crop Protection Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=AyeCgplutWo Published: 8 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Punjab Chemicals and Crop Protection Limited 4Q and FI26 post 0:10 10 seconds Brazil conference call hosted by Andex stock broking. 0:14 14 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:22 22 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. Please 0:30 30 seconds note that this conference is being recorded. I now hand the conference over to Mr. Rich Dooi from Antic Broking. 0:38 38 seconds Thank you and over to you sir. 0:41 41 seconds Thank you Vuja. Uh a warm welcome to all the participants on today's uh call of principle and cost selection. From the 0:48 48 seconds management side we have Mr. Salish, managing director, Mr. Vinod Gupta CEO Mr. Deender CFO on the calls without 0:56 56 seconds further delay I hand over the call to Mr. without his opening post which we will open the floor of Q& thank you and over to you sir. 1:05 1 minute, 5 seconds Thanks and good afternoon to everyone. 1:09 1 minute, 9 seconds Thanks for joining us today for this earning call for the fourth quarter and full year of ended on 31st 31st March 2026. 1:19 1 minute, 19 seconds I'm joined by Mr. Salish managing director uh Mr. Dendra Gupta CFO and Mr. 1:26 1 minute, 26 seconds Vishan Singh head of our finance and we sincerely appreciate your continued interest in our company. 1:33 1 minute, 33 seconds I trust you have had an opportunity to review our financial results and investor presentation which are available on stock exchange and or on 1:41 1 minute, 41 seconds our website. Let me begin with the overall industry environment. As you are all aware uh the global geopolitical 1:49 1 minute, 49 seconds situation in last two months have resulted in creating supply chain disruptions, sudden price changes and recalibration of demand cycle. We 1:58 1 minute, 58 seconds continue to operate in this dynamic environment are and are monitoring the situation and impact very closely. While 2:06 2 minutes, 6 seconds uh before this uh disturbances occurred there was a gradual recovery in global demand supported by normalization of 2:13 2 minutes, 13 seconds channel inventory. The industry is now witnessing renewed volatility driven by 2:20 2 minutes, 20 seconds supply chain disruptions, rising raw material and logistics cost. 2:25 2 minutes, 25 seconds At the moment, market seems to be ready to accept uh incremental price gain given the fear of shortage of certain 2:33 2 minutes, 33 seconds base molecules. Um however uh if the prices increase are beyond a certain level there is a resistance in 2:40 2 minutes, 40 seconds the market and China's response to the situation is being tracked very closely. 2:46 2 minutes, 46 seconds Tighteners in supplies have resulted in firming up prices across generic molecules and all the intermediates in this environment. We continue to 2:55 2 minutes, 55 seconds focus on centering our core fundamentals and executing our long-term strategy. 3:01 3 minutes, 1 second Coming to our performance, we delivered a resilient performance during the year despite uh challenging operating environment. We recorded highest ever 3:09 3 minutes, 9 seconds revenue for our company from operations during this period at uh rupees 1029.8 crores growing by 14.4 14.4% yearonear. 3:21 3 minutes, 21 seconds Our volumes remain stable across all the products with improved capacity utilization in key divisions. Our new 3:30 3 minutes, 30 seconds product addition and growth of the new molecules that we have added in the last two three years are seeing um very good 3:37 3 minutes, 37 seconds growth. We believe we are now moving from consolidation phase over the last 2 three years to growth phase with our efforts to bring in new products have 3:46 3 minutes, 46 seconds started yielding dividends. Our performance reflects the strength of our diversified business model across a 3:53 3 minutes, 53 seconds agrochemicals, performance chemicals and industrial chemicals as well as our continued focus on operational efficiency and product mix optimization. 4:02 4 minutes, 2 seconds Next year we will see uh addition of more new products to our portfolio in agrochemicals and specialy chemical 4:09 4 minutes, 9 seconds segment. In the last quarter, we had also taken one major debater linking exercise to expand capacity of one of 4:18 4 minutes, 18 seconds our new molecules that we introduced two years back as the demand is growing very fast and product is being accepted very well in the market. We continue to 4:28 4 minutes, 28 seconds invest in R&D with focus on complex and differentiate chemistry. Our pipeline of new products remain strong particularly 4:35 4 minutes, 35 seconds in the molecules which are going off patent and we are confident of sustained contribution from our new product introduction in coming years on our 4:44 4 minutes, 44 seconds ongoing capex initiatives. Uh the debuting of various capacities and addition of new manufacturing blocks are 4:53 4 minutes, 53 seconds progressing as per planned. These investments are aligned with our increasing global opportunity and broader make in India theme positioning 5:01 5 minutes, 1 second us well to create uh capture incremental demand. We remain focused on improving our efficiencies, optimizing cost and 5:08 5 minutes, 8 seconds enhancing our asset utilization. Our efforts towards strengthening our customer relationship and expanding our global footprint are also yielding positive results. 5:18 5 minutes, 18 seconds We continue to prove progress on the MOS that we signed earlier and these products are slated for commercialization in FY27. 5:27 5 minutes, 27 seconds Overall, despite near-term handwriting opportunities as the industry stabilizes 5:37 5 minutes, 37 seconds now with this, I will hand over the call to our CFO Mr. Deendra Gupta. He will share the financial highlights and performance with you. 5:48 5 minutes, 48 seconds Uh thank you viny and good afternoon everyone. Uh thank you for joining on this call. I'll take you through the financial performance for the uh last 5:57 5 minutes, 57 seconds quarter and full year ended 31st March 2026. 6:02 6 minutes, 2 seconds Starting with the quarterly performance our uh consolidated revenues from operations for Q4 FY26 stood at INR 28.6 6:11 6 minutes, 11 seconds 6 crores as compared to NR 202.3 crores in the corresponding quarter of last financial year reflecting a growth of 6:19 6 minutes, 19 seconds 3.1% on yearon-year basis. The domestic revenues have grown by 8.4%. 