Yasho Industries Limited — Q3 FY26

Yasho Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=M8VsgpvfG7E Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the Q3 FI26 earnings conference call of Yosho Industries 0:08 8 seconds Limited hosted by MEFG End Time. As a reminder, all participant lines will be in the listenon mode and there will be 0:16 16 seconds an opportunity for you to ask questions after the presentation concludes. 0:21 21 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:30 30 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Nikon from MEFG in time. Thank you and over to you sir. 0:40 40 seconds Thank you Sapnali. Welcome to Yeshu Industries Q3 FI26 earnings conference call from the management. Today we have 0:49 49 seconds Mr. Parag Zaviri, managing director and CEO and Mr. Chaksha, CFO. Before we proceed to the call, I would like to 0:57 57 seconds give a small disclaimer that the call may contain certain forward-looking statements which are based on business operations and expectations of the 1:05 1 minute, 5 seconds company as on today. A detailed disclaimer has been given in the company's investor presentation which was uploaded on the stock exchange. Now 1:14 1 minute, 14 seconds I would request to uh give his opening rem. 1:21 1 minute, 21 seconds Good afternoon everyone. 1:24 1 minute, 24 seconds Thank you for joining the Yaso Industries Q3 and Q4 FI26 earnings conference call. 1:33 1 minute, 33 seconds We appreciate your continued support and engagement. 1:38 1 minute, 38 seconds I hope you must have read the opportunity to review our results and the initial presentation shared earlier. 1:50 1 minute, 50 seconds The third quarter mark a period of steady and abroad based improvement for the company supported by healthier 1:58 1 minute, 58 seconds demand condition stronger volume traction for the 9 month period. Revenue stood at 2:07 2 minutes, 7 seconds 583.76 cr rupees reflecting 19% year-on-year growth despite an environment of 2:17 2 minutes, 17 seconds continued pricing volatility across certain products categories across global market. Customer sentiment 2:26 2 minutes, 26 seconds is gradually improving although some regions continue to experience microeconomic challenges and industrywide headwinds. 2:38 2 minutes, 38 seconds Even in this backdrop, demand for our key product group has remained stable which is evident in strengthening volume momentum witnessed during the quarter. 2:50 2 minutes, 50 seconds In Europe, the evolving India EU trade environment has supported improved engagement across multiple and use industries. 3:00 3 minutes Our European subsidiary now benefits from strong demand visibility for the coming year posing positioning us for 3:09 3 minutes, 9 seconds accelator growth and deeper penetration in this strategic region. 3:18 3 minutes, 18 seconds Operationally while our pakadel facility continued to operate below optimal utilization the impact on margin was effectively contained. 3:28 3 minutes, 28 seconds This was achieved through a combination of product mix refinement improved throughout efficiency and discipline cost control initiatives. 3:39 3 minutes, 39 seconds As a result we delivered an aida margin of 17.06% for the 9 month period. Our Pakadan R&D 3:48 3 minutes, 48 seconds center continue to strengthen our innovation pipeline through customer specific developments, application 3:55 3 minutes, 55 seconds trials and a new uh new chemistry positioning us to scale differentiate 4:03 4 minutes, 3 seconds and value effective chemistry in the year ahead. 4:10 4 minutes, 10 seconds on the growth investment fund. Our strategic manufacturing project with large MNC is progressing as planned. 4:21 4 minutes, 21 seconds The estimate cost of the project is approximately 85 to 90 cr which will be 4:28 4 minutes, 28 seconds fully funded by customer and we have already received an advance of rupees 19.9 cr. 4:37 4 minutes, 37 seconds Equipment deliveries are expected to begin in Q2 FI27 with commercialization target for Q1 FI28. 4:50 4 minutes, 50 seconds In parallel as part of our capacity announce announcement initiative we have 4:56 4 minutes, 56 seconds deployed rupees 25.9 cr toward two manufacturing lines focused on high 5:04 5 minutes, 4 seconds visibility product categories with sustained demand. 5:09 5 minutes, 9 seconds Trial runs for this length are expected to begin in March 26 and commercial production is planned for Q1 FI27. 5:21 5 minutes, 21 seconds Looking ahead, our long-term strategy under continue to gain momentum with the 5:28 5 minutes, 28 seconds commissioning of our two new lines and execution of LPS project. We expect 5:38 5 minutes, 38 seconds scale of our revenue in FI20 FI28 to approximately rupees 1,500 cr at around 5:47 5 minutes, 47 seconds 40% utilization of available space at Pakadan facility. 