Q1 2027 Transpek Industry Ltd Earnings Call

August 20, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to the Transpek Industry Limited Q1 FY27 business update call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call.

Operator: Ladies and gentlemen, good day and welcome to Transpek Industry Limited Q1 FY27 business update call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bimal Mehta, Managing Director. Thank you and over to you, sir.

Speaker #1: These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on a touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Abhimal Mehta, Managing Director. Thank you, and over to you, sir.

Speaker #2: Thank you. Good afternoon, everyone. On behalf of Transpek Industry Limited, I would like to extend a warm welcome to all participants joining us today.

Bimal V. Mehta: Thank you. Good afternoon, everyone. On behalf of Transpek Industry Limited, I would like to extend a warm welcome to all participants joining us today. I am joined by our Chief Financial Officer, Mr. Pratik Shah, our Company Secretary, Mr. Alak Vyas, and Strategic Growth Advisors, our investor relations advisor. We will begin with a brief overview of the industry and business environment, followed by the key operational updates and financial highlights. Thereafter, we will open the floor for the question and answer session. For participants who are new on this call, our company should be best reviewed and assessed more on an annual basis due to its nature of business. Now we look at industry and macro environment. As you all are aware, the global business environment in FY26 remained complex and volatile, marked by geopolitical tensions, elevated energy prices, trade uncertainties, and continued supply chain disruptions.

Speaker #2: I am joined by our Strategic Financial Officer, Mr. Pratik Shah; our Company Secretary, Mr. Alak Vyas; and SGA, our investor relations advisor. We will begin with a brief overview of the industry and business environment, followed by key operational updates and financial highlights.

Speaker #2: Thereafter, we will open the floor for the question-and-answer session. For participants who are new on this call, our company should be best reviewed and assessed on an annual basis, due to the nature of its business.

Speaker #2: Now, we look at the industry and macro environment. As you all are aware, the global business environment in FY26 remained complex and volatile, marked by geopolitical tensions, elevated energy prices, trade uncertainties, and continued supply chain disruptions.

Speaker #2: The global chemical industry continued to face subdued demand across key markets, particularly in Europe and China, along with volatility in energy and raw material prices.

Bimal V. Mehta: The global chemical industry continued to face subdued demand across key markets, particularly in Europe and China, along with volatility in energy and raw material prices. Ongoing tensions in West Asia further added to uncertainty around global trade flows, logistics, and commodity markets. Against this backdrop, the Indian chemical industry has demonstrated reasonable resilience, supported by steady domestic demand and several emerging growth opportunities. Trade agreements, including the recently concluded India-UK and India-EU Free Trade Agreements, are expected to improve market access and strengthen the competitiveness of Indian manufacturers. At the same time, the growing preference among global customers for diversified sourcing and reduced dependence on single geographies is creating opportunities for Indian chemical manufacturers with strong compliance standards and operational capabilities. Our business, however, continued to operate in a challenging environment, with pricing pressures from Indian and global competitors impacting the industry.

Speaker #2: Ongoing tensions in West Asia have further added to uncertainty around global trade flows, logistics, and commodity markets. Against this backdrop, the Indian chemical industry has demonstrated reasonable resilience, supported by steady domestic demand and several emerging growth opportunities.

Speaker #2: Trade agreements, including the recently concluded India-UK and India-EU free trade agreements, are expected to improve market access and strengthen the competitiveness of Indian manufacturers.

Speaker #2: At the same time, the growing preference among global customers for diversified sourcing and reduced dependence on single geographies is creating opportunities for Indian chemical manufacturers with strong compliance standards and operational capabilities.

Speaker #2: Our business, however, continued to operate in a challenging environment, with pricing pressures from Indian and global competitors impacting the industry. Despite these challenges, we remained focused on improving productivity, strengthening operational efficiency, and protecting our competitiveness.

