Q1 2027 Vishnu Chemicals Ltd Earnings Call

August 3, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the Vishnu Chemicals Q1 FY27 earnings conference call, hosted by MK Global Financial Services Limited. As a reminder, all participant lines will be in listen-only mode.

Operator: Ladies and gentlemen, good day and welcome to Vishnu Chemicals Q1 FY26 Earnings Conference call hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference call, please signal for an operator by pressing star and then zero on your touch-tone telephone. I now hand the conference over to Mr. Arya Patel, Emkay Global Financial Services Limited. Thank you, and over to you, sir.

Speaker #1: There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference call, please signal for an operator by pressing star, then zero, on your touch-tone telephone.

Speaker #1: I now hand the conference over to Mr. Arya Patel, MK Global Financial Services Limited. Thank you, and over to you, sir.

Speaker #2: Yeah, thank you, Farah. Good morning, everyone, and welcome to the earnings call of Vishnu Chemicals Limited for Q1 FY27. I would like to welcome the management and thank them for giving us this opportunity to host them.

Arya Patel: Yeah. Thank you, Farah. Good morning, everyone, and welcome to the earnings call of Vishnu Chemicals Limited for Q1 FY26. I would like to welcome the management and thank them for giving us this opportunity to host them. We have with us today Mr. Siddartha Cherukuri, Joint Managing Director, and Mr. Hanumant Bhansali, Vice President, Finance and Strategy. Before we begin this call, I would like to point out that the discussion during this call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on the company's operating and financial performance. These statements involve uncertainties and risks which could cause actual results to differ. The company is under no obligation to provide subsequent updates to this forward-looking statement. I shall now hand over the call to the management for their opening remarks. Thank you, and over to you, Mr. Siddharth.

Speaker #2: We have with us today Mr. Siddharth Cherukuri, Joint Managing Director, and Mr. Hanumant Bansadi, Vice President, Finance and Strategy. Before we begin this call, I would like to point out that the discussion during this call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on the company's operating and financial performance.

Speaker #2: These statements involve uncertainties and risk, which could cause actual results to differ. The company is under no obligation to provide subsequent updates to this forward-looking statement.

Speaker #2: I shall now hand over the call to the management for their opening remarks. Thank you, and over to you, Mr. Siddharth.

Speaker #3: Thank you, Shabri. Good morning, thank you, Aryan. Good morning, everyone, and welcome to all of you to the first quarter earnings for FY27. We are pleased to report a good set of results for the first quarter.

Siddartha Cherukuri: Thank you, Arya. Good morning, everyone, and welcome you all to the Q1 FY26 earnings. We are pleased to report a good set of results for the first quarter, continuing the momentum we built during the previous financial year. Despite an uncertain global environment, we believe we have delivered over 20% year-on-year growth in both operating revenue and PAT, reflecting the underlying strength and resilience of our business. Geopolitical and logistics environment, however, remain challenging at this current juncture. While we have not experienced any significant supply disruptions, ocean freight costs have increased sharply amid the ongoing geopolitical tensions in West Asia. We believe such levels are unsustainable, and we expect freight rates to gradually normalize over the medium term. Against this backdrop, our diversified geographic presence continues to serve us well. During the quarter, our revenue mix stood approximately 45% domestic and 55% export.

Speaker #3: Continuing the momentum we built during the previous financial year, despite an uncertain global environment, we believe we have delivered over 20% year-on-year growth in both operating revenue and PAT, reflecting the underlying strength and resilience of our business.

Speaker #3: The geopolitical and logistics environment, however, remains challenging at this current juncture. While we have not experienced any significant supply disruptions, ocean freight costs have increased sharply amid the ongoing geopolitical tensions in West Asia.

Speaker #3: We believe such levels are unsustainable, and we expect them to gradually normalize over the medium term. Against this backdrop, our diversified geographic presence continues to serve us well.

Speaker #3: During the quarter, our revenue mix stood at approximately 45% domestic and 55% export. Coming to our individual chemistries in chromium, we continue to strategically shift our product mix towards higher value-added product derivatives compared to base specialty chemicals.

Siddartha Cherukuri: Coming to our individual chemistries, in chromium, we continue to strategically shift our product mix towards higher value-added product derivatives compared to base specialty chemicals. This transition contributed to margin improvement during the quarter and allows us to participate in a relatively less competitive product category. Our barium business continues to perform consistently with operations running at optimum capacity utilization. We are further investing in our backward integration, which will improve raw material security and enhance product quality for our customers. We are also encouraged by the progress in strontium business and expect the business to deliver value in the remaining quarters of the year. In South Africa, we are progressing with multiple activities required to restart operations, including refurbishment, engineering and stability assessments, recruitment, contractor mobilization, and we expect operations to commence during the H2 of this financial year.

Speaker #3: This transition contributed to margin improvement during the quarter and allows us to participate in relatively less competitive product categories. Our barium business continues to perform consistently, with operations running at optimum capacity utilization.

Speaker #3: We are further investing in our backward integration, which will improve raw material security and enhance product quality for our customers. We are also encouraged by the progress in the strontium business and expect the business to deliver value in the remaining quarters of the year.

Speaker #3: In South Africa, we are progressing with multiple activities required to restart operations, including refurbishment, engineering and stability assessments, recruitment, contractor mobilization, and we expect operations to commence during the second half of this financial year.

Speaker #3: Another important initiative in our continued investment in renewable energy and cost efficiency: we are planning to add approximately 20 megawatts of solar power capacity, which will increase our solar power generation capacity.

Siddartha Cherukuri: Another important initiative in our continued investment in renewable energy and cost efficiency. We are planning to add approximately 20 megawatts of solar power capacity, which will increase our solar power generation capacity nearly six times from the current level, whereby the average power cost will come down significantly over the years. Looking ahead, we have multiple growth levers across the business. Upcoming capacity additions in new specialty chemicals, further backward integration in barium, scaling up of strontium and South African operations are expected to support our growth over medium term despite the near to medium-term headwinds for global and domestic market due to West Asia crisis. Our focus remains on being the lowest cost producer in the chemistries we operate and disciplined execution that would lead to deploying capital in value-assertive opportunities for long-term value.

Speaker #3: Nearly six times from the current level; thereby, the average power cost will come down significantly over the years. Another important point—looking ahead, we have multiple growth levers across the business.

Speaker #3: Upcoming capacity additions in new specialty chemicals, further backward integration in barium, scaling up of strontium, and South African operations are expected to support our growth over the medium term, despite the near- to medium-term headwinds for global and domestic markets due to the West Asia crisis.

Speaker #3: Our focus remains on being the lowest-cost producer in the chemistries we operate, and disciplined execution that would lead to deploying capital in value-accretive opportunities for long-term value.

Speaker #3: With that, I would now hand over to Hanuman to take you through our financial performance.

Siddartha Cherukuri: With that, I would now hand over to Hanumant to take you through our financial performance.

Speaker #1: Thank you, Mr. Siddharth, and good morning, everyone. Let me now take you through the consolidated financial highlights for Q1 FY27 results of Vishnu Chemicals Limited.

Hanumant Bhansali: Thank you, Mr. Siddartha, and good morning, everyone. Let me now take you through the consolidated financial highlights for the Q1 FY27 results of Vishnu Chemicals Limited. On a consolidated basis, the company reported operating revenues of INR 433.4 crore in Q1 FY27 compared to INR 346.9 crore in Q1 FY26, a growth of 24.9% Y-o-Y. The gross profit for the quarter stood at INR 193.9 crore compared to INR 158.2 crore in Q1 FY26, a growth of 22.6% Y-o-Y. EBITDA stood at INR 65.5 crore in Q1 FY27 compared to INR 55.7 crore in Q1 FY26, a growth of 17.5% Y-o-Y. EBITDA margins stood at 15.1% in Q1 FY27 compared to 16.1% in corresponding quarter last year. The profit after tax for the quarter stood at INR 39.6 crore compared to INR 32.2 crore in Q1 FY26, a growth of 23% Y-o-Y.

Speaker #1: On a consolidated basis, the company reported operating revenues of ₹433.4 crore in Q1 FY27, compared to ₹346.9 crore in Q1 FY26, a growth of 24.9% by and large.

Speaker #1: The gross profit for the quarter stood at ₹193.9 crores, compared to ₹158.2 crores in Q1 FY26, a growth of 22.6% by and large. EBITDA stood at ₹65.5 crores in Q1 FY27, compared to ₹55.7 crores in Q1 FY26, a growth of 17.5% by and large.

Speaker #1: EBITDA margin stood at 15.1% in Q1 FY27, compared to 16.1% in the corresponding quarter last year. The profit after tax for the quarter stood at ₹39.6 crore, compared to ₹32.2 crore in Q1 FY26.

Speaker #1: A growth of 23% by and large. PAT margin stood at 9.1%, compared to 9.3% in Q1 FY26. On a sequential basis, the performance moderated a bit due to a maintenance shutdown taken in our Wyzard facility during the quarter.

Hanumant Bhansali: PAT margin stood at 9.1% compared to 9.3% in Q1 FY26. On a sequential basis, the performance moderated a bit due to maintenance shutdown taken in our Vizag facility during the quarter. Overall, we are happy to start FY27 on a positive note with healthy year-on-year growth metrics across key financial numbers. With this, I conclude my remarks. Now we can open the floor for Q&A session. Thank you.

Speaker #1: Overall, we are happy to start FY27 on a positive note, with healthy year-on-year growth metrics across three financial numbers. With this, I conclude my remarks, and now we can open the floor for the Q&A session.

Speaker #1: Thank you.

Speaker #4: Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one, on the touchtone telephone.

Operator: Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on the touchtone telephone. If you wish to remove yourself from the question queue, you may enter star followed by two. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Sagar Jethwani from PhillipCapital. Please go ahead.

Speaker #4: If you wish to remove yourself from the question queue, you may enter star followed by two (*2). Participants are requested to please use only handsets while asking a question.

Speaker #4: We will wait for a moment while the question queue assembles. The first question is from the line of Sagar Jetvani from Philips Capital. Please go ahead.

Speaker #1: Yeah, thanks for the opportunity. My first question is: What is the reason for the sharp correction in the barium segment margins? The margins have just dented sequentially, and why is that?

Sagar Jethwani: Thanks for the opportunity. My first question is, what is the reason for the sharp correction in the barium segment margins? The margins have just dented sequentially and Y-o-Y. What are the sustainable margins in the barium segment? Could you please help us with that?