5:53 5 minutes, 53 seconds The facility infrastructure is already equipped to support 15 to 25% annual growth over the long term and we expect 6:02 6 minutes, 2 seconds a 4 to1 revenue to capex ratio for incremental investments. 6:09 6 minutes, 9 seconds FYI 26 and FY27 we remain confident of sustaining our growth stratey supported by strong 6:17 6 minutes, 17 seconds volume momentum improving domestic demand greater geographic diversification 6:24 6 minutes, 24 seconds and stable improvising margin. 6:28 6 minutes, 28 seconds A s focus on cash flow generation, working capital discipline and operational excellence will remain 6:35 6 minutes, 35 seconds central to our execution despite ongoing global uncertainty. We 6:41 6 minutes, 41 seconds believe yes indices is well positioned to build a stronger and more resilient 6:49 6 minutes, 49 seconds platform for growth as we move into FY27 and beyond. 6:55 6 minutes, 55 seconds Now I invite our CFO Mr. Chira Sha to take you through the detail financial update. 7:06 7 minutes, 6 seconds Good afternoon everyone. 7:08 7 minutes, 8 seconds I will take you through the key financial highlights for the quarter and 9 months ended FY26. Revenue for the quarter stood at 201.83 crores reflecting a 35% growth year-over-year. 7:20 7 minutes, 20 seconds The improvement in profitability continued as well with the quarter delivering an EITA margin of 16.65%. 7:29 7 minutes, 29 seconds Driven by sourcing efficiencies, operational discipline, and improved plant level productivity. Cash flow optimization remained a key priority. 7:40 7 minutes, 40 seconds This quarter, we continued tightening inventory practices, enhancing receivable collections, and synchronizing production cycles with 7:48 7 minutes, 48 seconds order visibility. These measures are progressing well and have a support and have supported a gradual reduction in 7:55 7 minutes, 55 seconds working capital intensity. As we move into Q4, we anticipate further improvement in the working capital days. 8:03 8 minutes, 3 seconds On the balance sheet front, our gross debt levels are expected to stabilize in the coming quarter. Reducing leverage 8:11 8 minutes, 11 seconds continues to be the central financial priority and we remain focused on lower lowering our debt to a beta multiple to 8:18 8 minutes, 18 seconds improve profitability, controlled capex deployment and strong cash generation from operations. With healthier demand 8:26 8 minutes, 26 seconds visibility, improving margin resilience and ongoing focus on cash flows and balance sheet strength. We believe our 8:35 8 minutes, 35 seconds company is well positioned to deliver consistent profitable growth over the coming quarters. Thank you and we now welcome your questions. 8:47 8 minutes, 47 seconds Thank you very much. We will now begin with a question and answer session. 8:52 8 minutes, 52 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 8:59 8 minutes, 59 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 9:06 9 minutes, 6 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 9:18 9 minutes, 18 seconds Participants, you may press star and one to ask a question. 9:32 9 minutes, 32 seconds We have the first question from the line of Paragarwal from Bastian Research. Please go ahead. 9:39 9 minutes, 39 seconds Hi, thank you for the opportunity. Uh I have just two three questions. So one is can you just help understand uh the reason for you know gross margin 9:47 9 minutes, 47 seconds compression uh if I look at sequentially or on a Y basis. Is it related to because of the tariff we have taken some 9:54 9 minutes, 54 seconds you know uh price tariff hit it on our books or is there something else to it? 10:01 10 minutes, 1 second No this is purely due to the change in the product mix also we went into the diversified market geographically. 10:12 10 minutes, 12 seconds So that is changed for a last quarter little in the profit market. 10:21 10 minutes, 21 seconds So this quarter we had strategically sold low margin products. Is that understanding correct? Yes. 10:27 10 minutes, 27 seconds And why is that? Well, that's demand of customer demand. 10:32 10 minutes, 32 seconds Okay. Got it. Uh okay. Secondly, so considering now you know has been reduced to 18 19% now in the US. So are you seeing uptake in inquiries this for this month and this quarter? 10:44 10 minutes, 44 seconds Well, we started seeing a discussion but to uh it will take a while to convert uh 10:52 10 minutes, 52 seconds into the reality because yet it has not been notified only the 25% has been notified of but the balance 25% is not 11:01 11 minutes, 1 second yet back to 18%. So far people may like to wait and watch. 