Bimal V. Mehta: Despite these challenges, we remain focused on improving productivity, strengthening operational efficiency, and protecting our competitiveness. While near-term uncertainties remain, we believe the industry is gradually moving towards a more favorable and sustainable growth environment. Now coming to the company positioning and core strength. Against the global and the domestic backdrop, Transpek remains well-positioned, supported by its deep expertise in chlorine and sulfur-based chemistries, together with significant work undertaken in other chemistries for diversification. These chemistries require specialized infrastructure, technical expertise, and stringent safety standards, creating significant barriers to entry. This remains a key competitive strength for Transpek and helps differentiate us within the industry. We also continue to receive strong recognition from customers and certification bodies for our commitment to quality, safety, environment stewardship, and sustainable manufacturing practices.

Speaker #2: While near-term uncertainties remain, we believe the industry is gradually moving towards a more favorable and sustainable growth environment. Now, coming to the company's positioning and core strengths—against the global and domestic backdrop, Transpek remains well-positioned, supported by its deep expertise in chlorine and sulfur-based chemistries, together with significant work undertaken in other chemistries for diversification.

Speaker #2: These chemistries require specialized infrastructure, technical expertise, and stringent safety standards, creating significant barriers to entry. This remains a key competitive strength for Transpek and helps differentiate us within the industry.

Speaker #2: We also continue to receive strong recognition from customers and certification bodies for our commitment to quality, safety, environmental stewardship, and sustainable manufacturing practices. Combined with this, the current almost no-debt balance sheet and cash reserves show that the company has now built a strong foundation to grow.

Bimal V. Mehta: Combined with this, the current almost no debt balance sheet and cash reserves, the company has now built a strong foundation to grow. These trends will support new investments being planned without being over-leveraged in terms of the balance sheet. Coming to product development and growth initiatives. A key pillar of our strategy continues to be product diversification and value addition. Alongside strengthening our existing portfolio, we are expanding into newer chemistries beyond Acid Chlorides and Alkyl Chlorides to broaden our product offerings and address evolving customer requirements. During the year, we introduced new Acid Chloride products in smaller volumes, which are expected to be larger volumes in the current and next years. The company continues to work on expanding its product portfolio by adding non-Acid Chlorides and non-Alkyl Chlorides chemistries with a focus on developing innovative, higher value-added products and strengthening its presence across existing customers and new end user markets.

Speaker #2: This strength will support new investments being plumbed, without being over-leveraged in terms of the balance sheet. Coming to product development and growth initiatives, a key pillar of our strategy continues to be product diversification and value addition.

Speaker #2: Alongside strengthening our existing portfolio, we are expanding into newer chemistries beyond acid and alkyl chlorides to broaden our product offerings and address evolving customer requirements.

Speaker #2: During the year, we introduced new acid-chloride products in smaller volumes, which are expected to see larger volumes in the current and next years. The company continues to work on expanding its product portfolio by adding non-acid and non-alkyl chloride chemistries, with a focus on developing innovative, higher value-added products and strengthening its presence across existing customers and new end-user markets.

Speaker #2: I would like to give some more details on this. At present, we are working on two polymers, both of which were developed in our R&D laboratory. We have also done some compounding, which is basically making components out of polymers, where we have also been successful. Testing has also been carried out by independent expert testing agencies like TUV.

Bimal V. Mehta: I would like to give some more details on this. At present, we are working on two polymers, both of which are developed in R&D laboratory. We have also done some compounding, which is basically making a component out of polymers where also we have been successful and test has also been carried out by independent expert testing agencies like TÜV. Our products have proven to be matching the required specification, which is being used globally. These are very high-end polymers, going into mission critical applications. Due to confidentiality requirements, I am not able to name those polymers, but I will just give you some idea as to where they are used. They are used in medical and medical implants, automotive, aerospace components, electrical and electronics, semiconductor, oil and gas. All these places, these polymers are used.

Speaker #2: And our products have proven to match the required specifications and are being used globally. These are very high-end polymers going into mission-critical applications.

Speaker #2: Due to confidentiality requirements, I am not able to name those polymers, but I will just give you some ideas as to where they are used.

Speaker #2: So, they are used in medical and medical implants, automotive, aerospace components, electrical and electronics, semiconductor, oil and gas—all these places these polymers are used.

Speaker #2: There is another polymer which is used in 3D printing filaments, another polymer which is used in hemodialysis membranes, water RO filtration membranes, electronics insulation, and food processing equipment.