Speaker #1: And what are the sustainable margins in the barium segment? Could you please help us with that?

Speaker #3: Thank you, Mr. Jetvani. To answer your question, our barium business is progressing as per the business plan, and with that being said, the EBITDA margins are not impacted.

Siddartha Cherukuri: Thank you, Mr. Jethwani. Answering your question, well, our Barium business is progressing as per the business plan. With that being said, the EBITDA margins are not impacted in the quarter gone by. There was a one-off expense, which was factored in, where the barite prices were retrospectively charged for the last two years. It was an adjustment whereby there was a one-time impact for the last quarter, close to INR 8 crore. This will not be a growing concern moving forward.

Speaker #3: In the quarter gone by, there was a one-off expense which was factored in, where the barite prices were retrospectively charged for the last two years.

Speaker #3: It was an adjustment. Therefore, there was a one-time impact for the last quarter, close to ₹8 crore. This will not be a going concern moving forward.

Speaker #1: Yeah, good to hear that. And what's the sustainable margin of this segment?

Sagar Jethwani: Yeah, good to hear that. What are sustainable margins of this segment?

Speaker #3: We remain to be very positive. I mean, the barium carbonate, it's 70% of the production is exported. And also, one of the byproducts which is coming, sulfur, even the product value has gone up over 300, 400% in the last few months.

Siddartha Cherukuri: We remain to be very positive. The Barium Carbonate, 70% of the production is exported. Also, one of the by-product which is coming, Sulphur, the product value has gone up over 300%, 400% in the last few months. The blended realizations have improved and will continue to improve because for both the product, Barium Carbonate, Sulphur, Barium Sulphate, and Sodium Sulphate, the demand environment remains robust. We believe the EBITDA margins will continue to remain at 25% moving forward.

Speaker #3: So, the blended realizations have improved, and will continue to improve, because for both the products—barium carbonate, barium sulphate, and sodium sulphide—the demand environment remains robust.

Speaker #3: I think we believe the EBITDA margins will continue to remain at 25% moving forward.

Speaker #1: Yeah, good to hear that. And secondly, a couple of quarters back, the European Union did announce a higher ADD on the Chinese vendors for barium carbonate.

Sagar Jethwani: Yeah, good to hear that. Secondly, a couple of quarters back, European Union did announce a higher ADD on the Chinese vendors on the Barium Carbonate. Has the benefits of that started to flow in? Any quantification of these benefits can you share?

Speaker #1: Have the benefits of that started to flow? Is there any quantification of these benefits? Can you share?

Siddartha Cherukuri: It's already visible in the EBITDA margins. It's hard to quantify them segment by segment, region by region. We always look at the blended realization and overall product mix, ideally to achieve a 25% EBITDA margin. Again, it's always based on the marketing plan and the volume allocation in the various regions. We go by that. We are not focused on one particular continent. We look at it a lot more broadly, domestic US market, Latin America, Far East, and generally how the demand environment is there for these particular products, because most of them are linked to infrastructure growth and real estate.

Speaker #3: It's already visible in the EBITDA margins. It's hard to quantify them segment by segment, region by region, but we always look at the blended realization and overall product mix. Ideally, we aim to achieve a 25% EBITDA margin.

Speaker #3: So again, it's always based on the marketing plan and the volume allocation in the various regions. So we go by that. We are not focused on one particular continent.

Speaker #3: We look a lot more broadly at the domestic US market, Latin America, and the Far East, and generally how the demand environment is there. For these particular products, because most of them are linked to infrastructure growth and real estate development in those regions.

Speaker #1: Yeah, what I was trying to understand is basically the number of inquiries that you may be looking at or maybe hearing about, and any benefits that are visible.

Sagar Jethwani: Yeah, what I was trying to understand is basically the number of inquiries that you may be looking at or may be hearing at, and any benefits that are visible. I'm not asking for any dissection here, the bifurcation, but qualitatively.

Speaker #1: I'm not asking for any dissection here—the bifurcation—but at least qualitatively.

Siddartha Cherukuri: Those are.

Speaker #3: Yeah, captured in the numbers, let me put it that way. So we have had an added 4–5% margin on top of the regular pricing, what we see in other markets.

Sagar Jethwani: Yeah

Siddartha Cherukuri: captured in the numbers. Let me put it that way.

Sagar Jethwani: Yeah.

Siddartha Cherukuri: It had added 4%, 5% margin on top of the regular pricing, what we see in other market. That we believe will continue. However, there is a headwind in terms of higher logistics cost for the current quarter, which we are trying to see how much we can pass on and how much we should absorb. That remains to be a little bit of a challenge, that it's more short to medium-term rather than a medium to long-term, I would say.

Speaker #3: And that, we believe, will continue. However, there is a headwind in terms of higher logistics costs for the current quarter, which we are trying to see how much we can pass on and how much we should absorb.

Speaker #3: So that remains to be a little bit of a challenge, and it's more short to medium-term rather than medium to long-term, I would say.

Speaker #1: And third is, what was the revenue from strontium carbonate during the quarter? Could you please help us with that number?

Sagar Jethwani: Third is that, what was the revenue from the Strontium Carbonate during the quarter? Could you please help us with that number?

Speaker #3: Revenue from strontium for the quarter gone by was ₹25 crore.

Siddartha Cherukuri: INR 25 crores was the revenue from Strontium for the quarter gone by.

Speaker #1: Yeah, and.

Sagar Jethwani: Yeah.

Siddartha Cherukuri: 24, 25. Yeah.

Speaker #3: Yeah.

Speaker #1: Okay. And what was the freight cost as a percentage of revenues?

Sagar Jethwani: Okay. What's the freight cost as a percentage of revenues?

Speaker #3: I mean, as a business as a whole, or for...

Siddartha Cherukuri: As a business as a whole or for

Speaker #1: Consolidated. Yeah.

Sagar Jethwani: Consolidated, yeah.

Speaker #3: For the quarter gone by, logistics costs were about 9 to 10 percent, but this is expected to change quite a bit for the current quarter.

Siddartha Cherukuri: For the quarter gone by, it's about 9% to 10% is the logistics cost, but it is going to change quite a bit for this quarter. It could be upwards of 20%, depending on that.

Speaker #3: It could be upwards of 20%, depending on the—

Speaker #1: Yeah. And last question: Our tax rate has been slightly elevated for the last couple of quarters. Do we see some normalization here going forward?

Sagar Jethwani: Last question is our tax rate is slightly elevated since last couple of quarters. Do we see some normalizations here going forward?

Speaker #3: Good morning, Mr. Sagar. Hanumanth with you on this. Yeah, so the tax rate in this quarter was 28%, precisely about 28.05%. On average, throughout the year last year, FY27, the tax rate was 27.17%, which is in line with our tax regime that we follow.

Hanumant Bhansali: Good morning, Mr. Sagar. Hanumant with you on this.

Sagar Jethwani: Yeah.

Hanumant Bhansali: Yeah. The tax rate in this quarter was 28%, precisely about 28.05%. On an average throughout the year, last year, FY26, the tax rate was 27.17%, which is in line with our tax regime that we follow.

Speaker #1: Understood. Yeah, thank you. I'll fall back in the queue for any further questions. Thanks, and all the best.

Sagar Jethwani: I understand. Yeah. Thank you. I'll fall back in the queue for any further questions. Thanks and all the best.

Speaker #3: Sure. Thank you.

Hanumant Bhansali: Sure.

Sagar Jethwani: Thank you.

Speaker #4: Thank you. The next question is from the line of Rohit Sinha from Sunidhi Securities. Please go ahead.

Operator: Thank you. The next question is from the line of Rohit Sinha from Sunidhi Securities. Please go ahead.

Speaker #3: Yeah, thank you for taking my question, sir. On the standalone side, it's good to see that our EBITDA margins are gradually improving. But in this quarter, we had some shutdowns also.

Rohit Sinha: Yeah. Thank you for taking my question, sir. Sir, on the standalone side, good to see that our EBITDA margins are gradually improving. In this quarter, we have some shutdowns also. Just wanted to know if you can help us with either volume or value, what kind of figure was impacted because of this shutdown? If that would have been there, would it be a better, furthermore improved margin on the business?

Speaker #3: So, just wanted to know if you can help us with either volume or value. What kind of figure was impacted because of this shutdown?

Speaker #3: And if that had been there, would it have resulted in a better or further improved margin for the business?

Speaker #1: Good morning, Mr. Rohit. Thank you for your question. Yes, your observation is correct. Overall, the Chromium business performed better in this quarter compared to the quarters gone by.

Hanumant Bhansali: Good morning, Mr. Rohit. Thank you for your question. Yes, your observation is right. Overall, the chromium business performed better in this quarter compared to the quarters gone by. The margin improvement in our standalone chromium chemicals business was because of two fronts. One was the blended realization for the business improved over the quarter. That was due to the strategic shift that we have decided to take to sell more of higher value-added derivatives, such as Chromic Acid or Chrome Oxide Green over our base specialty chemicals such as Basic Chromium Sulphate or Sodium Dichromate. This has changed the entire product mix for chromium as a standalone business. The higher value-added derivatives contributed to nearly 50% of our sales in the quarter gone by, as compared to, say, 40% in FY26 as a year.

Speaker #1: The margin improvement in our standalone Chromium chemical business was due to two factors. One was that the blended realization for the business improved over the quarter.

Speaker #1: And that was due to the strategic shift that we have decided to take, to sell more of higher value-added derivatives such as chromic acid or chrome oxide green over our base specialty chemicals such as basic chrome sulfate or sodium dichromate.

Speaker #1: So, this has changed the entire product mix for Chromium as a standalone business. The higher value-added derivatives contributed to nearly 50% of our sales in the quarter gone by.

Speaker #1: As compared to, say, 40% in FY26 as a year. So you can observe that we have improved our overall sales in chromic acid, chromoxide green, and other variants of chromium derivatives.

Hanumant Bhansali: You can observe that we have improved our overall sales in Chromic Acid, Chrome Oxide Green, and other variants of chromium derivatives. In fact, I would like to add on this that though we took a maintenance shutdown during the quarter, we still had inventory that we could sell throughout the quarter, and that did not impact our overall revenues as a whole in standalone business.

Speaker #1: In fact, I would like to add to this that, though we took a maintenance shutdown during the quarter, we still had inventory that we could sell throughout the quarter, and that did not impact our overall revenues as a whole.

Speaker #1: In standalone business.