6:25 6 minutes, 25 seconds However, the export saw a marginal decline of 4.8% during the quarter under review. uh as energy explained our new 6:32 6 minutes, 32 seconds products have been adding good contribution and for the full financial year they contributed around 14% 6:40 6 minutes, 40 seconds uh to the top line growing by 16% in the uh over the last financial year the growth was primarily driven by stable 6:48 6 minutes, 48 seconds volumes and marginal pricing improvements across select segments partially offset by deferment of some export sales in the first quarter of 6:56 6 minutes, 56 seconds FI27 due to the ongoing geopolitical situation Our gross margins for the quarter stood at 49.4% 7:04 7 minutes, 4 seconds up by 580 basis points on a yearly basis. The AITA for the quarter stood at 7:11 7 minutes, 11 seconds INR 27.5 cr which is also up by 7.9% on Y basis with AITA margins at 13.2%. 7:21 7 minutes, 21 seconds Profit after tax for the quarter is at 11 crores up by 55.8% 8% on annualized basis with pack margins being 5.3%. 7:32 7 minutes, 32 seconds Now coming to the full year performance the consolidated from operations for FY26 stood at INR 1,29.8 7:41 7 minutes, 41 seconds crores reflecting a robust growth of 14.4% yearon-year basis. Gross margins for the 7:48 7 minutes, 48 seconds full year stood at 40.1% while AITA stood at INR 118.1 cr with margins being 7:56 7 minutes, 56 seconds 11.5% growing by 19.1% on uh over FI25 8:03 8 minutes, 3 seconds packed for the full year stood at INR 64 crores as compared to 39 crores in the last financial year translating into a solid growth of 64.3%. 8:15 8 minutes, 15 seconds From a segment perspective, our domestic and export businesses both witness stable performance supported by improved demand conditions in the select 8:23 8 minutes, 23 seconds geographies and continued focus on customer diversification. Our capacity utilization across manufacturing sites 8:30 8 minutes, 30 seconds remained healthy during the quarter and full year supported by improved operational efficiencies. The agrochemical division operated at around 8:38 8 minutes, 38 seconds 81% capacity utilization. The performance chemical division at around 65% and the industrial chemical division continued to operate at the level of around 90%. 8:49 8 minutes, 49 seconds Overall, our focus remains on driving profitable growth, improving margin and maintaining financial discipline in a dynamic operating environment. 8:59 8 minutes, 59 seconds Uh with this I conclude my financial remarks and request the moderator to open the floor for Q&A. Thank you. 9:08 9 minutes, 8 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 9:17 9 minutes, 17 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 9:26 9 minutes, 26 seconds question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 9:45 9 minutes, 45 seconds First question is from the line of Janam Kilani from Swan Investments. Please go ahead. 9:52 9 minutes, 52 seconds Hi sir, thanks for this opportunity and congratulations for achieving the highest ever annual revenue. So my first question is that over the last two to 10:01 10 minutes, 1 second three years we've almost increased our cross block by 30%. So that's almost 100 crores. So would you be able to give us a split as to what is the growth capex 10:09 10 minutes, 9 seconds in this and what is the maintenance capex within the same? 10:15 10 minutes, 15 seconds I think so first of all thanks Jenn for joining and uh uh the the as you know that year on year we have been investing 10:24 10 minutes, 24 seconds on the on the asset renewal as well as capacity debt making and capacity increase. 10:32 10 minutes, 32 seconds U I think exact breakup uh is not available but as you know I mean is not readily available with me but uh on year 10:40 10 minutes, 40 seconds one year we are investing about 25 to 30 crores for asset renewal. So that's the kind of gross block increase on account of asset renewal per year. So if you 10:49 10 minutes, 49 seconds take 2 years it should be around anywhere between 55 to 60 crores and 35 to 40 crores is on account of capacity 10:56 10 minutes, 56 seconds addition or any um capex related to compliance improvement and also debottling. 11:07 11 minutes, 7 seconds Okay and so what could be the approx cost benefits that we could get? So we would have taken cost optimization over the last 2 three years. So what could be 11:15 11 minutes, 15 seconds the improvement in margins that we can see from the same? 11:20 11 minutes, 20 seconds I think asset renewal generally is more around making sure that the business continue to continually remains because 11:27 11 minutes, 27 seconds in an asset which is 3540 year old becomes safety risk in a big way and whenever we do such such uh capexes 11:36 11 minutes, 36 seconds obviously we factor in better designs and some efficiency improvements. Now those initiatives are on a continuous 11:44 11 minutes, 44 seconds basis and it's difficult to sort of differentiate what comes out of this revamping and what is a part of our regular exercise or we can say that yes 11:52 11 minutes, 52 seconds we have been able to uh on our mail molecules we have been able to reduce our uh raw material cost by anywhere 12:00 12 minutes between 15 to 20% on most of our products and uh sir however let me add one more 12:10 12 minutes, 10 seconds let me add one thing. However, because given the competitive market scenario, uh obviously that has not got reflected margin in the bottom line, but it has helped us to maintain our market share. 12:22 12 minutes, 22 seconds Okay. And uh as we mentioned on the previous call that the threeus could give us almost 140 to 150 crores revenue 12:29 12 minutes, 29 seconds at peak and since we're introducing three to four new products this year too. So can we expect that by FI28 our 12:37 12 minutes, 37 seconds revenue can be from the current facilities it can reach around 1 1400 to500 crores. 12:45 12 minutes, 45 seconds Yeah I think that's a safe assumption. 12:48 12 minutes, 48 seconds So within the next few years we can almost we hold on to our guidance of 15 to 20% revenue growth. 12:55 12 minutes, 55 seconds Yes. Right. I think we are holding on to that guidance. uh unless and until this geopolitical situation suddenly creates a havoc where the raw materials are not 13:03 13 minutes, 3 seconds available or some other things happen uh our product introduction and our market share that we have been able to hold in 13:11 13 minutes, 11 seconds the market we continue to hold our guidance of 15 to 20% year-on-year growth. 