11:08 11 minutes, 8 seconds Got it. Got it. And also you know we had some inventory backlog uh last quarter. 11:13 11 minutes, 13 seconds So I'm assuming it's yet to be cleared out. 11:18 11 minutes, 18 seconds We we see that the uh quantum is moving quite well. Okay. We are we do we know 11:25 11 minutes, 25 seconds that the sum of inventory has built up because purely we have to operate the plant at short-term efficiency and uh 11:33 11 minutes, 33 seconds looking at the visibility of the future order we have built up the stock. 11:37 11 minutes, 37 seconds Got it. Just a last question from my side. So uh in your presentation you mentioned around you know you're working with some of the you know MNC customers 11:45 11 minutes, 45 seconds with large revenue potential. So can you just highlight something more like some opportunity size or molecule or anything else that you can give around this? 11:55 11 minutes, 55 seconds [clears throat] 11:56 11 minutes, 56 seconds No I don't think so because as for our NDA we are not supposed to disclose much more information on the matter unless until we start the commercial 12:03 12 minutes, 3 seconds production. So I'm sorry for that. I cannot give you more insight. Sure. Okay. Thank you. Uh thank you so much and best of luck. 12:12 12 minutes, 12 seconds Thank you. 12:15 12 minutes, 15 seconds Thank you. A reminder to all the participants. You may press star and one to ask a question. 12:24 12 minutes, 24 seconds We'll take the next question from the line of Manish Gupta from Solidarity. Please go ahead. 12:31 12 minutes, 31 seconds Uh thank you for the opportunity. uh Prag I just wanted to check in your presentation you had mentioned that by 12:38 12 minutes, 38 seconds FY28 now we have capacity for a revenue potential of 1,500 crores um in your 12:46 12 minutes, 46 seconds opening statement did you uh mention a revenue guidance of 1500 cr by FY28 or 12:53 12 minutes, 53 seconds was that capacity guidance well that is a potential by FI28 with a 12:59 12 minutes, 59 seconds kind of a uh debottle making whatever we did and uh so that is what we expect by 13:06 13 minutes, 6 seconds FY28 we should achieve that revenue um isn't that a very aggressive guidance 13:15 13 minutes, 15 seconds I'm saying let's assume we end this year about whatever 800 850 uh you know for 13:21 13 minutes, 21 seconds the full year you know 850 going to 1500 crores you know despite a tough 13:28 13 minutes, 28 seconds environment you know it's like you're really sticking your your neck out over here right I mean I know it is a challenging but there are 13:36 13 minutes, 36 seconds two factor money span number one company will have a uh grow 13:43 13 minutes, 43 seconds with its existing capacity uh which we could not achieve the full 13:50 13 minutes, 50 seconds utilization in FI26 what we anticipated we expect that to happen in FY27 plus in 13:58 13 minutes, 58 seconds FI28 we will have a this long-term supply agreement revenue kicking in. 14:05 14 minutes, 5 seconds So looking at the combined growth of that we are that's what we are expecting a potential of 1500 cr. We are not 14:13 14 minutes, 13 seconds saying that we will achieve but there is a potential to achieve that with the existing uh investment in a capex 14:22 14 minutes, 22 seconds and uh this 1500 crores uh can one assume a blended margin of about 18% on 14:31 14 minutes, 31 seconds this as potential at least yeah we do see my guidance will be still going to be between 17 to 19% 14:40 14 minutes, 40 seconds uh we are able able to maintain on and about 17% as of today and we hope 14:48 14 minutes, 48 seconds with the improvised utilization of the plant we will be able to achieve a uh 14:55 14 minutes, 55 seconds one one and a half% additional margin okay and uh product by you know given 15:03 15 minutes, 3 seconds that the US tariff was fairly out of the blue and uh you know we've got a 15:11 15 minutes, 11 seconds president who might again change his mind. How are you d-risking the business from uh you know any random action by 15:20 15 minutes, 20 seconds somebody so that uh you know we don't uh have so much of impact on the business. 15:27 15 minutes, 27 seconds Can you talk a little bit about uh what actions the company's taking on that front? 