Speaker #3: Got it. Got it. So, in the coming quarter, we'll have a better top line, and these margins should sustain, even before any benefit comes in from that South Africa mine.

Rohit Sinha: Got it. Coming quarter, we'll have a further better top line and these margins should sustain before any benefit comes in from that South Africa mine. Am I right?

Speaker #3: Am I right?

Speaker #1: I would request Mr. Siddharth to answer this question for you.

Hanumant Bhansali: I would request Mr. Siddartha to answer this question for you.

Speaker #3: Yeah, well, we remain positive for H2 FY28. Basically, I mean, we are expecting the chromite ore benefit to fall in from the second half of this year.

Siddartha Cherukuri: Well, we remain positive for H2 FY27. Basically, we are expecting the chromite ore benefit to fall in from H2 of this year.

Speaker #3: For the current quarter, there are certain headwinds related to higher sea freights, which we are finding a bit challenging to pass on completely.

Rohit Sinha: Right

Siddartha Cherukuri: There are certain headwinds related to higher sea freights, which we are finding it a bit challenging to pass on completely. We are working very closely with the customers and seeing what we can do on that front, and also looking at product mixes where there is a marginal impact of sea freight where we are looking for higher value-added products for this quarter.

Speaker #3: But we are working very closely with the customers and seeing what we can do on that front. And also, looking at product mix, product mixes where sea freight will there is a marginal impact of sea freight where we are looking for higher value-added products for this quarter.

Speaker #1: One more question.

Speaker #3: Okay, okay. And just on this power cost side, as you indicated, there will be some savings on that. So, I just wanted to understand, on an annualized basis, what sort of savings we could be making on this?

Rohit Sinha: Okay. Just on this power cost side, as you indicated that we will be saving some bit on that. Just wanted to understand, on an annualized basis, what sort of saving we could be making on this?

Speaker #3: Currently, we are operating a 5-megawatt solar power plant, out of which the realizable power will be close to 55 to 60 percent. And from a 20-megawatt plant, similarly, we'll be able to get 11 to 12 megawatts.

Siddartha Cherukuri: Currently, we are operating a 5 megawatt solar power plant, out of which the realizable power will be close to 55%-60%. From a 20 megawatt, similarly, we will be able to raise 11 to 12 megawatts.

Rohit Sinha: Yeah.

Speaker #3: I think saving will be close to 15, 20 percent because 100% we are not in a position to use solar power because of the AP Telangana rules with a certain amount of power should be availed from the discount.

Siddartha Cherukuri: I think saving will be close to 15%-20%, because 100% we are not in a position to use solar power because of the AP Telangana rules, because certain amount of power should be availed from the DISCOM. Still there will be a significant savings. Would not be able to quantify at this juncture because we need to see the output and it will be gradual.

Speaker #3: But still, there will be significant savings. We would not be able to quantify that at this juncture, because we need to see the output, and it will be gradual.

Speaker #1: Got it, got it. And sir, on the variance side, I mean, we have seen a strong top line. So is it volume increase significantly, or is it pricing realization where we have gained there?

Rohit Sinha: Got it. Sir, on the barium side, we have seen strong top line. It's a volume increase significantly or the pricing realization where we have gained there?

Speaker #3: Both, actually. I mean, everything is going as per the budget, in terms of production as well as sales planning. Things will remain positive, and we expect it to grow 15–20% this year in the barium decision aspect.

Siddartha Cherukuri: Both, actually. Everything is going as per the budget in terms of production as well as the sales planning. Things will remain positive, and we expect it to grow 15%-20% this year in the barium division aspect. At the R&D level also, we are looking at what other value-added products we can derive from this in the near future.

Speaker #3: Also, at the R&D level, we are looking at what other value-added products we can derive from there, in the near future.

Speaker #1: Okay, that's it from my side, sir. Thank you, and best of luck.

Rohit Sinha: Okay. That's it from my side, sir. Thank you and best of luck.

Speaker #3: Thank you so much. Thank you.

Siddartha Cherukuri: Thank you so much.

Operator: Thank you. The next question is from the line of Nirali Gopani from Unique Asset Management. Please go ahead.

Speaker #4: The next question is from the line of Nirali Gopani from Unique PMS. Please go ahead.

Speaker #2: Yeah, hi. Thank you for the opportunity. So, Siddharth, you clearly explained the reason for the margin impact in the barium part—this ₹8 crore exceptional item.

Nirali Gopani: Yeah, hi. Thank you for the opportunity. Siddartha, you clearly explained the reason for the margins impact in the barium part, this INR 8 crore exceptional item. When I look at barium and strontium combined, will it combined be able to deliver a 25% EBITDA margin, say, from the next quarter onwards? Because you mentioned that barium is at 25%.

Speaker #2: But when I look at barium and strontium combined, it could be able to deliver a 25% EBITDA margin, say, from the next quarter onwards, because you mentioned that barium is at 25%.

Speaker #3: That's right.

Siddartha Cherukuri: That's right.

Speaker #2: Okay.

Nirali Gopani: Okay.

Speaker #3: Not on a combination. So, as I mentioned, we are talking about barium as a standalone and strontium separately. Again, currently, we've achieved the volumes, but not the targeted EBITDA.

Siddartha Cherukuri: Not on a combination. We are talking about barium and standalone strontium. Again, currently, we've achieved the volumes, but not the targeted EBITDA. We remain EBITDA positive at the moment. Let me put it that way. In strontium. We need to ramp up volume, improve the yields and so on. We remain positive in strontium, probably by end of this year, we'll be at those EBITDA levels given the traction from the customers.

Speaker #3: So we remain EBITDA positive at the moment—let me put it that way—in strontium. So we need to ramp up volume, improve the yields, and so on.

Speaker #3: I mean, we remain positive—even strontium, probably by the end of this year, will be at those EBITDA levels, given the traction from the customers.

Speaker #2: Okay. So to be clear, for the remaining part of this financial year, when we do console minus standalone, the margins will still not reflect the complete impact because of some negative impact from strontium.

Nirali Gopani: Okay. To be clear, for the remaining part of this financial year, when we do console minus standalone, the margins will still not reflect the complete impact because of some negative impact from strontium.

Speaker #3: It will let me put it this way. It will still remain over 20%. For the console I mean, consolidate I mean, removing standalone combining barium and strontium.

Siddartha Cherukuri: Let me put it this way. It will still remain over 20% for removing standalone, combining barium and strontium. It will still remain 20% there. Yeah.

Speaker #3: It will still remain 20% there. Yeah.

Speaker #2: Perfect. Very clear. And are we still confident about DMSO and chrome metal starting to contribute from next financial year?

Nirali Gopani: Perfect. Very clear. Are we still confident about DMSO and chrome metal starting to contribute from next financial year?

Speaker #3: We do. I think it's as per the plan. I mean, the construction as well as implementation of the equipment is progressing. So we remain positive that we'll be able to start commercial production by the next financial year.

Siddartha Cherukuri: We do. I think it's as per the plan. The construction as well as implementation of the equipment is progressing. We remain positive that we will be able to start commercial production by next financial year.

Speaker #2: Perfect. And just one last clarification. So, with chromium, the EBITDA margin is improving on that side of the business, as well as with barium and strontium. So, next financial year, on a consolidated level, can we look at a 20% EBITDA margin?

Nirali Gopani: Just one last clarification. With chromium, the EBITDA margin improving on that side of the business and barium and strontium. Next financial year on a consolidated level, can we look at a 20% EBITDA margin? Because you're very confident on growth part of the business, just on this margin part.

Speaker #2: Because you're very confident on the growth part of the business, just on this margin part.

Speaker #3: Let me throw some light on the business rather than coming to the numbers part right away. What we are going to see is more visibility in terms of business.

Siddartha Cherukuri: Let me throw some light on the business, and I'll come to the number part later. What we are going to see is more visibility in terms of business. In the coming months, we're going to enter into a long-term supply agreement for one of our key derivative Chrome Oxide Green to a European client. This will bring a lot of visibility to our volumes as well as margins moving forward. This will give us lot more leverage in terms of product mix, what we want to take it up in the quarters to come. At the same time, I'm talking more on the upstream side. On the downstream, from the H2 of the year, we are expecting the chrome ore to come in and it will definitely improve the margin.

Speaker #3: In the coming months, we're going to enter into a long-term supply agreement for one of our key derivatives, chrome oxide green, to a European client.

Speaker #3: This will bring a lot of visibility to our volumes as well as margins moving forward. This will also give us a lot more leverage in terms of product mix and what we want to take up in the quarters to come.

Speaker #3: Also, at the same time, this is more I'm talking more on the upstream side. And on the downstream also, the second half from the second half of the year, we are expecting the chrome ore to come in and some it will definitely improve the margin.

Speaker #3: So, margins will improve not just on account of downstream benefits coming through chrome ore, but also through upstream product mix improvement. So, with that being said, we will very soon be achieving the 20% margin.

Siddartha Cherukuri: Margins will improve not just on account of downstream benefits coming through the chrome ore, also through upstream product mix improvement. With that being said, very soon we'll be achieving the 20% margin. Will that be next financial year? Yeah, I remain positive to that.

Speaker #3: Will that be next financial year? Yeah, I remain positive about that.

Speaker #2: Perfect. No, that's it. Thank you for answering my questions.

Nirali Gopani: Perfect. No, that's it. Thank you for answering my questions.

Speaker #3: Yeah.

Speaker #4: Thank you. The next question is from the line of Shivam Gupta from Srinetra Asset Managers. Please go ahead.

Operator: Thank you. The next question is from the line of Shivam Gupta from Trinetra Asset Managers. Please go ahead.

Speaker #1: All right. Thank you for the opportunity. I want to know where the strontium order is mainly coming from.

Shivam Gupta: Hi. Thank you for the opportunity. I want to know, strontium order mainly coming from.

Speaker #3: Your voice is not clear, Mr. Shivam. Can you be a little louder?

Siddartha Cherukuri: Your voice is not clear, Mr. Shivam.

Shivam Gupta: Hello.

Siddartha Cherukuri: Can you be a little loud?

Speaker #1: Is it clear now?

Shivam Gupta: Is it clear now?

Speaker #3: Yeah, thank you so much. Thank you.

Siddartha Cherukuri: Yeah. Thank you, sir.

Shivam Gupta: Yeah.

Speaker #1: Yeah. Can you say, are strontium orders mainly from Indian customers or export? Also, in application, where is the demand strongest—from magnet, ceramic, or other?

Siddartha Cherukuri: Thank you.