13:18 13 minutes, 18 seconds Okay. And uh sir as we mentioned in the commentary too that the share of new molecules have increased and we've also 13:25 13 minutes, 25 seconds taken cost reduction measures. Why has it not been reflected in our gross margins? The even though the share is increasing. So as you had mentioned that 13:32 13 minutes, 32 seconds the new molecules would be having better margins. 13:36 13 minutes, 36 seconds So I think what happens is when you introduce a new molecule initial phase is a learning phase where your main uh 13:44 13 minutes, 44 seconds initial initial idea is to see that you can uh supply 13:58 13 minutes, 58 seconds Ladies and gentlemen, please stay connected. We have lost the line for Mr. Vat Gupta. 14:25 14 minutes, 25 seconds Birthday night. 15:11 15 minutes, 11 seconds Sorry. 15:22 15 minutes, 22 seconds Hallelujah. 15:35 15 minutes, 35 seconds Me. 15:53 15 minutes, 53 seconds Ladies and gentlemen, thank you for patiently holding. We have line for Mr. Gupta reconnected. Over to you, sir. 16:00 16 minutes Uh, sorry, we got disconnected. Hello. Yeah, sir. 16:06 16 minutes, 6 seconds Sorry, we got disconnected. So uh uh so when we launch a new molecule initially our idea is to make sure that we meet 16:13 16 minutes, 13 seconds the quality requirement and the delivery requirement and then our R&D team continuously puts effort to improve cost 16:20 16 minutes, 20 seconds and all. So our products have been well accepted and now the journey towards u coming to the right cost and making sure that we our margins improve has just 16:28 16 minutes, 28 seconds started now. So you will start seeing those uh positive uh um upsides in coming quarters. 16:39 16 minutes, 39 seconds So sir what could be the margin improvement that one can foresee by in FI27 and FI28 if you could give us some guidance. 16:47 16 minutes, 47 seconds I think if you if you consider a stable business scenario as we have been saying that gradually over the next two to three years we want to improve our beta 16:55 16 minutes, 55 seconds margin from around 12% to 15%. And that's the direction we will take for the complete product uh for the whole business as a whole. 17:05 17 minutes, 5 seconds Okay. 17:06 17 minutes, 6 seconds And uh so I I saw that you mentioned in your presentation that we still have uh the idea of our green field capeex. So 17:14 17 minutes, 14 seconds any uh idea on the same that like over which year can we see and what could be the quantum for the same and any plans 17:21 17 minutes, 21 seconds for debt reduction in the next two years. 17:27 17 minutes, 27 seconds So I think as far as our field can you hear me? Yes sir. 17:35 17 minutes, 35 seconds Yeah. So, uh this is Shal. So, uh regarding the green field as we have been mentioning that uh we have finalized one or two but unfortunately 17:44 17 minutes, 44 seconds because of the due diligence it didn't go well but we are uh very strongly working on the same and as and when it 17:51 17 minutes, 51 seconds happens we should be announcing uh within the Q2 or Q3 of this year. As far 17:58 17 minutes, 58 seconds as debt uh reduction goes, I think uh if you see our debt equity ratio is is 18:03 18 minutes, 3 seconds pretty good. Uh basically there are no movements to increase the debt but as 18:11 18 minutes, 11 seconds and when there is something we'll keep uh everybody informed. 18:16 18 minutes, 16 seconds Okay. So just one last question from my side. So because of the Middle Eastern crisis are we facing any issues in the 18:23 18 minutes, 23 seconds exports currently because majority of our exports are Europe focused. So any problems out there or it's smooth? I 18:30 18 minutes, 30 seconds think export cost has gone up. Um but I mean but we have not seen any uh any order cancellation or any deferments. 18:41 18 minutes, 41 seconds Only thing the cost has gone up and so far customer has accepted increase in those costs. But if that if this 18:49 18 minutes, 49 seconds increase becomes significantly higher than what it has been so far then we'll have to see overall how does the market react to it. 18:57 18 minutes, 57 seconds Okay. So that's it for my thank you and all the best. Thank you. 19:03 19 minutes, 3 seconds Thank you. Participants who wishes to ask a question, please press star and one. The next question is from the line 19:10 19 minutes, 10 seconds of Kiran GG from Nights Capital Management. Please go ahead. 19:15 19 minutes, 15 seconds Hi, good afternoon. So in the pipeline we have seven products and threeus. 19:21 19 minutes, 21 seconds So could you please provide more details regarding them like the status which sector is it for is it for domestic or 19:29 19 minutes, 29 seconds export client and lastly revenue and margin expectations from them. 19:36 19 minutes, 36 seconds So basically all these products are under confidential uh agreement. So we will not give you the product uh name but we can tell you that approximately 19:44 19 minutes, 44 seconds 60% is on agrochemicals AI where we have uh a good uh uh business out of which 19:52 19 minutes, 52 seconds two are for Japanese customers and three are for the European customers. The other part are specialty products are 19:59 19 minutes, 59 seconds again uh for both domestic as well as uh European uh customers including North America. As far as margins are 20:08 20 minutes, 8 seconds concerned, as we have been always saying that these new products are are are high value and we envisage in the next two 20:15 20 minutes, 15 seconds years as Renard did tell you that we are targeting 15 anywhere between 15 to 16% in the next uh financial year and then 20:24 20 minutes, 24 seconds gradually growing to 18% in the next 2 to 3 years. 20:30 20 minutes, 30 seconds Okay. And are we on track to double the revenue of industrial chemical in two years? 20:39 20 minutes, 39 seconds Yeah, I mean at the moment we see as you see our industrial chemical also we have started exporting 20:46 20 minutes, 46 seconds to Southeast Asia. So this revenue also will in the next two years uh what we envisage right now will be at least doubling that sales. 20:57 20 minutes, 57 seconds Okay. Okay. Thank you. Thank you. Thank you. 21:03 21 minutes, 3 seconds Participants to ask a question please press star and the next question is from the line of VJ Mahadevia from Mariko. Please go ahead. 21:12 21 minutes, 12 seconds Go ahead. 