Bimal V. Mehta: There is another polymer which is used in 3D printing filaments. Another polymer which is used in hemodialysis membranes, water RO filtration membranes, electronics insulation, and food processing equipment. Some work is being done on polymers and, of course, polymers is not very easy to develop. It's kind of little longer process, but we have a good team, and they have been successful in at least establishing R&D scale products, and now we are working towards kilo scale. Another product area that we have taken up is basically polymer modifiers and polymer additives, because that is also a very, very huge market. There, we are developing three products. One product is almost at pilot stage, and we are supposed to supply required quantity to our customer for their production trial. Once that production validation is done, then ourselves can move into commercial scale.

Speaker #2: So this some work has been is being done in on polymers and of course polymers is not very easy to develop. It's it's kind of little longer process, but we have a good team and they have been successful in at least establishing R&D scale products and now we are working towards kilo scale.

Speaker #2: Another product area that we have taken up is basically polymer modifiers and polymer additives, because that is also a very, very huge market. So there, we are developing three products.

Speaker #2: One product is almost at the pilot stage, and we are supposed to supply the required quantity to our customer for their production trial. So once that production validation is done, then we ourselves can move into commercial scale.

Speaker #2: That product goes in as an additive, as an enhancer. I would rather modify it into polyester and other polymers—I mean, different types of polymers. And another one that we are doing is basically a coating and an added CU modifier, where you can call it an additive.

Bimal V. Mehta: That product goes into as an additive, as an enhancer, or rather modifier into polyester and other polymers, I mean, different types of polymers. Another one that we are doing is basically a coating and adhesive modifier, or you can call it additive. That is a replacement for a chemical product with a product which is having a biological raw material coming from fatty acid or rather, coconut oil and palm oil, and those kind of natural sources. Some of these are being developed for specific customers, and some of these are being developed based on the market size and market potential. Our core portfolio being, of course, not polymers, but monomers, therefore, it's a natural extension. On the other end, we are also working on sulfonation chemistry. Sulfonation or rather using sulfur has been our core strength.

Speaker #2: So that is a replacement for a chemical product with a product which is having biological raw material coming from fatty acid or other sources like coconut oil and palm oil, and those kinds of natural sources.

Speaker #2: So, some of these are being developed for specific customers, and some of these are being developed based on the market size and market potential.

Speaker #2: And our core portfolio being, of course, not polymers but monomers, so therefore it's a natural extension. On the other end, we are also working on sulfonation chemistries.

Speaker #2: Sulfonation, or rather using sulfur, has been our core strength. But now we are going beyond what is typical single-step sulfur use. So, we are working on a couple of complex products—multi-step, complex products.

Bimal V. Mehta: Now we are going beyond what is typical single step sulfur use. We are working on couple of complex products, multi-step complex products, which again, are being used in some of the petroleum and polyester and other types of application. Then, we are also looking at products which are chloro-fluoro compounds. As you know, we are expert in chlorination, so we are adding products that are going to be a combination of two chemistries. Chlorination, which is our expertise, and fluorination, we are already developing expertise. These are all indirect fluorination, so we don't use fluorine as a gas or anything, but we use fluorine compounds to create chloro-fluoro products, which have also good value and good demand in the market. I just wanted to give you a little more details on what is happening. On the other side, we are also building our talent pool.

Speaker #2: These again are being used in some of the petroleum, polyester, and other types of applications. Then we are also looking at products which are chlorofluorocompounds.

Speaker #2: So as you know we are expert in chlorination. So we are adding products that are going to be a combination of two chemistries. So chlorination which is our expertise and fluorination we are already developing expertise this is going these are all indirect fluorination so we don't use fluorine as a gas or anything but we use fluorine compounds.

Speaker #2: To create chlorofluoroproducts, which also have good value and good demand in the market. So this is some— I mean, I just wanted to give you a little more detail on what is happening.

Speaker #2: On the other side, we are also building our talent pool. So, in this financial year, we are going to double our research and development team.

Bimal V. Mehta: In this financial year, we are going to double our research and development team, as well as our infrastructure in research and development. The idea is to speed up product development and bring out products commercially as fast as possible. In this context, we are also setting up a multipurpose pilot plant, the design of which is already done, and now we will start building that plant. It will take another six to seven months for that plant to be ready. But that plant would provide us significant capability to scale up our products in all of these chemistries that I talked about. It's a real multipurpose plant having four streams, and it can carry out different types of reactions. Now, coming to manufacturing and operational update.