Shivam Gupta: Initially, strontium order mainly from Indian customer or export? Also, application where the demand is coming strongest from magnet, ceramic, or other?

Speaker #3: Sorry, I could not get your question. Can you repeat it, please?

Siddartha Cherukuri: Sorry, I could not get your question. Can you repeat, please?

Speaker #1: Is the initial strontium order mainly from Indian customers or exports? Also, which application is seeing the strongest demand—magnets or ceramics?

Shivam Gupta: Initially, Strontium order mainly from Indian customer or exports? Also, which application is seeing the strongest demand, magnet or ceramic?

Siddartha Cherukuri: Mostly flexible magnets.

Speaker #3: Mostly flexible magnet.

Speaker #1: Sorry. Flexible?

Shivam Gupta: Sorry. Flexible?

Speaker #3: Magnet. Magnet cast.

Siddartha Cherukuri: Magnet customer.

Speaker #1: Okay. And because the Patna plant was shut for around three weeks during this quarter, what was the impact on production and revenue?

Shivam Gupta: The Vikashapur, Patna plant was shut around three weeks during this quarter. What was the impact on production and revenue?

Speaker #3: There was no impact. In fact, it was positive because we had some carry-forward stocks, whose values have increased, and that didn't really impact our margins.

Siddartha Cherukuri: There was no impact. In fact, it was positive because we had some carry forward stocks which values have increased and that didn't really impact our margins. Also, given the capacity, what we are having here, we were able to cover up the volumes lost during the maintenance period.

Speaker #3: Also, given the capacity that we have, we were able to cover up the volumes lost during the maintenance period.

Speaker #1: Okay, sir. That's it from my side. Thank you.

Shivam Gupta: Okay, sir. That's it from my side. Thank you.

Speaker #4: Thank you. Participants with questions may please enter 'star' followed by 'one.' The next question is from the line of Sudhir Beda from Beda Family Office.

Operator: Thank you. Participants with questions may please enter star followed by one. The next question is from the line of Sudhir Bera from Bera Family Office. Please go ahead.

Speaker #4: Please go ahead.

Speaker #1: Yeah. Sudharji, good morning, and congratulations for continuously declaring good results. Thank you for that. My questions are: can you throw some light on your mining operation?

Sudhir Bera: Yeah. Siddarthji, good morning and congratulations for continuously declaring the good results. Thank you for that. My questions are, can you throw some light on your mining operation? I believe that the processing plant and mining together will add substantial EBITDA to our chrome business. Can you throw some light when it will happen? When the first consignment from South Africa will arrive in the plant so that the forward integration can be done?

Sudhir Bheda: Yeah. Siddarthji, good morning and congratulations for continuously declaring the good results. Thank you for that. My questions are, can you throw some light on your mining operation? I believe that the processing plant and mining together will add substantial EBITDA to our chrome business. Can you throw some light when it will happen? When the first consignment from South Africa will arrive in the plant so that the forward integration can be done?

Speaker #1: I believe that processing plant and mining together will add substantial EBITDA to our chrome business. So, can you throw some light on when it will happen—when the first consignment from South Africa will arrive at the plant so that the forward integration can be done?

Speaker #3: Good morning, Mr. Sudhir. Thank you very much for your question. I did update in my opening note that currently, multiple activities have been taken up, including stabilizing the asset as well as engineering and repurposing of the asset.

Siddartha Cherukuri: Good morning, Mr. Sudhir. Thank you very much for your question. I did update a bit in my opening notes that currently multiple activities have been taken up, including stabilizing the asset as well as engineering and refurbishment of the asset. We are currently working with the contractors to mobilize things up. We are expecting the production to start anytime towards end of this month. With that being said, volumes will start coming from the H2 of this financial year. The mining activity is progressing very well. We are currently working on improving the wash plant.

Speaker #3: And we are currently working with the contractors to mobilize things up. We are expecting the production to start anytime towards the end of this month.

Speaker #3: With that being said, volume will start coming from the second half of this financial year. The mining activity is progressing very well. They're currently working on improving the wash plant.

Speaker #1: And how is the quality of the chrome ore?

Sudhir Bera: How is the quality of the chrome ore?

Sudhir Bheda: How is the quality of the chrome ore?

Speaker #3: It's as per what we are using, because we have used material from this mine in the past. We don't foresee any challenges.

Siddartha Cherukuri: It's as per what we are using, because we have used material from this mine in the past. We don't foresee any challenges.

Speaker #1: Okay. So from the second half of the year, when we start getting the chrome ore from our own mines, what could be the improvement in our gross margin?

Sudhir Bera: Okay. From H2 of the year, when we start getting the chrome ore from our own mines, what could be the improvement in our gross margin?

Sudhir Bheda: Okay. From H2 of the year, when we start getting the chrome ore from our own mines, what could be the improvement in our gross margin?

Speaker #3: Yeah, it's very hard to comment on it now because we need to—we have to go by arm's length pricing, on where the market is.

Siddartha Cherukuri: It's very hard to comment on it now, because we have to go by arm's length pricing on where the market is in a few months from now. I can tell you currently our gross margins, we are at 44% to 45%. Ideally, we will be getting to 50%.

Speaker #3: In a few months from now. But I can tell you, currently, our gross margins are at 44–45 percent. Ideally, we will be getting to 50 percent.

Speaker #1: Great. Great.

Sudhir Bera: Great.

Sudhir Bheda: Great.

Speaker #3: Towards the end of this year, that will definitely get us to what we are targeting—20% EBITDA. Let me put it that way.

Siddartha Cherukuri: Towards end of this year. That will definitely get us to what we are targeting of 20% EBITDA. Let me put it that way.

Speaker #1: Great. And sir, my last question is: we have spent close to around—did heavy capex last year, ₹240, ₹250, to ₹300 crore kind of capex.

Sudhir Bera: Great. Sir, my last question is, we did heavy CapEx last year, INR 240, 250 to 300 kind of CapEx. In which vertical we have done the CapEx and what kind of ROI we are looking at this CapEx which happened last year?

Sudhir Bheda: Great. Sir, my last question is, we did heavy CapEx last year, INR 240, 250 to 300 kind of CapEx. In which vertical we have done the CapEx and what kind of ROI we are looking at this CapEx which happened last year?

Speaker #1: So, in which vertical have we done the capex, and what kind of ROI are we looking at for this capex that happened last year?

Speaker #3: So, we invested this amount into our existing product mix to expand our value-added derivative, which is chrome oxide green. For this, we are anticipating a long-term supply agreement and a strategic relationship moving forward.

Siddartha Cherukuri: We invested this amount into our existing product mix to expand a value-added derivative, which is Chrome Oxide Green, for which we are anticipating a long-term supply agreement and a strategic relationship moving forward. Also into DMSO, where the major investment has gone into upwards of INR 200 crores. This is again, a value-added derivative and our first organic product which we are venturing into.

Speaker #3: Also into DMSO, where the major investment has gone—upwards of ₹200 crores. This is again a value-added derivative and our first organic product, which we are venturing into.

Speaker #1: Right, sir. Thank you very much for giving me the opportunity to ask the question, and all the best.

Sudhir Bera: Right, sir. Thank you very much for giving me the opportunity to ask the question, and all the best.

Sudhir Bheda: Right, sir. Thank you very much for giving me the opportunity to ask the question, and all the best.

Speaker #4: Thank you.

Operator: Thank you.

Speaker #3: Thank you so much. Thank you.

Siddartha Cherukuri: Thank you so much. Thank you.

Speaker #4: The next question is from the line of Ashish Khurana from ANK Capital. Please go ahead.

Operator: The next question is from the line of Ashish Khurana from ANK Capital. Please go ahead.

Speaker #1: Oh, thank you. Good morning, Sudharji, Hanumanji. Firstly, congrats from my side as well for a decent quarter, given the context of the overall situation and the plant shutdowns.

Ashish Khurana: Thank you. Good morning, Siddharth, Hanumantji. Firstly, congrats from my side as well for a decent quarter given the context of the overall situation and the plant shutdowns. I think heartening to see that on the chromium side, we are moving to value-added products like chrome metal in the future and Chrome Oxide Green. Congrats for that. Firstly, my question was on the strontium side. I think we have previously indicated that the gross margins there we are expecting are in the range of 50-odd%. This quarter, were we able to hit that? Because there was some news that some of the raw materials like celestite, et cetera, had seen spikes. Are we at 50% already, or is there a temporary margin pressure there?

Speaker #1: And I think it's heartening to see that on the chromium side, we are moving to value-added products like chrome metal in the future and chrome oxide green.

Speaker #1: So, congrats for that. So, firstly, my question was on the strontium side. I think we have previously indicated that the gross margins there we are expecting are in the range of 50-odd percent.

Speaker #1: But this quarter, I mean, were we able to hit that? Because there was some news that some of the raw materials, like selly-style, etc.

Speaker #1: Had seen spikes. So are we at 50 percent already, or is there a temporary margin pressure there?

Speaker #3: Good morning. Thank you so much for your question. More than the margin pressure, it's a stabilization phase for our strontium chemistry business. It's very hard to say that the current margins that we have achieved in strontium are the normalized ones, because we are anticipating that as we improve our chemistry and as we improve our operations, the operating leverage as well as the efficiencies will also start coming in.

Hanumant Bhansali: Good morning. Thank you so much for that question. More than the margin pressure, it's a stabilization phase for our strontium chemistry business. It's very hard to say that the current margins that we have achieved in strontium are the normalized ones, because we are anticipating that as we improve our chemistry, as we improve our operations, the operating leverage as well as the efficiencies will also start coming in this business. What we can see in terms of market confidence is that our operating revenues itself in Q1, like it was highlighted earlier, have crossed INR 24 crores, which was nearly the entire revenues for the full year last year. As we go ahead, as we see the quarters going forward, we are going to have a better clarity on the gross margins and EBITDA margins that this business will deliver.

Speaker #3: In this business, what we can see in terms of market confidence is that our operating revenues itself in Q1, like it was highlighted earlier, have crossed ₹24 crore.

Speaker #3: Which was nearly the entire revenue for the full year last year. So, as we go ahead and as we see the quarters going forward, we are going to have better clarity on the gross margins and EBITDA margins that this business will deliver.

Speaker #1: So correct me if I'm wrong, but I mean, the yield benefits, the fixed cost benefits, and the operating leverage benefits would maybe sit below the gross margin line.