21:14 21 minutes, 14 seconds Hello. This is a followup your participants question. Uh more on the raw material sourcing side again. Are you facing any challenges in 21:22 21 minutes, 22 seconds procurement? How much of your procurement is from domestic sources versus international and any logistics challenges and or costs involved? 21:32 21 minutes, 32 seconds So I think we are our dependency on sorry to interrupt you Mr. V. There is a 21:40 21 minutes, 40 seconds disturbance coming from your line. Can you please mute yourself when management is answering your question? Question. Sure. Thank you. 21:49 21 minutes, 49 seconds Okay. So um our dependency on import from various geographies including China is about 25%. 21:58 21 minutes, 58 seconds And rest of the material is domestic. 22:01 22 minutes, 1 second Now so far we have been able to secure the raw material and we have been uh and 22:09 22 minutes, 9 seconds we have been able to convince most of our suppliers to honor the old contracts. Uh and now for the next quarter again discussions have started. 22:17 22 minutes, 17 seconds So at the moment we have not we have seen some incremental prices cost increase but overall supply chain we have not seen any disturbances also 22:26 22 minutes, 26 seconds there is one interesting shift that is happening because of overall scenario some of the molecules or KRMs that we buy from China are becoming attractive 22:34 22 minutes, 34 seconds in India. So at the same time we have activated some local supply chain partners also that in case this prices 22:41 22 minutes, 41 seconds continue to remain strong uh we will develop a local supply chain to reduce the impact of overall disturbances. So 22:49 22 minutes, 49 seconds unless unless and until base molecules go over the supply chain we don't see interruptions coming in. 22:58 22 minutes, 58 seconds Excellent. Thank you. Thank you. Thank you. 23:05 23 minutes, 5 seconds Participants you may please press star and one to ask a question now. 23:10 23 minutes, 10 seconds The next question is from the line of Rohit ori from progressive shares. Please go ahead. 23:15 23 minutes, 15 seconds Uh hi team couple of questions. Uh the first one uh been we see that uh there is a good quality growth that is uh seen 23:22 23 minutes, 22 seconds in Punjab uh which is also because of the better mix as well as the volumes. 23:27 23 minutes, 27 seconds uh but do you think this uh gross margins uh that we have delivered in this quarter are these sustainable because generally we are in this range 23:36 23 minutes, 36 seconds of 40 to 40 uh two kind of a range. So do you think that this this is because of the raw material tailwinds and how sustainable is this? 23:47 23 minutes, 47 seconds I think if you recall our last year last quarter results uh something similar 23:54 23 minutes, 54 seconds where we are stocking up or we are building inventories for the next sales in the next quarter in order to take care of the sudden demand spurt which is 24:01 24 minutes, 1 second generally between April to October. So that's where um um that's where you'll see slightly higher gross margins in this quarter but overall continues. 24:11 24 minutes, 11 seconds Currently we are at about 40 42% gross margins and as we have indicated earlier we are gradually now looking at 24:18 24 minutes, 18 seconds improving this gross margin with the addition of new products and the new and change in the product portfolio. 24:25 24 minutes, 25 seconds Uh true sir uh because if you see uh that we become slightly heavier on the working capital side as well you know with these receivables as well as the 24:34 24 minutes, 34 seconds inventory being slightly up. So this is basically uh because of the demand you're saying and that is why you're stopping now. 24:41 24 minutes, 41 seconds Yes. Right. This is because of the demand and I think uh whatever inventory we carried at the moment all that inventory is already moved out of the 24:49 24 minutes, 49 seconds system and uh and it is already gone to the customers please and this will get reflected in Q1 actually. 24:57 24 minutes, 57 seconds Okay. Okay. Uh second one on this uh CDM of business I know it is early stage of uh transformation or transition for us 25:06 25 minutes, 6 seconds uh uh and Shalai also indicated that we might after 3 years try to reach somewhere like 17 18% AITA margins uh 25:14 25 minutes, 14 seconds but what are the few things uh that as a team in Punjab that you all are doing uh so that the uh CDMA business model 25:21 25 minutes, 21 seconds becomes slightly stronger or better uh and something on the pricing side as well as customer security uh because despite might been after 3 years maybe 25:30 25 minutes, 30 seconds 18%. We are still slightly behind uh the margin comparisons if we do with some of the peers in the market. 25:39 25 minutes, 39 seconds So I think uh as you know that we have been working uh very aggressively on our R&D and uh 25:48 25 minutes, 48 seconds uh and efficiency improvement and uh and with that we are able to attract better 25:56 25 minutes, 56 seconds customer uh uh customer and better product portfolio where the margins are going to be high. So it's more about creating that reputation with our 26:04 26 minutes, 4 seconds customer that yes we can uh we can not only do only CMO but also develop a product for them. So that's the main 26:12 26 minutes, 12 seconds initiative which is helping us to get more and more traction with more customers and at the same time our 26:19 26 minutes, 19 seconds efforts to continuously improve our yields and cost reduction on our 26:26 26 minutes, 26 seconds existing products is helping us and we believe that the market conditions will now slowly normalize and the prices 26:35 26 minutes, 35 seconds which have remained subdued over the last two to three year will also improve. So a combination of these two three factors will help us to reach that particular level. 26:45 26 minutes, 45 seconds On the customer side, uh are we looking at uh adding some more Japanese customers? 26:51 26 minutes, 51 seconds I think we are looking at adding more Japanese customers and more European customers. That has been our main main focus area and that's where we are working. 27:01 27 minutes, 1 second All right. uh on this uh uh the uh exportus that we have uh uh which might 27:08 27 minutes, 8 seconds commercialize in 27 are you facing any issues execution risk related because of the current geopolitical issues? 