Speaker #2: As well as our infrastructure in research and development. The idea is to speed up product development and bring out products commercially as fast as possible.

Speaker #2: In this context, we are also setting up a multi-purpose pilot plant. The design of which is already done, and now we will start building that plant.

Speaker #2: It will take another six to seven months for that plant to be ready. But that plant would provide us significant capability to scale up our products in all of these chemistries that I talked about.

Speaker #2: So it's it's it's it's a real multi-purpose plant having four streams and it can carry out different different different types of reactions. Now coming to manufacturing and operational update.

Speaker #2: Over the years, we have built strong and enduring relationships with our customers and suppliers, supported by our constant focus on quality, reliability, and operational excellence.

Bimal V. Mehta: Over the years, we have built strong and enduring relationship with our customers and suppliers, supported by our constant focus on quality, reliability, and operational excellence. During the quarter, we renewed our Responsible Care certification from the Indian Chemical Council. The certificate is valid for three years, from July 2026 to July 2029. These initiatives reflect our continued commitment to safety, health, and environment, while driving operational efficiency and strengthening our focus on sustainable and responsible manufacturing practices over the long run. End user industries, I already spoke about few of them. In addition to that, our products cater to diversified range of industries including polymers, plasticizers, pharmaceuticals, agrochemicals, dyes, surfactants, and pigments. During the quarter, we also saw an increased contribution from segments such as specialty chemicals, organic peroxides, dyes and surfactants, reflecting the continued progress in diversifying our product portfolio and expanding our presence across end user industries.

Speaker #2: During the quarter, we renewed our Responsible Care certification from the Indian Chemical Council. The certificate is valid for three years, from July 2026 to July 2029.

Speaker #2: These initiatives reflect our continued commitment to safety, health, and environment while driving operational efficiency and strengthening our focus on sustainable and responsible manufacturing practices over the long run.

Speaker #2: End-user industries—I already spoke about a few of them. In addition to that, our products cater to a diversified range of industries including polymers, plasticizers, pharmaceuticals, agrochemicals, dyes, surfactants, and pigments.

Speaker #2: During the quarter, we also saw an increased contribution from segments such as specialty chemicals, organic peroxides, dyes, and surfactants, reflecting the continued progress in diversifying our product portfolio and expanding our presence across end user industries.

Speaker #2: Polymers continue to remain our largest end-user segment, contributing more than 48% of revenues during the quarter. This refers to the application of polymers, not the polymers themselves.

Bimal V. Mehta: Polymers continue to remain our largest end user segment, contributing more than 48% revenues during the quarter. This is application of polymers, not polymers themselves. Right now, we make monomers. So 48% revenue during the quarter. If we compare this with few years back, contribution were as high as 60% to 65%, which has now reduced to 45% to 50% level, following a strategy of having diversified portfolio. Going forward, our product development initiatives are expected to further broaden our presence across industries and applications supporting greater diversification of our revenue base. Way forward, looking forward, going ahead, we remain cautious given the evolving macroeconomic environment, particularly the uncertainty surrounding the West Asia conflict and its potential impact on global demand, supply chains, logistics, and commodity markets. At the same time, we remain focused on executing our long-term growth strategy.

Speaker #2: Right now, we make monomers. So, 48% of revenues during the quarter. If we compare this with a few years back, contributions were as high as 60 to 65%, which has now reduced to the 45 to 50% level.

Speaker #2: Following a strategy of having a diversified portfolio, going forward our product development initiatives are expected to further broaden our presence across industries and applications, supporting greater diversification of our revenue base.

Speaker #2: Way forward, looking ahead, we remain cautious given the evolving macroeconomic environment, particularly the uncertainties surrounding the West Asia conflict and its potential impact on global demand.

Speaker #2: Supply chains, logistics, and commodity markets. At the same time, we remain focused on executing our long-term growth strategy. The company continues to work towards expanding its presence to newer geographies, strengthening customerism, advancing research-led innovation, and broadening its product portfolio.