Ashish Khurana: Sir, correct me if I'm wrong, the yield benefits, the fixed cost benefits, operating leverage benefits would maybe sit below the gross margin line. On the gross margin itself, are we at 50% or wherever you want to be, are we there currently or?

Speaker #1: But on the gross margin itself, I mean, are we at 50 percent, or wherever you want to be—are we there currently, or?

Speaker #3: Yes, that's a good question. So right now, because we have not yet fully stabilized the chemistry—if I can simplify it—the input-output ratios that we are anticipating from this chemistry are still sub-optimal.

Hanumant Bhansali: Yes, that's a good question. Right now, because we have not yet fully stabilized the chemistry, by that, if I can simplify it, the input-output ratios that we are anticipating from this chemistry is still suboptimal, which will improve in the quarters to come. That will automatically improve our gross margins.

Speaker #3: Which will improve in the quarters to come, and that will automatically improve our gross margins.

Speaker #1: Oh, got it.

Ashish Khurana: Got it. Secondly, on the mining side, while the answer to the previous participant kind of hinted on that, am I correct to assume that the ore transfer to India would mostly happen at cost and the profit benefits would sit in our standalone business and not in the subsidiary, right?

Speaker #3: Secondly, on the mining side, while your answer to the previous participant kind of hinted at that, am I correct to assume that the ore transfer to India would mostly happen at cost, and the profit benefits would sit in our standalone business and not in the subsidiary, right?

Speaker #3: See, we have to follow the transfer pricing mechanism which is already in place, and we have to look at that aspect before deciding on the price at which the transfer will happen.

Hanumant Bhansali: See, we have to follow the transfer pricing mechanism which is already in place. We have to look at that aspect before deciding on the price at which the transfer will happen, because we cannot have too much of margin sitting in either of these countries. Because the transaction is between related parties, we need to be very clear on the transfer pricing mechanism. Whenever there is a trade between our South African entity and Indian entity, it will be as per the regulatory norms as prescribed in transfer pricing regulations.

Speaker #3: Because we cannot have too much of margin sitting in either of these countries, and because the transaction is between related parties, we need to be very clear on the transfer pricing mechanism.

Speaker #3: So whenever there is a trade between our South African entity and Indian entity, it will be as per the regulatory norms, as prescribed in transfer pricing regulations.

Speaker #1: Got it. That is fair. There are two bookkeeping questions. So, on the subsidiary—sorry, on the standalone side, I think there was a shutdown.

Ashish Khurana: Got it. That is fair. Just two bookkeeping questions. On the standalone side, I think so there was a shutdown.

Speaker #1: And I mean, we saw the costs, including the power cost, selling cost, and all that, come down. But the manufacturing cost line item on the standalone side went up by around 200 basis points.

Hanumant Bhansali: Yes

Ashish Khurana: We saw the costs, including the power cost, selling cost, and all that come down, but the manufacturing cost line item on the standalone side went up by 200 basis points. I think it, earlier in our annual reports, it had labor costs and some other costs. What was the reason for that increase in that line item?

Speaker #1: I think earlier in our annual reports, it had labor costs and some other costs. So what was the reason for that—for that increase in that line item?

Hanumant Bhansali: In manufacturing costs, one of the line items is also repairs and maintenance. Because we had a maintenance during that quarter, there was more spending that was done on repairs and maintenance, which is captured under the manufacturing head.

Speaker #3: In manufacturing costs, one of the line items is also repairs and maintenance. And because we had a maintenance during that quarter, there was more spending that was done on repairs and maintenance, which is captured under the manufacturing head.

Speaker #1: Got it, so it's a one-time cost. And lastly, there is a spike in other income—so is that foreign exchange related or is it something else in this quarter sequentially?

Ashish Khurana: Got it. It's a one-time cost. Lastly, there is a spike in other income. Is that foreign exchange related or something else in this quarter, sequentially?

Speaker #3: No, that's correct. The other income, as you rightly observe, increased as a result of 31% higher exports during Q1 FY27 in comparison to Q4 FY26.

Hanumant Bhansali: No, that's correct. The other income, as you rightly observed, increased as a result of 31% higher exports during Q1 FY26 in comparison to Q4 FY26. As a result of that, we saw higher net foreign exchange gains equivalent to INR 11.9 crores. Thereby, the overall other income reported in the company stood at close to about INR 12.87 crores.

Speaker #3: And as a result of that, we saw higher net foreign exchange gains equivalent to ₹11.9 crores. Thereby, the overall other income reported in the company stood at close to about ₹12.87 crores.

Speaker #1: Oh, noted. Thank you. That's it from my side. All the best for the rest of the year. Thank you.

Ashish Khurana: Noted. Thank you. That's it from my side. All the best for rest of the year. Thank you.

Speaker #3: Thank you very much.

Hanumant Bhansali: Thank you very much.

Speaker #4: Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter 'star' followed by 'one' on your handset. The next question is from the line of Vishna from Sapphire Capital.

Operator: Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter star followed by one on your handset. The next question is from the line of Disha from Sapphire Capital. Please go ahead.

Speaker #4: Please go ahead.

Speaker #5: Hello. Am I audible, sir?

[Analyst] (Sapphire Capital): Hello. Am I audible, sir?

Disha Gandhi: Hello. Am I audible, sir?

Speaker #4: Yes, ma'am. Yes.

Operator: Yes, ma'am.

Hanumant Bhansali: Yes. Disha, please continue.

[Analyst] (Sapphire Capital): Yes. Thank you so much, sir, for this opportunity. A couple of questions. Firstly, sir, the revenue growth this quarter we've seen around 20%. How much of this was driven by volume and how much of this was driven by increase in realization?

Disha Gandhi: Yes. Thank you so much, sir, for this opportunity. A couple of questions. Firstly, sir, the revenue growth this quarter we've seen around 20%. How much of this was driven by volume and how much of this was driven by increase in realization?

Speaker #5: Thank you so much for this opportunity. I have a couple of questions. You said the revenue growth this quarter was around 25%. How much of this was driven by volume, and how much was driven by an increase in realization?

Speaker #3: Your question was not clear, Vishnu. Could you please repeat it?

Hanumant Bhansali: Your question was not clear, Disha. Could you please repeat?

Speaker #5: Yeah, I was just asking about the revenue growth this quarter. If you could just give me a breakup between how much of this was driven by volume and how much of this was driven by value.

[Analyst] (Sapphire Capital): Yeah, I was just asking the revenue growth this quarter, if you could just give me a breakup between how much of this was driven by volume and how much of this was driven by value.

Disha Gandhi: Yeah, I was just asking the revenue growth this quarter, if you could just give me a breakup between how much of this was driven by volume and how much of this was driven by value.

Speaker #3: So, we achieved total operating revenues of ₹433 crore in this quarter. In comparison to Q1 FY26, that is, the same quarter last year, we saw an increase in revenues because of multiple factors.

Hanumant Bhansali: We achieved the total operating revenues of INR 433 crore in this quarter. In comparison to Q1 FY26, that is same quarter last year, we saw increase in revenues because of multiple factors. One is our Strontium business is operational now, which is also contributing to the overall revenue as well as value. Our Barium business capacity utilization as with this blended realizations have improved over the last one year. Overall, even the Chromium business, we've seen a shift in the product mix, which has led to higher realizations. It's a combination of both volume increase as well as value increase.

Speaker #3: One is our strontium business's operational loan, which is also contributing to the overall revenue as well as value. Our barium business capacity utilization, as well as the blended realizations, have improved over the last one year.

Speaker #3: And overall, even in the chromium business, we've seen a shift in the product mix, which has led to higher realizations. So, it's a combination of both volume increase as well as value increase.

Speaker #5: Will it be possible for you to quantify how much was the volume buy, and how much?

[Analyst] (Sapphire Capital): Will it be possible for you to quantify how much was the volume and how much

Disha Gandhi: Will it be possible for you to quantify how much was the volume and how much

Speaker #3: No, as a company, we do not quantify our volume or value growth.

Hanumant Bhansali: No. As a company, we do not quantify our volume or value growth.

Speaker #5: Okay, okay. But we do expect this momentum to sustain. There was no one.

[Analyst] (Sapphire Capital): Okay. We do expect this momentum to sustain, that there was no volume.

Disha Gandhi: Okay. We do expect this momentum to sustain, that there was no volume.

Speaker #3: Over the long-term fundamentals, yes, definitely. In the near to medium term, we need to look at the global factors, which also come into play.

Hanumant Bhansali: Over long-term fundamentals, yes, definitely. In the near to medium-term, we need to look at the global factors which also come into play. Those are the reasons wherein it's very hard to quantify how a particular quarter will look like. Instead of focusing on quarter-to-quarter variability, we would like to talk about year-on-year aspects of our company.

Speaker #3: And those are the reasons why it's very hard to quantify how a particular quarter will look like. So instead of focus on focusing on quarter to quarter variability, we would like to talk about year-on-year aspects.

Speaker #3: Of our company.

Speaker #5: Right, right. And so, the strontium business—so, I think that the contribution this quarter was 25 crore, right? What is the current utilization there, and what sort of overall contribution from this segment are we looking at for this year and for next year?

[Analyst] (Sapphire Capital): Okay. Right. Sir, the strontium business, I think that was the contribution this quarter was INR 25 CVR. What is the current utilization there and what sort of overall contribution from this segment are we looking at for this year and for the next year?

Disha Gandhi: Okay. Right. Sir, the strontium business, I think that was the contribution this quarter was INR 25 CVR. What is the current utilization there and what sort of overall contribution from this segment are we looking at for this year and for the next year?

Speaker #3: Thank you for your question. So yes, we have a capacity of close to about 10,000 tons in the strontium business. We are currently operating at 50% utilization over there.

Hanumant Bhansali: Thank you for your question. Yes, we have a capacity of close to about 10,000 tons in strontium business. We are currently operating at 50% utilization over there. We would like to end the year at close to about 65% to 75% capacity utilization. Also, as the business improves, as our chemistry improves, we are also going to see better margins flowing in this business.

Speaker #3: And we would like to end the year at close to about 65 to 75 percent capacity utilization. Also, as the business improves, as our chemistry improves, we are also going to see better margins flowing into this business.

Speaker #5: And what do you think the total heat mixture is for this year?

[Analyst] (Sapphire Capital): What will be the total CapEx, sir, for this year?

Disha Gandhi: What will be the total CapEx, sir, for this year?

Speaker #3: This year, we have a total capital outlay, or capex outlay, of close to about ₹200 to ₹250 crores.