15:33 15 minutes, 33 seconds Absolutely. That's a good valid very good and valid question to understand the strategy. So what we have done in 15:39 15 minutes, 39 seconds the number of majors we have done we are looking at a different geography where Yasha has never looked at it uh South 15:48 15 minutes, 48 seconds America the Africa region also in Asian market we were not so gung-ho where we 15:56 15 minutes, 56 seconds are which is very close to the another Asian giant so we were a little bit reluctant now we are moving into all 16:03 16 minutes, 3 seconds this market and somewhere there we do not have the same margin as much is what we bring into the uh North America 16:12 16 minutes, 12 seconds market. So we are diversifying our market in a different zone. Number two 16:19 16 minutes, 19 seconds that we are turning the our product mix as what we can sell in this new new 16:28 16 minutes, 28 seconds market new potential market that is what helping us and number three thanks to our strong IMD we are still 16:36 16 minutes, 36 seconds further streamlining the process and as the plant is getting up more efficient more efficient we are able to do the 16:44 16 minutes, 44 seconds cost saving on the number of funds. So with the three approach we we feel uh and we strongly believe that we will be 16:53 16 minutes, 53 seconds able to overcome this current crisis of FI26 and FI27 will be a robust for Yash. 17:03 17 minutes, 3 seconds Um uh can I can I ask a few more questions or are they my other colleagues might be on the line? Um maybe one more one more and then we can come back to land. 17:13 17 minutes, 13 seconds Okay. Sure. Yes. Uh sure sure. So um you know can you talk about the the incremental R&D investments that we are 17:21 17 minutes, 21 seconds doing uh prag by are these uh principally in um uh existing areas 17:27 17 minutes, 27 seconds rubber and and glue or are these in some other industrial chemicals and I think the broader question is how what's the 17:35 17 minutes, 35 seconds framework you're using to decide which product categories you're focusing on uh in R&D. 17:42 17 minutes, 42 seconds That's that's something difficult but I can give straight answer that we are looking for a molecule which can at 17:48 17 minutes, 48 seconds least generate 25 crores revenue a year at least or more number one. Number two 17:55 17 minutes, 55 seconds we are looking for a chemistry application beyond robot and lubricant 18:02 18 minutes, 2 seconds also. So that's how we see that our specialty segment the performance 18:08 18 minutes, 8 seconds chemical segment is growing. uh at a healthy speed. Uh also we have lot of 18:15 18 minutes, 15 seconds customers coming on to us for a special chemistry to develop for them. So R&D is working on a multiro 18:23 18 minutes, 23 seconds multi- projects on a something similar chemistry something different chemistry 18:30 18 minutes, 30 seconds something altogether different which he has just never ventured into okay I come back 18:39 18 minutes, 39 seconds thank you thank you thank you a reminder to all the participants you may press star and one 18:48 18 minutes, 48 seconds to ask a We have the next question from the line of Na Patel from Bastian Research. Please go ahead. 18:56 18 minutes, 56 seconds Hi, thank you for this opportunity. Uh I just wanted a quick question on impact of tariffs on our revenue. You know the 19:04 19 minutes, 4 seconds 50% reciprocal tariffs are still in Q2 and if those tariffs were not in the place and they were normalized like our 19:12 19 minutes, 12 seconds current uh situation, what would have been our sales in Q3? 19:19 19 minutes, 19 seconds Sorry, I didn't get your question. Can you Yeah, sorry. So, if the in the current quarter in Q3, if there were no tariffs, 19:27 19 minutes, 27 seconds no heavy tariff which we had this quarter, how much impact on that sales would would it have been? Well, there 19:35 19 minutes, 35 seconds would have been substantial state if the tariff would not be there. Also, the margin could have been better. But I say basically itself the tariff has helped 19:44 19 minutes, 44 seconds us to look beyond uh comfort market comfort when I say that the language point of view accessible 19:52 19 minutes, 52 seconds point of view that is helping us to diversify our portfolio. So we are happy and uh with now t almost on the way out 20:01 20 minutes, 1 second we expect reasonable growth back with our market 20:08 20 minutes, 8 seconds in yasho the USA market share was more than 30 35% to regain that 20:15 20 minutes, 15 seconds understood and just to follow up on that how much revenue from US did we have in Q3 20:24 20 minutes, 24 seconds in uh it's about roughly about uh I don't have from USA but I have from America because I don't so that is about 20 22%. 20:36 20 minutes, 36 seconds Understood. Thank you. That's all from my side and thank you. 20:44 20 minutes, 44 seconds Thank you. A reminder to all the participants you may press star and one to ask a question. 