Bimal V. Mehta: The company continues to work towards expanding its presence to newer geographies, strengthening customer relationships, advancing research-led innovation and broadening its product portfolio. Our medium and long-term strategy, I already spoke about some of the products. So it's same. It's focused on polymers, monomers, additives, enhancers, multi-step sulfonation products, electronics and battery chemicals, and chloro/fluoro intermediates. In all of these, the focus is on value-added complex products. Company is also looking to, or are considering to add another manufacturing site for which options are being explored. The company has recently expressed interest in acquisition of land in Odisha, in a notified zone, which has been approved by the Odisha government. Now they are asking us to give a detailed feasibility report, which we are preparing, and once we also have our internal board review on the feasibility, and then we will submit to the Odisha government.

Speaker #2: Our medium- and long-term strategy—I've already spoken about some of the products. So it's the same: it's focused on polymers, monomers, additives, enhancers, multi-step sulfonation products, electronics and battery chemicals, and chlorofluoro intermediates.

Speaker #2: In all of these, the focus is on value-added, complex products. Companies are also looking to, or are considering, adding another manufacturing site, for which options are being explored. The company has recently expressed interest in the acquisition of land in Odisha, in a notified zone, which has been approved by the Odisha government.

Speaker #2: Now we are they are they are asking us to give a detailed feasibility report which we are preparing and once we also have our internal board review on the feasibility and then we will submit to the Orissa government and if board board approves then we will go forward that acquisition.

Bimal V. Mehta: And if board approves, then we will go for that acquisition. Supported by our technical expertise, strong customer relationships, responsible manufacturing practices, and ongoing initiatives around energy efficiency and cost optimization, we believe we are well positioned to create sustainable long-term value and capitalize on emerging opportunities in the years ahead. Now, coming to our financial performance. As I mentioned earlier, growth across the chemical industry has remained soft, and Transpek has not been an exception. Against the backdrop of aggressive pricing, oversupply, and subdued demand in export markets, your company has delivered a steady performance. Total revenue for Q1 FY27 stood at INR 155.1 crores. While this is 6.5% lower than the corresponding quarter last year, revenue contribution from polymers stood at 48.7%, followed by specialty chemicals at 22.5%, pharma at 10.1%, and others at 18.7%. International business accounted for 84.4% of revenue.

Speaker #2: Supported by our technical expertise, strong customer relationships, responsible manufacturing practices, and ongoing initiatives around energy efficiency and cost optimization, we believe we are well positioned to create sustainable, long-term value and capitalize on emerging opportunities in the years ahead.

Speaker #2: Now, coming to our financial performance—as I mentioned earlier, growth across the chemical industry has remained soft, and Transpek has not been an exception.

Speaker #2: Against a backdrop of aggressive pricing, oversupply, and subdued demand in export markets, your company has delivered a steady performance. Total revenue for Q1 FY27 stood at ₹1,515.51 crore. While this is 6.5% lower than the corresponding quarter last year,

Speaker #2: Revenue contribution from polymers stood at 48.7%, followed by specialty chemicals at 22.5%, pharma at 10.1%, and others at 18.7%. International business accounted for 84.4% of revenue.

Speaker #2: North America continues to lead our region-wise mix, contributing more than 52%. EBITDA for Q1 FY27 stood at ₹24.1 crore, lower by 32.4% year on year.

Bimal V. Mehta: North America continues to lead our region-wise mix and contributing more than 52%. EBITDA for Q1 FY27 stood at INR 24.1 crores, lower by 32.4% year on year. EBITDA margin for the quarter stood at 15.6%. Profit after tax for the quarter came in at INR 8.9 crores. As of June 2026, we continue to remain a net debt free company with a strong balance sheet supported by healthy cash flows and a healthy cash balance. Now some of you have also questions on the DuPont, Arclin, and long-term contract and all that. I would like to address it right here. So the contract with DuPont has already been assigned to Arclin, and now Arclin is fully into it and the supplies are going as per what has been going on for last few years.

Speaker #2: EBITDA margin for the quarter stood at 15.6%. Profit after tax for the quarter came in at ₹8.9 crore. As of June 2026, we continue to remain a net debt-free company with a strong balance sheet, supported by healthy cash flows and a healthy cash balance.