27:17 27 minutes, 17 seconds I think currently I'll say no there are no issues as of now and even if so we we are on the on track to commercialize all 27:26 27 minutes, 26 seconds the three products in FY27 there might be a delay of say a couple of months here and there because of 27:34 27 minutes, 34 seconds customer either trials getting delayed or anything of that sort but overall our relationship is very strong and uh we are confident that this will get commercialized in FI27. 27:44 27 minutes, 44 seconds Mhm. Last question from my side. Uh for this investment of uh 60 crores that uh we are doing currently what sort of ROC should be expected over here. 27:58 27 minutes, 58 seconds So I think u at the moment uh we are looking at at least three times where we assess that this uh business would bring in approximately 150 to 160 crores. 28:10 28 minutes, 10 seconds Okay. Thank you for answering my questions. Thank you. Thank you. 28:16 28 minutes, 16 seconds Thank you participants. You may press star and one to ask a question now. The next question is from the line of Aral Sha from SMG Finance. Please go ahead. 28:27 28 minutes, 27 seconds Yeah. Hi. Am I audible? Yes. Please go ahead. Yeah. Thank you for the opportunity. 28:34 28 minutes, 34 seconds Congratulation on the great setup member. So my first question was more with regarding to the pricing. So looking at the global scenario, are we 28:42 28 minutes, 42 seconds seeing any sizing improvement or are they still facing an intense competition from the Chinese player? 28:50 28 minutes, 50 seconds So Chinese competition cannot be wedged away. So that competition remains. But overall so far 28:59 28 minutes, 59 seconds uh our customers have sh accepted the price increase uh which has been mainly on account of uh raw material and fuel 29:08 29 minutes, 8 seconds prices that impact has been absorbed by the customer and we believe that even Chinese companies were looking at some 29:17 29 minutes, 17 seconds opportunity to increase prices. So they have also increased the prices and that's what has has has um has so far 29:27 29 minutes, 27 seconds been the situation. Going forward I think we believe that um Chinese companies will probably try to increase 29:34 29 minutes, 34 seconds prices even more uh given the raw material situation um which is becoming tighter and tighter. 29:42 29 minutes, 42 seconds Got it. And few days back we saw that uh China is gradually withdrawing its uh export incentive. So how this can be a 29:51 29 minutes, 51 seconds opportunity for the company for let's say next one or two years? 29:56 29 minutes, 56 seconds So I think what will happen is wherever the export duty is being withdrawn India supply chain is getting activated 30:04 30 minutes, 4 seconds because then uh the cost difference of say 12% or 13% is making lot of efforts that we had put in or our supply chain 30:12 30 minutes, 12 seconds partner in India they had put in their position is becoming now attractor so I see some of the supply chain shifting to 30:19 30 minutes, 19 seconds India uh on the molecules where the export duty has been withdrawn Got it. My next question was with 30:28 30 minutes, 28 seconds regards to the export. So we saw that the export revenue has been grown by almost 100 K uh 449 K in FI26 to uh 348 30:39 30 minutes, 39 seconds K in FI25. So how much of this recovery was volume driven and how much was the taken? 30:51 30 minutes, 51 seconds I think most of the most of the most of the recovery is due to volume because we didn't see a significant increase in the 30:59 30 minutes, 59 seconds prices of the product in the whole of last year except maybe in the month of March where after the disruption there 31:06 31 minutes, 6 seconds was some increases. So most of the revenue increases because of the volumes and demand for our existing product 31:14 31 minutes, 14 seconds which was better than last year and also a new molecule that we exported to various places. 31:21 31 minutes, 21 seconds Got it. That was all from my side. Thank you. Thank you. Thank you. 31:29 31 minutes, 29 seconds Participants please press star and one to ask a question. 31:34 31 minutes, 34 seconds The next question is from the line of Rohit Nagash from 361 Capital. Please go ahead and 31:41 31 minutes, 41 seconds thanks for the opportunity and congrats on a recovery in FA26. 31:46 31 minutes, 46 seconds Uh so first question again Belgium to CDMO. uh what would be the current contribution from CBM and given that 31:53 31 minutes, 53 seconds we've been aggressively scouting for new molecules plus commercialization of three molecules over the next 18 months 32:00 32 minutes uh what is the kind of contribution that we are looking uh say in next three years. Thank you. 32:07 32 minutes, 7 seconds So as uh as we have said that you know right now we are working on uh basically uh new products and this which in the 32:15 32 minutes, 15 seconds next two years should bring in a sales of anywhere between 150 to 200 C. This is additional new business out of new 32:22 32 minutes, 22 seconds products, right? And currently what could be the 3D or more contribution in FI26? 32:32 32 minutes, 32 seconds It should be anywhere between 24 to 26%. 32:38 32 minutes, 38 seconds Right. Uh second question in terms of uh the ability now to further debot our 32:46 32 minutes, 46 seconds capacity after the 50 cr expansion do we still have any uh ability to do that and 32:53 32 minutes, 53 seconds the concurrent question is that um we've been scouting for a new land parcel new facility since past two three years 33:02 33 minutes, 2 seconds unfortunately it is not materialized and given that there is limited scope for debot making will it have any 33:11 33 minutes, 11 seconds implication for growth say beyond FY 2829 if you're not able to get any land passing in the near term. 33:19 33 minutes, 19 seconds Thank you. 33:20 33 minutes, 20 seconds So I think as I did mention that uh you know uh we did look at uh two land parcels but because of some uh legal 33:29 33 minutes, 29 seconds issue we could not pursue it but right now we are very confident within the next as I mentioned that maybe by Q2 or Q3 we'll definitely will have a site 33:38 33 minutes, 38 seconds with us uh which will help in enhancing our uh business because business right now is very robust. we have a very good 33:47 33 minutes, 47 seconds um order book position as well as new inquiries which we need to materialize. 