20:53 20 minutes, 53 seconds We have the next follow-up question from the line of Manish Gupta from solidarity. Please go ahead. 21:00 21 minutes Um, if you had 22% revenue from the US in uh Q3 uh can you share America? America not USA. 21:12 21 minutes, 12 seconds Yeah. So I mean whatever the number was from the US I'm not fussed with that percentage number. What I wanted to understand is that if you had x cr of 21:21 21 minutes, 21 seconds sales from the US in Q3 uh was this was the burden of the tariff shared between you and the or you absorbed it or the buyer absorbed it. 21:32 21 minutes, 32 seconds How did that work? 21:33 21 minutes, 33 seconds Okay. So the lot of a lot of product of yaso has a had an exemption on a t. So USA custom has not put a price across 21:42 21 minutes, 42 seconds the blanket across the board but they have a lot of exempted product and the business revenue what we have currently 21:49 21 minutes, 49 seconds on the product where it has been exempted but wherever there's a 50% par we have a 21:56 21 minutes, 56 seconds very small business okay um so uh 22:03 22 minutes, 3 seconds just so that I'm clear uh where there was tariff you had very small business in quarter or a product range was such 22:12 22 minutes, 12 seconds that it was already exempted from tariff and therefore the tariff did not have any impact. 22:17 22 minutes, 17 seconds Well, we uh the lot of product where there's a tariff of 50% we have a very limited business and the where the 22:26 22 minutes, 26 seconds product on which there was no tariff we had a business continuation. 22:30 22 minutes, 30 seconds Okay. Um and uh you know like this contract that you signed u uh with this particular uh MNC are you in discussions 22:39 22 minutes, 39 seconds with other MNC's for um such agreements? 22:45 22 minutes, 45 seconds We we are in discussion with multiple customers. This customer has been there 22:53 22 minutes, 53 seconds involved. uh there was we were supposed to we were supposed to get the uh money from them to build up the plant. 23:04 23 minutes, 4 seconds So that will be disclosed otherwise we don't have policy to disclose about our ongoing business and but let me assure 23:12 23 minutes, 12 seconds you we are working with all major players in the field rubber and everyone 23:19 23 minutes, 19 seconds okay um okay uh that's that's u this was useful 23:29 23 minutes, 29 seconds yeah hello Yeah, thank you sir. We have the next question 23:38 23 minutes, 38 seconds from the line of Pujen Sha from Molecule Ventures. Please go ahead. 23:43 23 minutes, 43 seconds Uh hi sir. Uh thanks for the opportunity. So first question just want to understand the dynamics right now. So 23:51 23 minutes, 51 seconds uh whenever so there was a tariff impact and uh the customer might be have waited 23:58 23 minutes, 58 seconds all along to clear all this uh first but in that scenario uh do you have seen any 24:05 24 minutes, 5 seconds certain uh company which have started aggressively building the capacity 24:11 24 minutes, 11 seconds assuming that cap uh tariff will remain and ultimately there is a high scenario or a probability of getting dumping Even 24:20 24 minutes, 20 seconds the countries have higher tariffs. So do you have seen any such type of conditions out there or it is not happening? 24:29 24 minutes, 29 seconds No, we have not seen that so far. 24:34 24 minutes, 34 seconds Okay. Okay. Got it sir. Got it. And sir just wanted to understand if you can spell out the right now the capacity 24:41 24 minutes, 41 seconds utilization of Pakajan because if we consider uh a growth of from 800 KE to 24:49 24 minutes, 49 seconds 1500 K uh assuming that the that mean that is 18500 C will be 24:57 24 minutes, 57 seconds happening in next two years time not in one year time. Yeah yeah yeah I understand that 100%. 25:02 25 minutes, 2 seconds uh but uh obviously utilization will also take time in certain thing. So do 25:09 25 minutes, 9 seconds we do so right now what we are seeing is that 40% utilization out there 40 to 45% 25:16 25 minutes, 16 seconds in pakaj yeah because of the uh silk Q2 pakaj dropped below 50%. 25:27 25 minutes, 27 seconds Okay. Okay. Okay. Got it. So, got it. 25:30 25 minutes, 30 seconds And after all this uh uh government has well obviously uh the tariff has been 25:37 25 minutes, 37 seconds now almost been done. So just wanted to understand are we seeing the opportunities 25:45 25 minutes, 45 seconds uh the similar opportunities uh uh considering uh the 150 crores of 25:52 25 minutes, 52 seconds OMC. Are we seeing any RFQS coming up with different companies altogether just to build uh the similar line of things 26:01 26 minutes, 1 second or altogether new product ultimately with us? 26:05 26 minutes, 5 seconds Absolutely. And that is that is what giving us a confidence that in next two years we could achieve this number. 