Speaker #2: Now, some of you also have questions on the DuPont Arclin and the long-term contract and all that. I would like to address it right here.

Speaker #2: So, the contract with DuPont has already been assigned to Arclin, and now Arclin is fully into it. The supplies are going as per what has been going on for the last few years.

Speaker #2: I mean there is no change in terms of their demand and their orders to Transpect. We will be restarting or rather we will be starting our discussion on the renewal of the contract by last quarter of this year between last quarter of this year calendar year I'm talking about and first quarter of the next calendar year.

Bimal V. Mehta: I mean there is no change in terms of their demand and their orders to Transpek. We will be restarting or rather we will be starting our discussion on the renewal of the contract by last quarter of this year, between last quarter of this year, per calendar year I am talking about, and first quarter of the next calendar year. And there is no difference in terms of any terms or conditions that were there in DuPont contract. It is assigned fully in the same letter and spirit as it was with DuPont. So, we are very strongly connected, or rather we are in discussion and contact with Arclin as we were with DuPont. And we are having reasonable visibility in terms of orders and order book and et cetera. So with this, I conclude the speech and now we open the floor for question and answers.

Speaker #2: So, and there is no difference in terms of any terms or conditions that were there in the DuPont contract. It is assigned fully in the same letter and spirit as it was with DuPont.

Speaker #2: So, I mean, we are very strongly—in terms of, I mean—we are very strongly connected, or rather, we are in discussion and contact with Arclin, as we were with DuPont.

Speaker #2: And we are having reasonable visibility in terms of orders and order book, etc. So with this, I conclude the speech, and now we open the floor for questions and answers.

Speaker #1: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, you may press star and one on your touch-tone telephone.

Operator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, you may press star and one on your touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Keshav Garg from Counter Cyclical PMS. Please go ahead.

Speaker #1: If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use a handset while asking a question.

Speaker #1: Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from Keshav Garg of Counter Cyclical PMS.

Speaker #1: Please go ahead.

Speaker #2: Sir, thank you for this opportunity. Sir, I am a longstanding shareholder, and I am very disappointed. Sir, over the years you have been telling us that we will grow a minimum of 10 to 12% CAGR. Now, sir, I cannot see that growth—from FY19, when we did ₹595 crore, till FY26, where we did ₹621 crore.

Keshav Garg: Sir, thank you for this opportunity. Sir, I am a longstanding shareholder, and I am very disappointed. Sir, over the years you have been telling us that we will grow minimum 10% to 12% CAGR. Now, sir, I cannot see that growth from FY19 when we did INR 595 crore till FY26 where we did INR 621 crore. So where is the growth? In FY19 we did INR 117 crore EBITDA. Last year we did INR 80 crore EBITDA. Sir, I do not know what really is happening to this company. Sir, if there are no plans, then at least do a share buyback and return the money to the shareholders.

Speaker #2: So where is the growth? In FY19, we did ₹117 crore EBITDA. Last year, we did ₹80 crore EBITDA, sir, so I don’t know what really is happening to this company. And sir, if there are no plans, then at least do a share buyback and return the money to the shareholders.

Speaker #3: Yes. So I already explained about growth, and also, you are a very seasoned shareholder, so you very well know that the chemical industry—it's not only Transpek, the chemical industry in general—in the last four or five years has undergone all kinds of ups and downs.

Bimal V. Mehta: Yes. I already explained what we are doing in terms of growth. You are a very seasoned shareholder, so you very well know that chemical industry, it is not only Transpek, chemical industry in general, in last four or five years has undergone all kinds of ups and downs. In business naturally uncertainties come up. You plan something and it does not happen. As I explained that we have been steadily working on our growth potential, and now we are at a stage where we do not have to worry about our balance sheet being over-leveraged in terms of taking funding for new projects. We also have clear visibility in terms of what products we are working on, what our customers are asking. The growth, estimates, that is why we always say these are all estimates in the beginning of the call.

Speaker #3: So, you know, in business, naturally, uncertainty comes up. You plan something and it doesn't happen, but as I explained, we have been steadily working on our growth potential, and now we are at a stage where we do not have to worry about our balance sheet being over-leveraged in terms of, you know, taking funding for new projects. We also have clear visibility in terms of what products we are working on and what our customers are asking.