33:53 33 minutes, 53 seconds So uh definitely within this year or within this uh quarter two or quarter three we will have the land parcel 34:00 34 minutes announced and as far as the existing site goes we still have at our LU plant at least another two blocks could easily 34:09 34 minutes, 9 seconds come in because we have approximately 6 acres of land out of which if we do one block we will still be left with around 34:16 34 minutes, 16 seconds four three and a half or four acres which can easily bring in another two blocks. 34:22 34 minutes, 22 seconds uh just to clarify these two blocks how much kex can be done there. 34:28 34 minutes, 28 seconds So it depends on the product but approximately would be anywhere between 80 to 100 cr. 34:35 34 minutes, 35 seconds Sure. Uh that's helpful. Thanks a lot and all the best. Thank you. 34:42 34 minutes, 42 seconds Thank you participants. You may press star and one to ask a question. 34:48 34 minutes, 48 seconds The next question is from the line of Rahul Jen from Credence. Please go ahead. 34:54 34 minutes, 54 seconds Yeah, thanks for the opportunity. 34:58 34 minutes, 58 seconds So, uh you mentioned earlier to a question that most of the growth in the current year is volume led. There has 35:05 35 minutes, 5 seconds been hardly any price increase right for March 26 as a year as a whole. Yeah. 35:13 35 minutes, 13 seconds Yes, that's right. 35:14 35 minutes, 14 seconds Okay. Now so going ahead say for next year FI 27 and FI 28 what kind of volume growth do you advis considering the new 35:23 35 minutes, 23 seconds products which are coming in which are coming. 35:27 35 minutes, 27 seconds So I think our new products last year contributed additional about our new products at 16%. And this year I 35:37 35 minutes, 37 seconds think our new product the growth of the new product will be anywhere between 25% over the last year and that's what will 35:45 35 minutes, 45 seconds contribute our incremental review in the next year. 35:48 35 minutes, 48 seconds Our existing products like you know you know Metametron said they have been there for decades and we have been holding on to our market position. So 35:56 35 minutes, 56 seconds those volumes will remain uh will remain steady even in the next year with the incremental price improvement that we are seeing right now. 36:08 36 minutes, 8 seconds Uh-huh. So the see just to understand so last year 14% volume growth which we have seen roughly 36:16 36 minutes, 16 seconds we it will be if I can you know bifurcate that into new products and the existing product growth how we how do we 36:24 36 minutes, 24 seconds look at so I think most of the growth has come from new products in terms of volumes 36:31 36 minutes, 31 seconds uh existing product volumes have remained steady for most of the product because we have been holding say for example our products like metameron 36:38 36 minutes, 38 seconds where we have about 38 to 40% market share that we have been holding on to those those those kind of market share and we have seen steady demand from most 36:47 36 minutes, 47 seconds of the regions and so that's where or all most of our volume growth is coming from new products 36:54 36 minutes, 54 seconds okay and suppose this situation which happened the geopolitical situation for last few months now overall the raw 37:03 37 minutes, 3 seconds material prices on an average for us and the product prices on an average are for us what kind of increase we have seen. 37:11 37 minutes, 11 seconds I think it depends on product to product because it all depends on specific raw material that is coming in and how that raw material prices have moved in. For 37:20 37 minutes, 20 seconds example, if somebody as the average basket both the product side and the raw material side 37:31 37 minutes, 31 seconds it it's too dynamic. It's changing on every fortnightly basis and that's where we have moved to discussing prices on a fortnightly or monthly basis with our 37:40 37 minutes, 40 seconds customers. So if I give you a number today that will be wrong tomorrow. So it's difficult to say and that's why I said it is situation and specific basis 37:48 37 minutes, 48 seconds only thing the precaution that we are taking that we are not building our raw material position unless we get a confirmation from the customer so that 37:56 37 minutes, 56 seconds we don't take inventory bit. So that's a precaution we have we have taken this year and so this year can we expect around 38:04 38 minutes, 4 seconds 20% plus kind of revenue growth considering we are confidently we are yes contribution 38:13 38 minutes, 13 seconds yeah I think we are confident that we'll be able to touch 20% but we have maintain our guidance of 15 to 20% but yes we are confident that we'll be on 38:21 38 minutes, 21 seconds the upper range uh upper side of this range okay and for the gross margin of our new products versus the existing 38:30 38 minutes, 30 seconds product market basket. Uh will there be a kind of what kind of differential and will the gross margins which have hovered around 40% for last two years 38:39 38 minutes, 39 seconds leave aside the quarterly uh changes I'm talking about yearly gross margins have remained around 40%. plus. So can we 38:49 38 minutes, 49 seconds expect this year and next year the gross margins to move up by say 100 bits each year because of new product contribution increasing? 38:57 38 minutes, 57 seconds Yes, I think that's that's a fair assumption and that's what we've been maintaining our guidance. 39:02 39 minutes, 2 seconds Okay. Last thing sir uh uh just to clarify FI25 my the data which I have 39:11 39 minutes, 11 seconds put in my you know worksheets shows that in FI25 the new product contribution was roughly 12%. 39:20 39 minutes, 20 seconds And this year in FI26 it has gone up to 14%. Is that right? 39:25 39 minutes, 25 seconds Yes that's right. So then our new product contribution has actually on an absolute number have gone up from about 39:33 39 minutes, 33 seconds 108 crores to 145 crores which is almost 33 which is almost a 32 33% jump. 39:43 39 minutes, 43 seconds That's right. That's right. 39:45 39 minutes, 45 seconds Oh also also you have to understand that you know these products need registration. So as the registration flows come in, you will see more and 39:54 39 minutes, 54 seconds more of the same new product being going to various other countries. 40:00 40 minutes Sure. So my question was what I wanted to clarify in our presentation and in the call also I think we mentioned that 40:07 40 minutes, 7 seconds our new products have grown by around 16%. 40:11 40 minutes, 11 seconds So the sales value has gone up by 32 to 33%. 