26:13 26 minutes, 13 seconds Got it sir. Any any sir just wanted to last question would be any just plan any plans on to reduce our long-term or 26:21 26 minutes, 21 seconds short-term debt any you know concrete plans in next two years no but we will be bringing down the debt 26:29 26 minutes, 29 seconds to embittor ratio that I can assure you but I'm not I'm not in a favor of reducing the overall debt overall debt 26:37 26 minutes, 37 seconds will reduce in terms of long-term short-term may increases but it won't increase from here that's what we trying to 26:45 26 minutes, 45 seconds Got it sir. Thank you so much. I will join. Thank you. Thank you. 26:52 26 minutes, 52 seconds Thank you. We have the next question from the line of Harshel Bayani an individual investor. Please go ahead. 26:59 26 minutes, 59 seconds Hello. Can you hear me? Yes. 27:02 27 minutes, 2 seconds Yeah. Hi. Thank you Paraka for the opportunity. So my question is in this for the 9 months what would be our days of inventory 27:10 27 minutes, 10 seconds right now? It's about 200. Okay. No, I that working days of inventory 27:19 27 minutes, 19 seconds but 170 total means good working process. 27:25 27 minutes, 25 seconds Okay, got it. And sir, uh next question is uh um hello. Yeah. 27:37 27 minutes, 37 seconds Hello Harel, please proceed with your question. 27:43 27 minutes, 43 seconds Yeah, actually uh I forgot. I'll get in the queue, sir. 27:51 27 minutes, 51 seconds Thank you. We have the next question from the line of J from Star Investment. Please go ahead. 27:58 27 minutes, 58 seconds Hi sir. Uh so what is the optimal production capacity planned for the Pakajan plant? What peak revenue 28:06 28 minutes, 6 seconds contribution do you expect once that capacity is fully utilized and by what timeline do you anticipate reaching this optimal level of operations? 28:15 28 minutes, 15 seconds We are expecting optimal level utation 80 85% by FI28 and the revenue should be in the range 28:22 28 minutes, 22 seconds of about 750 to 850 crores depend on the market condition. 28:31 28 minutes, 31 seconds Okay. And my second question like with the India EU free trade agreement now signed and our European subsidiary 28:38 28 minutes, 38 seconds established, what level of demand visibility can we expect for the next fiscal year and which geographies should 28:46 28 minutes, 46 seconds we prioritize for sales expansion to maximize the growth opportunities? 28:51 28 minutes, 51 seconds See the number one Europe should be definitely benefited to us because under the uh treaty what we realize that the 29:01 29 minutes, 1 second chemical rate got down to 0% but we have to wait and watch when that happen. So and also for Europe we have our two 29:10 29 minutes, 10 seconds sales people based in Europe are reaching out to customers they've come on board in last 6 months on board. So 29:17 29 minutes, 17 seconds we are very very uh encouraged and the kind of a customer response we are 29:23 29 minutes, 23 seconds getting now from the uh market is very positive. So we are hopeful. Number two 29:30 29 minutes, 30 seconds we are also expanding into the South America that's America's part of America's and uh Africa market. 29:40 29 minutes, 40 seconds That's our diversification point of view. We have a good green road into the America's market like uh Central 29:48 29 minutes, 48 seconds America, South America while Africa it's just beginning. Let's see how far how far we can go. 29:58 29 minutes, 58 seconds Okay. Thank you sir. I'll join Q if I will have. Thank you. 30:04 30 minutes, 4 seconds Thank you. We have the next follow-up question from the line of Paragwal from Bastian Research. Please go ahead. Hi. 30:11 30 minutes, 11 seconds Hi. Thank you for the opportunity again. 30:13 30 minutes, 13 seconds I have just one more question around the you know competitive intensity in the loop editive market. So as per my research it suggests that uh know which 30:21 30 minutes, 21 seconds there's a Chinese competitor who is you know basically expanding massively uh in this phase. Are you seeing any kind of you know pricing disruption because of 30:29 30 minutes, 29 seconds that because their capacity is expected to go live in FI27 as well? 30:35 30 minutes, 35 seconds Well we know them. We know the what competitors are coming up uh and we know the pros and cons of that those 30:43 30 minutes, 43 seconds competitions arising from other Asian countries and uh we are well prepared for that. I can say that much cannot 30:51 30 minutes, 51 seconds diverse much more information. So we are not expecting any negative implication because of that on our product portfolio. 