Hanumant Bhansali: This year, we have a total capital outlay, CapEx outlay of close to about 200 to 250 crores.

Speaker #5: And could you give a break-up of where and how much you are spending, where?

[Analyst] (Sapphire Capital): Could you give a break of how much you will be spending where?

Disha Gandhi: Could you give a break of how much you will be spending where?

Hanumant Bhansali: Yes. In DMSO, our total project estimated CapEx is between INR 205 to 240 crores, of which we have spent close to about INR 68 crores up to 30 June. Chromium. We are expanding our derivative base. Almost INR 50 crores will be invested over there. I'm saying in total. Some of that is already spent in the last year.

Speaker #3: Yes. In DMSO, our total project estimated capex is between ₹205 to ₹240 crores, of which we have spent close to about ₹68 crores up to 30th June.

Speaker #3: Chromium—we are expanding our derivative base. Almost ₹50 crores will be invested over there. I'm saying in total. Some of that has already been spent in the last year.

[Analyst] (Sapphire Capital): Okay.

Disha Gandhi: Okay.

Speaker #3: For the South Africa business, the capital outlay will be very limited—in the range of ₹20 to ₹25 crore. As for the barium business, we are expanding our backward integration line.

Hanumant Bhansali: South Africa business. The capital outlay will be very limited, in the range of INR 20 to 25 crores. Barium business. We are expanding our backward integration line, and we are likely to see an investment of close to about INR 40 crores to complete these projects.

Speaker #3: And we are likely to see an investment of close to about ₹40 crore to complete these projects.

Speaker #5: Okay, okay. And just the last thing, sir, on the margins. You said in the second quarter we are expecting margins to go down further because of the freight cost increase.

[Analyst] (Sapphire Capital): Okay. Just the last thing, sir, on the margins. You said the Q2, we are expecting margins to go down further because of the freight cost increase. In the H2, what sort of margin levels are we looking at? On a blended basis for FY26, what sort of EBITDA margins are you looking at?

Disha Gandhi: Okay. Just the last thing, sir, on the margins. You said the Q2, we are expecting margins to go down further because of the freight cost increase. In the H2, what sort of margin levels are we looking at? On a blended basis for FY26, what sort of EBITDA margins are you looking at?

Speaker #5: But then, in the second half, what sort of margin levels are we looking at? And on a blended basis for FY27, what sort of EBITDA margins are you looking at?

Speaker #3: We are not giving any guidance for the second quarter, or the year as a whole. Of course, on a targeted level, we are looking at a 20% EBITDA margin.

Siddartha Cherukuri: We are not giving any guidance for the Q2 or the year as a whole. Of course, on a targeted level, we are looking at 20% EBITDA margin. That's our stated target for a very long term. For that, we would like to see overall momentum from the macro environment also to come into picture. However, if we look at our growth factors, it will be a combination of the CapEx that we will complete through the year, including the one that we highlighted about launching a new specialty chemical, DMSO, and completion of our backward integration in barium business.

Speaker #3: Those are our stated targets for the very long term, and for that, we would like to see overall momentum from the macro environment also come into the picture.

Speaker #3: However, if you look at our growth factors, it will be a combination of the capex that we will complete through the year, including the one that we highlighted about launching a new specialty chemical, DMSO.

Speaker #3: And completion of our backward integration in the barium business.

Speaker #5: Okay, okay, okay. That is it, sir, from my side. All the best. Thank you. Thank you.

[Analyst] (Sapphire Capital): Okay. That is it from my side. All the best. Thank you.

Disha Gandhi: Okay. That is it from my side. All the best. Thank you.

Siddartha Cherukuri: Yes. Thank you.

Speaker #3: Thank you.

Speaker #4: Participants with questions may please enter 'star' followed by 'one.' The next question is from the line of Mahesh Talati from Agility Advisors. Please go ahead.

Operator: Thank you. Participants with questions may please enter star followed by one. The next question is from the line of Mahesh Talati from Agility Advisors. Please go ahead.

Speaker #6: Oh, yeah. Hi, sir. Thank you so much for your help. I also wanted to understand, are you...

Mahesh Talati: Yeah. Hi, sir. I just wanted to understand.

Mahek Talati: Yeah. Hi, sir. I just wanted to understand.

Operator: I'm sorry to interrupt, sir. Your voice is not very audible.

Speaker #4: I'm sorry to interrupt, sir. Your voice is not very audible.

Speaker #6: Is it audible now?

Mahesh Talati: Is it audible now?

Mahek Talati: Is it audible now?

Speaker #4: Yes, this is. Thank you.

Operator: Yes, this is. Thank you.

Speaker #6: Okay, I just wanted to understand—you mentioned that there is a 20% logistics cost in FY2 to FY27. So, will the entire increase in the logistics cost be passed on to the customers?

Mahesh Talati: I just wanted to understand, you mentioned that there is a 20% logistics cost in FY22 to FY27. Will the entire increase in the logistics cost be passed on to the customers?

Mahek Talati: I just wanted to understand, you mentioned that there is a 20% logistics cost in FY22 to FY27. Will the entire increase in the logistics cost be passed on to the customers?

Speaker #3: We are working on it. It remains a challenging and sensitive area. Given our relationship, we'll be able to marginally pass it on. Some of our peers, like those in South Africa and Turkey, are not impacted by the Red Sea or horizons, because most of the cargo is flowing through the Cape of Good Hope and the Mediterranean side.

Siddartha Cherukuri: We are working on it. It remains a challenging and a sensitive area. Given our relationship, we will be able to marginally pass it on because some of our peers like in South Africa and Turkey, they are not impacted by the Red Sea or Hormuz because most of the cargo is going through Cape of Good Hope and the Mediterranean side. In certain accounts, we have been successful. Rest of them, we are continuously engaged and seeing what we can do on that side.

Speaker #3: So, in certain accounts, we've been successful. For the rest of them, we are continuously engaged in seeing what we can do on that side.

Speaker #6: So, how much of an impact are you expecting on our margins this quarter because of this increase in logistics cost? Can you give us a ballpark number, sir?

Mahesh Talati: How much are we expecting an impact on our margins this quarter because of this increasing logistics cost? Any ballpark number also?

Mahek Talati: How much are we expecting an impact on our margins this quarter because of this increasing logistics cost? Any ballpark number also?

Speaker #3: I won't be able to share because we are still negotiating with the shipping lines, and in parallel, also with our customers. And as a strategy, in order to outweigh this impact, we are trying to focus more on the domestic sales for this quarter and Q2 going forward.

Siddartha Cherukuri: I won't be able to share because we are still negotiating with the shipping lines, parallelly also with our customers.

Mahesh Talati: Okay.

Mahek Talati: Okay.

Siddartha Cherukuri: As a strategy

Mahesh Talati: There would be some impact.

Mahek Talati: There would be some impact.

Siddartha Cherukuri: As a strategy, in order to outweigh this impact, we are trying to focus more on the domestic sales for this quarter and quarter going by. Both our domestic and export team are working hand in hand and seeing what volumes are available and going as per the production plan, what we need to tweak for this particular quarter. We'll make adjustments because we remain very dynamic given the environment we are facing.

Speaker #3: So, I mean, both our domestic and exports teams are working hand in hand and seeing what volumes are available, and going as per the production plan—what we need to tweak.

Speaker #3: For this particular quarter, and we'll make adjustments because we remain very dynamic, given the environment we are facing.

Speaker #6: Understood. And sir, you mentioned four different CAPEXes: DMSO, Chrome Metal, and Barium backward. Are we expecting all the CAPEX to go live by FY28?

Mahesh Talati: Understood. Sir, you mentioned four different CapEx, DMSO, chrome metal, and barium backward. Are we expecting all the CapEx to go live by FY28? There would be some push forward as well?

Mahek Talati: Understood. Sir, you mentioned four different CapEx, DMSO, chrome metal, and barium backward. Are we expecting all the CapEx to go live by FY28? There would be some push forward as well?

Speaker #6: Or would there be some push forward as well?

Speaker #3: DMSO, yes, I think we remain positive. The capex is going as per the plan. Chrome metal, very soon we'll be—I think we've been going back and forth with this for quite some time, but we've decided to take a call now.

Siddartha Cherukuri: DMSO, yes, I think we remain positive. The CapEx is ongoing as per the plan. Chrome metal, very soon, I think we've been going back and forth with this for quite some time, but we decided to take a call now. I think you'll receive an announcement very soon, which will be a little strategic in nature, which is linked to a long-term supplier and a strategic business partnership moving forward. This will definitely change the way our products mix as well as the business will function moving forward in the chrome, and gives us a lot more visibility in the upstream, both in terms of revenues and margins, and gives us a lot more leverage in terms of which products to manufacture rather than depending on lower margin derivatives.

Speaker #3: I think you'll receive an announcement very soon, which will be a little strategic in nature and is linked to a long-term supply and a strategic business partnership moving forward.

Speaker #3: So, this will definitely change the way our product mix as well as the business will function moving forward in chrome and gives us a lot more visibility in the upstream, both in terms of revenues and margins, and gives us a lot more leverage in terms of which products to manufacture rather than depending on lower-margin derivatives.

Speaker #6: Okay. And sir, given chrome metal...

Mahesh Talati: Sir, given chrome metal-

Mahek Talati: Sir, given chrome metal-

Speaker #3: FY28. FY28.

Siddartha Cherukuri: By 2028.

Speaker #6: Okay. And sir, given chrome metal is a bit of a complex material, are we planning any tech transfer or tie-up for development, or will everything be done by in-house R&D?

Mahesh Talati: Okay. Sir, given chrome metal is a bit of a complex material, are we planning any tech transfer or tech tie-up for development, or everything will be done via in-house R&D?

Mahek Talati: Okay. Sir, given chrome metal is a bit of a complex material, are we planning any tech transfer or tech tie-up for development, or everything will be done via in-house R&D?

Speaker #3: Like I said, I reiterate what I said—that you will be getting an update from us relatively soon. And, like I said, this will be linked to a strategic long-term supply as well as a business partnership moving forward.

Siddartha Cherukuri: Like I said, I reiterate what I said that you will be getting an update from me relatively soon.

Mahesh Talati: Okay.

Mahek Talati: Okay.

Siddartha Cherukuri: Like I said, this will be linked to a strategic long-term supply as well as a business partnership moving forward.

Mahesh Talati: Understood.

Mahek Talati: Understood.

Speaker #3: We're very excited about this—let me put it that way.