40:16 40 minutes, 16 seconds and 16% would be kind of volume growth or what are they? 40:20 40 minutes, 20 seconds I think it's it's a because there are multiple products of different values. So it's a volume growth actually. 40:26 40 minutes, 26 seconds Thank you so much. All the best. Okay. Thank you. 40:31 40 minutes, 31 seconds Thank you. Participants who wishes to ask a question may press star and one now. 40:38 40 minutes, 38 seconds The next question is from the line of Rajat CTR from I thought PMS. Please go ahead. Hi, thanks for the opportunity. 40:47 40 minutes, 47 seconds So my question is about the jump in growth margins 40:53 40 minutes, 53 seconds uh which have gone up by maybe 7 8% for sure but the big margins uh you know 41:02 41 minutes, 2 seconds remained pretty much in the same range as the last year or the last quarter. 41:08 41 minutes, 8 seconds So what resulted in loss of uh transmission of margin from gross to do you? 41:22 41 minutes, 22 seconds Yeah. Are you sorry are you talking about the last quarter or the year as a whole? 41:28 41 minutes, 28 seconds So last quarter Q4. 41:32 41 minutes, 32 seconds All right. uh so if you see the last quarter beta margins have also improved though not in the same proportion as the gross margin uh it has improved from 41:41 41 minutes, 41 seconds 12.6% in Q4 FI25 to 13.2% 2% in FQ4 FI26. 41:49 41 minutes, 49 seconds Uh there are several operating costs also associated which go into the uh uh this AITA with the gross mastering. So 41:59 41 minutes, 59 seconds there are employee costs which have gone up. There are other operating costs which have also gone up. 42:05 42 minutes, 5 seconds So uh given this increase may not and this kind of level will not sustain in the next quarter itself probably because 42:14 42 minutes, 14 seconds this is probably one of quarter if I see looking many temporal quarters. So sorry. 42:23 42 minutes, 23 seconds Yeah please go ahead. 42:25 42 minutes, 25 seconds Uh so uh is it fair to assume that our aida will probably fall a lot going forward? 42:33 42 minutes, 33 seconds So I I think you need to also uh remember what Binoji explained earlier that Q4 we did lot of inventory 42:41 42 minutes, 41 seconds manufacturing and therefore the gross margins were comparatively higher which will uh neutralize in the Q1. 42:50 42 minutes, 50 seconds So gross margin neutralized but what about the expenses additional expenses that happen in this quarter which 42:56 42 minutes, 56 seconds neutralize the point? No, no, they will also neutralize 43:04 43 minutes, 4 seconds going forward. So our AITA margin uh will remain more or less in this range. Okay. 43:10 43 minutes, 10 seconds So what was the nature of these expenses that happened in this quarter? I mean they were oneoff and what was I mean why was they run off? 43:20 43 minutes, 20 seconds I think some impact was of the because of the implementation of labor code. 43:25 43 minutes, 25 seconds Then there was some uh some fuel price increase that have happened because of the sudden uh increase in the crew and 43:34 43 minutes, 34 seconds other operating expenses that have gone up in the last quarter and I think we believe some of this is one time because this was an impact of sudden changes 43:43 43 minutes, 43 seconds which will get it is it will not be repetitive in nature. 43:48 43 minutes, 48 seconds and description. I think one final question uh given the increase in raw material cost because of spike in crude 43:55 43 minutes, 55 seconds prices uh to what extent uh do you expect the partn of that inflationary uh impact to our customers. 44:08 44 minutes, 8 seconds So far whatever price increase we have seen we have been able to pass on most of the cost to the customer. So far customer has accepted it. uh and as I 44:17 44 minutes, 17 seconds think as I mentioned in my opening remark also that if the prices further go up from here we might start seeing 44:24 44 minutes, 24 seconds resistance uh from customers because I think beyond a particular point there will be a threshold uh where customer confidence to liquidate that inventory 44:33 44 minutes, 33 seconds will be low. So so far the we have been able to pass on most of the increase of raw material to customers. 44:41 44 minutes, 41 seconds As a basket, what has been the price increase so far for us? Can you repeat again what you said? 44:49 44 minutes, 49 seconds As a basket of uh raw materials that we use, what has been the price increase for us? 44:55 44 minutes, 55 seconds I think I I think I responded to this question to earlier person also. It's difficult to say because each product 45:02 45 minutes, 2 seconds has 10 to 15 ingredients and each has a different impact. So maybe one product has an impact of 5% whereas other product might have an impact of 15%. 45:13 45 minutes, 13 seconds Depending on the material that is going into that product. So it's difficult to say that right now that's one and situation is too dynamic. If I give you 45:22 45 minutes, 22 seconds a number right now it might change maybe tomorrow. So that's well thank you so much sir. 45:29 45 minutes, 29 seconds Really appreciate your answer. 45:32 45 minutes, 32 seconds Thank you. participants to ask a question please press star and one I think we take two more questions 45:42 45 minutes, 42 seconds the next question is from the line of Mr. Raju delay from antic stop broking. Please go ahead. 45:54 45 minutes, 54 seconds Reju de please go ahead with your question. Your line is unmuted. Uh hope hope I'm audible now. Yes you are. Go ahead. 46:02 46 minutes, 2 seconds Yeah. So uh my my question is regarding the the key molecule prices. So if I look at some of the technical prices uh 46:12 46 minutes, 12 seconds over our last one to two months period maybe from the March to to April or May period. So few of the few of the 46:19 46 minutes, 19 seconds technical intermediate prices has gone up by 20 to 40% uh or or maybe 10 to 20 46:25 46 minutes, 25 seconds to 40%. Uh so so have we have we seen any kind of price jump in our key 46:31 46 minutes, 31 seconds molecules and if is if yes uh how much uh like like how is it the quantum of the uh price increases in in our key 46:40 46 minutes, 40 seconds molecules I think as I responded to this query earlier that uh whatever raw material price increase that we have seen which 46:50 46 minutes, 50 seconds is ranging say as you're saying is 10 to 40% we have been able to pass on to this price increase to our customer and 46:58 46 minutes, 58 seconds that's where the product price has also seen increase in the similar proportion. 