30:59 30 minutes, 59 seconds It will be tough competition. I can say that much. 31:02 31 minutes, 2 seconds Okay. Got it. Thank you so much. Thank you. 31:06 31 minutes, 6 seconds Thank you. A reminder to all the participants. You may press star and one to ask a question. We have the next 31:14 31 minutes, 14 seconds follow-up question from the line of Harshel Bayani, an individual investor. Please go ahead. 31:20 31 minutes, 20 seconds Yeah, thank you for the opportunity. Uh my second question is sir, what is the capeex for this 9 months and the capeex plan for next two years excluding the Europe MNC capex? 31:32 31 minutes, 32 seconds Well uh this year we had done a caps of about 60 crores 25 crores you know two 31:38 31 minutes, 38 seconds lines where we saw the demand coming and another 25 cr we spent in R&D so that's 31:45 31 minutes, 45 seconds about 55 60 crores uh balance we not we defer our capex even though we had a 31:53 31 minutes, 53 seconds plan looking at the current condition if you see if it if you see that the things are getting improvised we will 32:01 32 minutes, 1 second definitely Go ahead with the that balance uh balance cx what we have not done for FI26 and go ahead with FI27. 32:13 32 minutes, 13 seconds Okay thank you and sir what is our current borrowings excluding the promoter loan 32:21 32 minutes, 21 seconds 60 cr something 560. Yeah. 32:27 32 minutes, 27 seconds Is it excluding the promoter loan or including promoter loan? 32:31 32 minutes, 31 seconds Is it promot and and what is the outside loan? 32:37 32 minutes, 37 seconds Outside that bank loan. Okay. Bank loans are about 500 crores and balance 50 is come from the promoters. 32:45 32 minutes, 45 seconds Okay sir. Okay. Yeah. Thank you. Thank you. 32:50 32 minutes, 50 seconds Thank you. We have the next question from the line of Adita from Securities Investment Management. Please go ahead. 32:59 32 minutes, 59 seconds Uh yeah, hi sir. Thanks for the opportunity. Uh so this uh contract which we won uh from the MNC customer. 33:06 33 minutes, 6 seconds Uh so just wanted to get a sense is it common in this industry where the customer funds the capeex uh because generally I understand these kind of 33:14 33 minutes, 14 seconds deals generally happen in the case of a pharma segment where there are new molecules uh where the customer would 33:21 33 minutes, 21 seconds like to fund the kex. Uh so is this kex being done for a new kind of a additive or these are these are older products 33:29 33 minutes, 29 seconds only and the customer just wants uh stable supply. uh just some sense if you could provide what helped us win this 33:36 33 minutes, 36 seconds contract. I don't know much on that what is a customer mindset but I can say this is very unique molecule has a unique 33:44 33 minutes, 44 seconds process so that's and we had a capability to manage that kind of things so that's why customer has chosen Yaso 33:51 33 minutes, 51 seconds as a partner long-term partner so is this a new kind of an editor or these are older editors which are common 33:59 33 minutes, 59 seconds in the market thank you I can't give much more light on it Hello 34:12 34 minutes, 12 seconds does answer your question. 34:17 34 minutes, 17 seconds I cannot give more insight on this molecule. 34:21 34 minutes, 21 seconds Uh so my next question was uh if I look at domestic uh market uh for the last two quarters we have seen very strong growth. Uh if you could just help us 34:30 34 minutes, 30 seconds understand what is leading to this growth. 34:33 34 minutes, 33 seconds Well, as I said, we have identifying lot of new market that is growing. Also in 34:40 34 minutes, 40 seconds India, we are able to continue our growth. Uh particularly in Q3, we could increase our reach out to the customer 34:49 34 minutes, 49 seconds much more. uh which was a aggressive strategy of rising uh and uh demand in 34:58 34 minutes, 58 seconds India we seen it's been improving day by day not only in uh India share but also 35:05 35 minutes, 5 seconds somewhat into the consumer segment too that is helping us to continue the growth in volume 35:14 35 minutes, 14 seconds understood and just wanted to get a sense so is it majorly led by lubricants or a rubber additive just some sense if you could provide both. 35:28 35 minutes, 28 seconds Yeah, yeah, thank you. 35:31 35 minutes, 31 seconds Yeah, thank you. We have the next question from the line of Priti Agrian from SK Associates. Please go ahead. 