Speaker #3: So, the growth—I mean, estimates—you know, that's why we always say these are all estimates at the beginning of the call. So, estimates are always estimates.

Bimal V. Mehta: Estimates are always estimates. You cannot say that it is not written in stone that whatever is said by management will always happen because business goes through cycles, business has undergone so many ups and downs not only across many industries, but chemical industries especially.

Speaker #3: I mean, you cannot say that—it is not written in stone that, you know, whatever is said by management will always happen, because business goes through cycles.

Speaker #3: Business has undergone so many ups and downs, not only across many industries, but especially in the chemical industry.

Speaker #2: Sir so sir I appreciate your point. Sir so now going forward sir is there any visibility for the current year sir how things look and how much can we grow going forward or what is at least the the there is some aspiration that the management has or some internal targets?

Keshav Garg: Sir, I appreciate your point. Sir, now going forward, sir, is there any visibility for the current year, sir, how things look and how much can we grow going forward, or what is at least there is some aspiration that the management has or some internal targets?

Speaker #3: Yes, yes. So this year, we are expecting to be at least 15% to 20% higher than what we were last year in terms of our revenue.

Bimal V. Mehta: Yeah. This year we are expecting to be at least 15% to 20% higher than what we were in the last year in terms of our revenue. You will probably see that being, you will see probably in this current quarter once the results are announced. We have added some Acid Chlorides, which are high volume domestic market. For example, last year they gave us almost about INR 4 crores, and this year it is expected to give revenue of about almost INR 15 crores. This is one product, but there are other products like that. We are expecting at least 15% revenue growth this year. In terms of aspirations, we are looking at, we have also finalized our strategy for next five years and the product, or rather the application profile or product profile that I talked in my opening speech.

Speaker #3: You will probably see that being, you know—I mean, you will probably see that in this current quarter once the results are announced. So, because we have added some asset chlorides, which are high volume for the domestic market—for example, last year they gave us almost about ₹4 crore, and this year it is expected to give revenue of about almost ₹15 crore.

Speaker #3: So there are this is one product but there are other products like that. So we are expecting at least 15% revenue growth this year in in terms of aspirations we are looking at we have also finalized our strategy for next five years and the product rather the application profile or product profile that I talked to talked in my opening speech those are our core areas and we are looking to double our size and business in next five years.

Bimal V. Mehta: Those are our core areas, and we are looking to double our size and business in next five years.

Speaker #2: Sir that is really assuring sir sir now sir my question is regarding the Arcelor and DuPont the long term agreement which is coming for renewal next year sir now assuming the worst case scenario wherein the contract expires and is not renewed sir then do we have any visibility that sir will our we will will we take a huge hit or we can find alternatives where we can basically redirect the sales and they'll not be much damaged?

Keshav Garg: Sir, that is really assuring. Sir, now my question is regarding the Arclin and DuPont, the long-term agreement, which is coming for renewal next year. Sir, now assuming the worst-case scenario wherein the contract expires and is not renewed, sir, then do we have any visibility that, sir, will we take a huge hit or we can find alternatives where we can basically redirect the sales and there will not be much damage?

Speaker #3: See, the size of the requirement that Arclin has is not something that can be replaced overnight or, you know, with any other customer. Because there are multiple customers—for example, in Korea, there are quite a few customers.

Bimal V. Mehta: See, the size of the requirement that Arclin has is not something that can be replaced overnight or with any other customer. There are multiple customers. For example, in Korea, there are quite a few customers. There are a couple of customers in Japan. There are few manufacturers of aramid in China. But all of them have their own limited capacities as well as their own supply chain also in place, which of course includes Transpek to some extent. Now, assuming that the contract is not renewed, naturally that is why we are working on diversifying our portfolio of products. Next year when the renewal comes and if it does not get renewed, naturally that would be a significant blow in terms of volume and in terms of margins.

Speaker #3: There are a couple of customers in Japan. There are a few manufacturers of aramid in China, but all of them have their own limited capacities as well as their own supply chain, which of course includes Transpek to some extent.

Speaker #3: Now, assuming that the contract is not renewed—that is why we are working on diversifying our portfolio products. Next year, when the renewal comes, and if it doesn't get renewed, naturally that would be a significant blow in terms of volume and in terms of margins.