Siddartha Cherukuri: We're very excited about this, let me put it that way.

Speaker #6: Okay, understood. That's it from my side. Thank you.

Mahesh Talati: Okay, understood. That's it from my side. Thank you.

Mahek Talati: Okay, understood. That's it from my side. Thank you.

Speaker #4: Thank you. Participants with questions, may I please ask you to enter 'star' followed by 'one' on your handset. The next question is from the line of Yash from Mavira AMC.

Operator: Thank you. Participants with questions may please enter star followed by one on your handset. The next question is from the line of Yash from Mavira AMC. Please go ahead.

Speaker #4: Please go ahead.

Speaker #7: Yeah. Hello. Hi, sir. Thank you for the opportunity, and congrats on a good set of numbers. My question again is around the Chrome portfolio, specifically the long-term type that you spoke about.

Yash: Yeah, hello. Hi, sir. Thank you for the opportunity, and congrats on a good set of numbers. My question again is around the chrome portfolio, the long-term tie-up that you spoke about. One is that it will be margin accretive rather than margin dilutive. Is that understanding correct, sir?

Yash Visharia: Yeah, hello. Hi, sir. Thank you for the opportunity, and congrats on a good set of numbers. My question again is around the chrome portfolio, the long-term tie-up that you spoke about. One is that it will be margin accretive rather than margin dilutive. Is that understanding correct, sir?

Speaker #7: So, one is that it will be margin creative rather than margin dilutive. Is that understanding correct, sir?

Speaker #3: Yeah, indeed. It's going to be margin assertive, and it also gives a lot more visibility because it's tied to a long-term supply agreement and a formula-driven pricing.

Siddartha Cherukuri: Yeah, indeed. It's going to be margin accretive, A, and also gives a lot more visibility because it's tied to a long-term supply agreement and a formula-driven pricing.

Speaker #7: Understood, sir. So, any color around the quantity of the contract?

Yash: Understood, sir. Sir, any color around the quantity of the contract?

Yash Visharia: Understood, sir. Sir, any color around the quantity of the contract?

Speaker #3: I'm afraid not at this juncture, because we have signed an NDA, so we won't be able to talk much about it. But I can tell you, I'm very excited.

Siddartha Cherukuri: I'm afraid not at this juncture because-

Yash: Okay

Yash Visharia: Okay

Siddartha Cherukuri: We have signed an NDA, we won't be able to talk much about it. I can say we are very excited.

Speaker #3: It's going to bring good visibility for our Chrome business moving forward.

Yash: Sure.

Yash Visharia: Sure.

Siddartha Cherukuri: It's going to bring good visibility for our chrome business moving forward.

Speaker #7: Understood, sir. And sir, how much capex are we doing on the solar project—from 5 to 20 megawatt?

Yash: Understood, sir. Sir, how much CapEx are we doing on the solar project from 5 to 20 MW?

Yash Visharia: Understood, sir. Sir, how much CapEx are we doing on the solar project from 5 to 20 MW?

Speaker #3: The total capex outlay for solar will be close to about ₹5 to ₹6 crores, and the rest will be under the SPV model, wherein we will be able to buy the solar at a fixed price.

Siddartha Cherukuri: The total CapEx outlay for solar will be close to about INR 5 to 6 crores, the rest will be under the SPV model, wherein we will be able to buy the solar at a fixed price on the longer term.

Speaker #3: On the longer term.

Speaker #7: Okay, understood, sir. Sure. Thank you so much.

Yash: Okay. Understood, sir. Sure. Thank you so much.

Yash Visharia: Okay. Understood, sir. Sure. Thank you so much.

Speaker #3: Thank you.

Siddartha Cherukuri: Thank you.

Speaker #4: Thank you. To ask questions, please enter star and one. The next question is from the line of Siddhartha Mathew. Please go ahead.

Operator: Thank you. To ask questions, please enter star and one. The next question is from the line of Siddhartha Matthew. Please go ahead.

Operator: Thank you. To ask questions, please enter star and one. The next question is from the line of Siddharth Matthew. Please go ahead.

Speaker #7: Hello. Thank you for taking my question. Am I audible?

Siddhartha Matthew: Hello. Thank you for taking my question. Am I audible?

Siddharth Mathew: Hello. Thank you for taking my question. Am I audible?

Speaker #4: Yes, sir, you are. Please proceed.

Operator: Yes, sir, you are. Please proceed.

Speaker #3: Just to follow up on this supply agreement that you were talking about, when you say that it will give the company a lot of visibility, what exactly do you mean?

Siddhartha Matthew: Just to follow up on this supply agreement that you were talking about. When you say that it will give the company a lot of visibility, what exactly do you mean? Can you share a little more?

Siddharth Mathew: Just to follow up on this supply agreement that you were talking about. When you say that it will give the company a lot of visibility, what exactly do you mean? Can you share a little more?

Speaker #3: Can you share a little more?

Speaker #7: Well, I think we are looking at certain fixed volumes over the next 10 years, specifically for our Chrome Oxide Green product. This supply will be under a binding supply agreement linked to an exchange.

Siddartha Cherukuri: Well, I think we are looking at a certain fixed volumes over the next 10 years, specifically for our Chrome Oxide Green product. This supply will be a binding supply agreement linked to an exchange, plus the incidentals, like the logistics cost and movement. In the current environment, the products what we do is more on a quarterly, on a spot basis, what our peers are doing. This one is a lot more strategic in nature, kind of a take or pay agreement where both parties are obligated, and it gives us a lot more visibility moving forward.

Speaker #7: Plus the incidentals, like the logistics cost and movement. Whereas, in the current environment, the products we do are more on a quarterly, like on a spot basis, similar to what our peers are doing.

Speaker #7: Whereas this one is a lot more strategic in nature, kind of a take or pay agreement where we are where both parties are obligated.

Speaker #7: And it gives us a lot more visibility moving forward.

Speaker #3: Right, right. Okay, okay. And just a question regarding the current debt levels—can you let me know how much debt the companies carry?

Siddhartha Matthew: Right. Okay. Just a question regarding the current debt levels. Can you let me know how much debt the company is carrying?

Siddharth Mathew: Right. Okay. Just a question regarding the current debt levels. Can you let me know how much debt the company is carrying?

Speaker #7: Thank you, Mr. Siddharth, for your question. So, let me answer your question. We pay tax at the full 27% plus SESS levels. Sorry, your question is related to debt?

Hanumant Bhansali: Thank you, Mr. Siddartha, for your question. Let me answer your question that we pay tax at full 27% plus cess levels. Sorry, your question is related to debt?

Speaker #3: Yes. How much debt is currently on the books?

Siddhartha Matthew: Yes. How much debt is probably on the books?

Siddharth Mathew: Yes. How much debt is probably on the books?

Speaker #7: Yeah. So as per the balance sheet that we've reported, pending 31st March, the total debt in our books is about ₹527 crores. That includes long-term borrowings and short-term borrowings.

Hanumant Bhansali: As per the balance sheet that we've reported ending 31 March, the total debt in our books is about INR 527 crores. That includes our long-term borrowings and short-term borrowings, which is at a debt-to-equity level, 0.49.

Speaker #7: Which is at a debt-to-equity level of 0.49.

Speaker #3: Okay, okay. And is that for the current quarter as well, including the planned capex?

Siddhartha Matthew: Okay. Is that for the current quarter as well, including the planned CapEx?

Siddharth Mathew: Okay. Is that for the current quarter as well, including the planned CapEx?

Speaker #7: No, we don't share the balance sheet figures on a quarterly basis. So, we will be able to update you on the balance sheet figures only once our second quarter results come out.

Hanumant Bhansali: No, we don't share the balance sheet figures on a quarterly basis, so we will be able to update you the balance sheet figures only once our Q2 results come out.

Speaker #3: Right. Okay. Okay, that's it. Thank you.

Siddhartha Matthew: Right. Okay. That's it. Thank you.

Siddharth Mathew: Right. Okay. That's it. Thank you.

Speaker #7: Okay. Thank you.

Hanumant Bhansali: Okay. Thank you.

Speaker #4: Thank you. The next question is from the line of Vimansha from ITI Mutual Fund. Please go ahead.

Operator: Thank you. The next question is from the line of Vaman Shah from ITI Mutual Fund. Please go ahead.

Speaker #8: Yeah, hi. Hello.

Vaman Shah: Yeah, hi. Hello.

Speaker #3: Yeah, good morning. Good morning.

Siddartha Cherukuri: Yeah, good morning.

Speaker #8: Yeah, hi. Good morning. Just a quick one: how long before we see a significant improvement owing to the start of your mine in South Africa?

Vaman Shah: Yeah. Hi. Morning. Just a quick one on how long before we see a massive improvement owing to the starting of your mine in South Africa. We see no improvement in the gross margins whatsoever. Is it likely to come from the Q2 or any timelines on that?

Speaker #8: We see no improvement in the gross margins whatsoever. So, is it likely to come from the second quarter, or are there any timelines on that?

Siddartha Cherukuri: Thank you for your question, Mr. Vaman. Like I said, the gross margin improvement will be function of both upstream and downstream, like I mentioned.

Speaker #3: Thank you for your question, Mr. Devi. Like I said, the gross margin improvement will be a function of both upstream and downstream, as I mentioned earlier.

Speaker #8: No, just a moment. Because when we took over such a big asset, the idea was that this gives us reasonable protection in terms of gross margin behavior.

Vaman Shah: No. Just a moment. When we took over such a big asset, the idea was that this gives us a reasonable protection in terms of gross margin behavior. Nothing is visible whatsoever. What is the endeavor? If you cannot prove improvement in the gross margin, then the whole acquisition goes for a toss. The very basis of acquiring and waiting such a long period means that the capital allocation has not played out the way it was envisaged. Can you quickly comment on this?

Speaker #8: But nothing is visible whatsoever. So what is the endeavor? Because if you cannot prove improvement in the gross margin, then the whole acquisition goes for a toss, or the very basis of acquiring and waiting such a long period is lost.

Speaker #8: It means that the capital allocation has not played out the way it was envisaged. So, can you quickly comment on this?

Speaker #3: Yeah, we look at it slightly differently because this is a new line of activity, and the timelines are more or less the way we are looking at it.