35:43 35 minutes, 43 seconds Uh yes, thank you so much for the opportunity. I wanted to know that given our increasing strategic emphasis on the 35:50 35 minutes, 50 seconds industrial segment uh could you provide clarity on what percentage of total sales you expect in this segment to 35:57 35 minutes, 57 seconds contribute over the next two to three years? 36:02 36 minutes, 2 seconds Yeah, right now we are about uh 8 85 to 90% industrial will eventually go to 90 36:10 36 minutes, 10 seconds to 95% in next years time. That's what we expect because uh consumer will remain a flat or we'll have a regrowth further degross. 36:23 36 minutes, 23 seconds Understood sir. Thank you so much. Thank you. 36:28 36 minutes, 28 seconds Thank you. We have the next follow-up question from the line of Manish Gupta from Solidarity. Please go ahead. 36:36 36 minutes, 36 seconds Uh brought by uh another clarification. 36:38 36 minutes, 38 seconds If I exclude the consumer uh segment, so my question is just on the industrials. 36:46 36 minutes, 46 seconds Um would the gross margin change? Uh can that be explained completely by product 36:53 36 minutes, 53 seconds mix change or did you also have to do some discounting to push volume uh from the new plant? 37:06 37 minutes, 6 seconds Well, it's more from a product mix and uh I will say 80% from product mix and 20% from discount 37:14 37 minutes, 14 seconds if there's a bulk buyer. If there's a bulk buyer and uh so when you say is bulk buying uh 37:21 37 minutes, 21 seconds then it's really a a volume link discount. Yes. 37:26 37 minutes, 26 seconds Okay. Great. Uh second question is Prag by you know uh you've offered a guidance of roughly 1,500 crores by FY28. 37:35 37 minutes, 35 seconds Uh would you be able to split that you know I I guess you're close to the end of the year how much you'll finish this year by approximately even broad range 37:43 37 minutes, 43 seconds is okay we will we will do somewhere vis should close somewhere about 800. Yeah. 37:51 37 minutes, 51 seconds Um and next year would be how much stuff you know? 37:56 37 minutes, 56 seconds We are in process of doing budgeting money and uh I think we I will have a more clarity from my global team as well 38:05 38 minutes, 5 seconds as my local team in the next couple of weeks. 38:09 38 minutes, 9 seconds So the the FY28,500 cr is really a an aspiration right it's really not a guidance right it's really 38:18 38 minutes, 18 seconds what you would like to do or you have full capacity to do it's not a number that I can say money that's the potential to 38:25 38 minutes, 25 seconds achieve 80% utilization of the yo capacity okay thank you 38:33 38 minutes, 33 seconds thank you thank Thank you. We have the next question from the line of Mjid Burya from Samya Advisers. Please go ahead. 38:46 38 minutes, 46 seconds Uh Karak, thank you for taking my question. Uh just one there. Uh you know 2 years out of whenever our Pakan 38:53 38 minutes, 53 seconds reaches optimal utilization. What is your expectation between the mix of you know spot market versus sales for 39:00 39 minutes long-term contracts to some large customers globally like your expectation whenever we are at full utilization? 39:08 39 minutes, 8 seconds Well uh we will be our aspiring to have a long-term contract to fill this kind of capacity and uh we are working on 39:16 39 minutes, 16 seconds that. So that's give the confidence I meant like uh would majority of our sales at that point be long-term 39:24 39 minutes, 24 seconds contracts uh when we reach full utilization or there will be a meaningful part from spot market. 39:29 39 minutes, 29 seconds It will be a 60 to 70% long-term contract 30% will be spot. 39:35 39 minutes, 35 seconds Okay. Thank you sir. That was my question. Thank you. 39:41 39 minutes, 41 seconds Thank you. A reminder to all the participants, you may press star and one to ask a question. 39:58 39 minutes, 58 seconds A reminder to all the participants, you may press star and one to ask a question. 40:07 40 minutes, 7 seconds Thank you very much. As there are no further questions from the participants, that concludes the question and answer session. I now hand the conference back to the management for closing comments. 40:17 40 minutes, 17 seconds Thank you and over to you sir. 40:19 40 minutes, 19 seconds Thank you everyone joining for this conference call. Have a good day. Bye. 40:26 40 minutes, 26 seconds Thank you members of the management on behalf of Yash Industries Limited. That concludes this conference. Thank you all for joining us and you may not 40:34 40 minutes, 34 seconds disconnect