47:04 47 minutes, 4 seconds Now uh so at at the moment those prices have got absorbed. Now if there is a 47:11 47 minutes, 11 seconds further increase in price from this level then customers will start recalibrating inventory and their business strategies and uh will decide uh how to take the business forward. 47:24 47 minutes, 24 seconds Understood. And so also like to like to understand the scenario since since uh it's it's it's it's uh May already. So 47:32 47 minutes, 32 seconds how is the how is the supply from the Chinese side in terms of the uh generic molecules in the global market. So that 47:41 47 minutes, 41 seconds has remained at the earlier level or there is some sustaining of Chinese Chinese exports aggression in the global 47:48 47 minutes, 48 seconds market. I think that supplied supplies have remained steady and uh in fact they've also utilized this opportunity 47:56 47 minutes, 56 seconds to increase prices of certain product because they are also seeing an increased raw material prices. So the competition if you're asking about 48:05 48 minutes, 5 seconds competition yes competition remains as stiff as it was in the past. Um however 48:12 48 minutes, 12 seconds uh going forward if this price increase continues I think uh I believe that India uh Indian producers like us will 48:21 48 minutes, 21 seconds have an advantage over the Chinese in long run. 48:26 48 minutes, 26 seconds Understood. And sir uh in your in your uh earlier remarks that you have said that uh some of the orders which have 48:33 48 minutes, 33 seconds differed uh from Q4 to Q1 if you could quantify that number if it is possible. 48:39 48 minutes, 39 seconds I think we we we'll not like to quantify that number. What we have started doing that you know say as I said most of us 48:47 48 minutes, 47 seconds say for example we are herbicide ready product portfolio herbicide demand globally is between April to October. So 48:55 48 minutes, 55 seconds we have started producing some of these materials in the month of Jan March inventorizing it so that we can capture 49:02 49 minutes, 2 seconds that particular cycle and get an incremental business of say 5 10% on our existing products because this inventory 49:09 49 minutes, 9 seconds inventory buildup is happening on most mostly on our existing products new products are anyway whatever we produce 49:16 49 minutes, 16 seconds is getting sold. So I think once you look at your quarter or say four quarter average numbers you probably can calculate on your own. 49:26 49 minutes, 26 seconds Yeah. Understood. So so uh if if I look at your inventory days it is it is similar to last year number roughly 49:33 49 minutes, 33 seconds around 150 days or uh compared to the last last four five years average that is 100 days old. So are we are we 49:41 49 minutes, 41 seconds expecting any kind of a increase in the prices for the end molecule or the RN uh for that we are you know storing the RN 49:49 49 minutes, 49 seconds or the end molecule or it is just we are anticipating the demand to come uh in in in in ordering quarters I think what we 49:58 49 minutes, 58 seconds do is we generally produce against the firm demand we don't produce to stock it's only that the pickup from the customer starts from April onward so 50:06 50 minutes, 6 seconds whatever inventory we are carrying is against the firm demand And most of the inventory as I indicated earlier has already been liquidated in April or 50:14 50 minutes, 14 seconds whatever is remaining will get remain liquidated between May and June. So you will see inventory level coming back to normal by by end of quarter one. 50:24 50 minutes, 24 seconds Understood. 50:27 50 minutes, 27 seconds Okay. Uh thanks thanks. Uh that's all from my side. Thank you. 50:32 50 minutes, 32 seconds Thank you participants to ask a question you may please press star and one. 50:38 50 minutes, 38 seconds The next question is from the line of Rahul Ren from Kinsville. Please go ahead. 50:44 50 minutes, 44 seconds Uh sir uh what is the NDS capeex for the current year FI27 and if you can break that into the uh 50:53 50 minutes, 53 seconds maintenance capex for the existing plant upgradations and the growth capex. 51:01 51 minutes, 1 second So we I'll break it into three parts. So first is our maintenance or asset renewal capex is going to be between 25 51:08 51 minutes, 8 seconds to 30 crores. Uh that's a run rate we have been maintaining uh and another 20 crores for either capacity debater 51:16 51 minutes, 16 seconds linking in our existing plant or say compliance related aspects um or maybe 51:23 51 minutes, 23 seconds product mix change. And uh then third one is our new production block that we have been indicating uh that capex will 51:30 51 minutes, 30 seconds be anywhere between 60 to 80 crores in this financial year. 51:35 51 minutes, 35 seconds Okay. So this is the total capex being planned for FI27. 51:39 51 minutes, 39 seconds This is FI27 and in case we anyway I think we have been looking at this green field and that that will be an add-on to 51:46 51 minutes, 46 seconds whatever we are saying right now. Are we looking at any acquisition since probably we have not been able to get a 51:53 51 minutes, 53 seconds new land but considering the environment maybe uh you know we might be getting some decent uh options or offers 52:02 52 minutes, 2 seconds all the options are on the table in fact as mentioned uh one of the two options that we were looking what was an XV 52:09 52 minutes, 9 seconds acquisition only which actually didn't materialize mainly because of the due diligence legal uh didn't pass through. 52:17 52 minutes, 17 seconds So we looking at both the options. Okay. Thank you. 52:26 52 minutes, 26 seconds I think we can take one last question now. So that was the last question for today. Okay. Thank you. 52:33 52 minutes, 33 seconds And I would I now like to hand the conference over to management for closing comments. 52:40 52 minutes, 40 seconds So thank you very much for joining for this uh uh Q4 as well as the financial 52:46 52 minutes, 46 seconds of Punjab chemicals. Uh I hope uh meod Bishan and Vendra could satisfy all your 52:54 52 minutes, 54 seconds questions and looking forward for catching up with you again during Q1. 52:59 52 minutes, 59 seconds Thank you once again and have a good day. Bye-bye. 53:05 53 minutes, 5 seconds Thank you ladies and gentlemen. On behalf of Antic Stock Broking, that concludes this conference. Thank you for joining us and you may now disconnect your lines.