Siddartha Cherukuri: Yeah. We look at it slightly differently because this is a new line of activity, the timelines are more or less where we are looking at, I think. The acquisition has been completed in November 2025. Thereafter, it took two months to transfer. Like I mentioned, it takes time to refurbish and organize the manpower and so on. Yes, I agree there is a delay, not to an extent where it raises the alarm. We still remain positive, things are progressing very well with respect to mining. The product what we are seeing on ground seems to be suitable for our production. With that being said, we are expecting the material to start flowing into India from the Q3 of this financial year. Now, if you ask me will that improve the gross margin by 50% right away from 44?

Speaker #3: I think the acquisition was completed in November 2025. Thereafter, it took two months to transfer. And like I mentioned, it takes time to refurbish and organize the manpower.

Speaker #3: And so on. So yes, I agree there is a delay, but not to an extent where it raises the alarm. So we still remain positive.

Speaker #3: And things are progressing very well with respect to mining. And the product that we are seeing on the ground seems to be suitable for our production.

Speaker #3: With that being said, we are expecting the material to start flowing into India from the third quarter of this financial year. Now, if you ask me how much will that improve the gross margin—will it go up to 50% right away from 44%? I think, partially, yes, it will get closer, but it will be hard for me to quantify exactly when we will be getting to 50%.

Siddartha Cherukuri: I think partially, yes, it will get closer, it will be hard for me to quantify exactly when we'll be getting to 50%. Ideally, towards the end of this year. That will be a combination of both upstream as well as the downstream support. Upstream in terms of this product mix change as well as downstream, the chrome ore falling. As you know, currently, chrome ore being a commodity freights play a very big impact. Even the movement cost within South Africa from the mine to the plant, the costs have gone up.

Speaker #3: Ideally, towards the end of this year, that will be a combination of both upstream as well as downstream support—upstream in terms of this product mix change, as well as downstream, the chrome or polymer.

Speaker #3: Because as you know, currently chrome, or being a commodity and freight, play a very big impact. Even the movement cost within South Africa, from the mine to the plant, the costs have gone up.

Speaker #8: No, no. By far. But your relative advantage still remains, right?

Vaman Shah: No, by far, your relative advantage still remains, right?

Speaker #3: Our relative advantage still remains, but it's hard to quantify how much. But definitely, relative to our peers, we do remain competitive. As for what will be retained in the business and what will be passed on to the customer moving forward, we need to take a strategic call.

Siddartha Cherukuri: Our relative advantage still remains, but it's hard to quantify how much. Definitely, relative to our peers, yeah, we do remain competitive. What will be retained in the business, what will be passed on to the customer moving forward, we need to take a strategic call.

Speaker #8: Okay, no, no. But if you treat the acquisition on a standalone basis...

Vaman Shah: Okay. No, if you treat the acquisition on a standalone basis.

Speaker #3: The mining is also a function of the quantities that we produce. The unit economics play a very important role as we go up.

Siddartha Cherukuri: The mining is also a function of the quantities what we produce, where the unit economics play a very important role. As we go up.

Speaker #8: But by far, I mean, the entire thesis was that it gives us the—no, no, it gives us the pole position in whatever we are doing.

Vaman Shah: By far, I mean, the entire thesis was that it gives us the.

Siddartha Cherukuri: The scalability

Vaman Shah: No, it gives us the pole position in whatever we are doing. Entire thesis of acquiring this mine was only that, right?

Speaker #8: So, the entire thesis for acquiring this mine was only that, right? That it gives you competitiveness against the Chinese and puts you in the top echelon of the cost curve.

Siddartha Cherukuri: Yeah.

Vaman Shah: That it gives you competitiveness against the Chinese and puts you in the top echelon of the cost curve. Hence, any vagaries of any variety can be smoothened out or will be reasonably bypassed, in a way.

Speaker #8: And hence, any vagaries of any variety can be smoothened out, or will be reasonably bypassed, in a way.

Speaker #3: Yeah, the question is the scalability, which we are going to address in the second half of this year. I think I'll be able to better answer your question towards the end of this year.

Siddartha Cherukuri: Yeah. The question is the scalability which we are going to do in H2 of this year. I think I'll be able to better answer your question towards the end of this year on when we would be able to get 50%. I think I'll come back to you with a clear answer. Let me put it that way.

Speaker #3: On when we would be able to get to 50%, I think I'll come back to you with a clear answer. Let me put it that way.

Speaker #8: No, but that's on track. That's the—

Vaman Shah: No, that's on track.

Speaker #3: That's on track. That's the reason I am saying that I have to see the volumes coming out. I have to see the scalability happening, which we remain positive about.

Siddartha Cherukuri: That's on track. That's the reason I am saying that I have to see the volumes coming out. I have to see the scalability happening, which we remain positive.

Speaker #8: Right. Secondly, after in your barium bisulfate which was it took time for you to see that with the paint guys. Again, only one of a kind manufacturer.

Vaman Shah: Right. Secondly, after in your Barium Sulphate, which it took time for you to see that with the paint guys. Only one of a kind manufacturer. That also seems to not have given any advantage, or is it still pipeline in the works, or can you just say something?

Speaker #8: Again, that also seems to not have given any advantage, or is it still a pipeline in the works, or can you just...

Speaker #3: No, I mean, it's already visible in the numbers. Since we are not quantifying, and we actually don't, in terms of what product, what is the margin.

Siddartha Cherukuri: No, it remains. It's already visible in the numbers. We are not quantifying, and actually we don't in terms of what product, what is the margin. It's as per the plan. I think, in terms of demand visibility as well as customer approvals are already in place, both in the domestic and export market. During our last concall also did mention.

Speaker #3: But it's as per the plan. And I think, in terms of demand visibility as well as customer approvals, those are already in place—both in the domestic and export markets.

Speaker #3: And during our last concourse.

Speaker #8: Oh, but then.

Speaker #3: I did mention.

Speaker #8: Then with.

Vaman Shah: With new-

Speaker #3: I also did mention—did mention about increasing the volumes moving forward. Even that plan is on.

Siddartha Cherukuri: I also did mention about increasing the volumes moving forward. Even that plan is on.

Speaker #8: Yeah, but with due respect, two things that we have done for positive incremental gross margin impact don't seem to be working. So, what is pulling it down?

Vaman Shah: Yeah, with due respect, two things that we have done for positive incremental gross margin impact don't seem to be working. What is pulling it down? Is there a certain category where we are losing the margin ability or which only you can highlight?

Speaker #8: Is there a certain category where we are losing margin ability, or which you alone can highlight?

Speaker #3: I would say, well, I mean, generally the demand environment for chrome, especially in the leather industry, continues to remain challenging. But what I mentioned is that, moving forward, the product mix would change—even in this quarter, it was visible.

Siddartha Cherukuri: I would say, well, generally the demand environment for chrome, especially the leather industry, continue to remain challenging. What I mentioned that moving forward, product mix would change. Even in this quarter, it was visible. It's not that we are going to do away with our Basic Chromium Sulphate, the leather volume, we are going to bring that volumes down sequentially over the year. Our focus will remain to be on Chrome Oxide mainly going into chrome metal refractories pigments, as well as Chromic Acid going into functional plating. Once we move in the direction which we are, there'll be improvements in the gross margin. That's what we do.

Speaker #3: It's not that we are going to do away with our basic chrome sulfate for the leather volume, but we are going to bring those volumes down sequentially over the year.

Speaker #3: And our focus will remain on chrome oxide, mainly going into chrome metal, refractories, pigments, as well as chromic acid going into functional plating.

Speaker #3: And once we move in the direction in which we are, there will be a lot more—there will be improvement in the gross margin. This is what we do.

Speaker #8: And lastly, what I just joined the call. Can you enumerate and for the sorry for the repetition, but can you enumerate what are the different things that we would be now looking to deploy capital or incremental capex towards?

Vaman Shah: lastly, I just joined the call. Sorry for the repetition, but can you enumerate what are the different things that we would be now looking to deploy capital or incremental CapEx towards?

Speaker #3: Yeah. We have invested close to ₹360 crores into capex. The bulk of this investment is going into dimethyl sulfoxide, with over ₹200 crores being invested into this product.

Siddartha Cherukuri: Yeah. We are investing close to INR 360 crores into CapEx. Bulk of this investment is going into dimethyl sulfoxide. Over INR 200 crores being invested into this product. Again, an import replacement. It's a solvent going into pharma and agro industry. As well as in order to meet this long-term agreement, we are enhancing our chrome oxide green production at our Vizag plant itself, whereby more sodium dichromate will be used into producing chrome oxide green moving forward. close to INR 350 crores is going into this.

Speaker #3: Again, an import replacement. It's a solvent going into the pharma and agro industry. As well as, in order to meet this long-term agreement, we are enhancing our chrome oxide green production at our Visak plant itself.

Speaker #3: Whereby more sodium dichromate will be used in producing chrome oxide green moving forward. So, close to ₹350 crore is going into this. And over and above, certain capex will be happening in our mine as well for some improvement.

Vaman Shah: Okay.

Siddartha Cherukuri: over and above, certain CapEx will be happening in our mine also for some improvement. That will be margin.

Speaker #3: But that will be margin.

Speaker #8: Okay, thank you. Thank you so much. I'll come back, and thank you. Thank you.

Vaman Shah: Okay. Thank you. Thank you so much, and I'll come back and meet you. Thank you.

Speaker #3: Thank you. Thank you. Thank you, Mr. Shea.

Siddartha Cherukuri: Thank you. Thank you. Thank you, Mr. Shah.

Speaker #2: Thank you. Participants with sessions. Spencer star and one. As there are no further questions from participants, I hand the floor over to the management for closing comments.

Operator: Thank you. Participants with questions can just star and one. As there are no further questions from participants, I hand the floor over to the management for closing comments.

Speaker #3: In conclusion, kindly note that our results, earnings release, and investor presentation have been uploaded on the stock exchanges. They will also be available on the company's website.

Hanumant Bhansali: In conclusion, kindly note that our results, earnings release, and investor presentation have been uploaded on the stock exchanges, and they will also be available on the company's website. If you have any questions, feel free to connect with us on investors@vishnuchemicals.com. Thank you everyone for your valuable time.

Speaker #3: If you have any questions, feel free to connect with us at investors@vishnuchemicals.com. Thank you, everyone, for your valuable time.

Speaker #2: Thank you very much. On behalf of MK Global Financial Services Limited, that concludes this conference call. Thank you for joining, and you may now disconnect your lines.

Operator: Thank you very much. On behalf of Emkay Global Financial Services Limited, that concludes this conference call. Thank you for joining, and you may now disconnect your lines. Thank you.

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Q1 2027 Vishnu Chemicals Ltd Earnings Call

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