Speaker #3: And it may take some time to recover out of that, but we are already having certain plans. As I said, diversifying the portfolio, working with other customers where we can probably, gradually—it may not happen overnight—but gradually we can increase the volume.

Bimal V. Mehta: And it may take some time to recover out of that, but we are already having certain plans. As I said, diversifying the portfolio, working with other customers where we can probably gradually, it may not happen overnight, but gradually we can increase the volume. What you just mentioned, probably we are more mindful of this fact than anybody else that we need to really manage this risk. As of now, we do not see any reason whatsoever why the contract should not be renewed. Transpek has been a consistent nine-year supplier now, not a single kilo even rejected by the customer in terms of quality. Not a single delivery has been missed despite all kind of issues like Red Sea crisis, Houthi crisis, all those things where logistics could have been significant challenge.

Speaker #3: So, as you just mentioned, we are probably more mindful of this fact than anybody else—that we need to really manage this risk. And as of now, we do not see any reason whatsoever why the contract should not be renewed.

Speaker #3: I mean Transpect has been has been a consistent 10 year 9 year supplier now without a single not a single kilo even rejected by the customer in terms of quality not a single delivery has been missed despite all kind of issues like red sea crisis who is crisis all all all those things where logistics could have been significant challenge and we rotate almost 300 350 maybe 400 ISO tanks just for DuPont.

Bimal V. Mehta: We rotate almost 300, 350, maybe 400 ISO tanks just for DuPont, and not a single delivery has failed. There are certain inherent strengths that Transpek enjoys. Therefore we do not see, but we are preparing for the worst case scenario. Like everything in life, you have to prepare for worst case scenario, which we are preparing. We are fully mindful and aware of this, and we are preparing for that.

Speaker #3: And not a single delivery has failed. So there are certain inherent strengths that Transpek enjoys, and therefore we do not see—but we are preparing for the worst-case scenario. Like everything in life, you have to prepare for the worst-case scenario, which we are preparing for.

Speaker #3: We are fully mindful and aware of this, and we are preparing for that.

Speaker #2: Understood, sir. Sir, also, we have a ₹300 crore investment in Celox, which is like 45–50% of our total market cap and net worth. Sir, so—and this investment was increasing in value, but in the past two years the value has actually declined.

Keshav Garg: Understood, sir. Sir, also we have a INR 300 crore investment in Silox, which is like 45%-50% of our total market cap and net worth. Sir, this investment was increasing in value, but in the past two years, the value is actually declining. Even the dividend that we have received from there, that has also declined marginally. Sir, since we are now embarking on a greenfield CapEx in Odisha, or at least we are planning. Sir, unless this investment was increasing, there was no problem in holding. But now if it is not increasing or rather decreasing, then sir, does it not make sense to really monetize this investment and replow the proceed in the growth of the business?

Speaker #2: And even the dividend that we have received from there has also declined marginally. So, sir, since we are now embarking on a greenfield capex in Orissa, or at least we are planning, sir, unless this investment was increasing there was no problem in holding, but now if it is not increasing or rather decreasing, then, sir, does it not make sense to really monetize this investment and deploy the proceeds in the growth of the business?

Speaker #3: Yes, sir. G, as you said, you have been an investor for so many years and I have already explained this during AGMs, during concalls, every time. This is not a liquid investment.

Bimal V. Mehta: Yes, Shailesh, you are already, as you said, you have been an investor for so many years. I have already explained this during AGMs, during con calls, every time, this is not a liquid investment. This investment has a history behind it. When Transpek in 2000 was separated into two parts, one part was sold to a group called Prayon, which is Silox. At that time, we continued with this investment as part of the shareholders' agreement. Then over the years, as that company grew, this investment is being valued at much higher value than what was originally there. It is not something that I can encash right away. It is not liquid. As you mentioned, they have some minor dividend plus and minus that has happened because they have their own growth plans and they are investing into future assets and all that.

Speaker #3: This investment has a history behind it. When Transpek, in 2000, was separated into two parts, one part was sold to a group called Tryon, which is Celox. At that time, we continued with this investment as part of the shareholders' agreement.

Speaker #3: And then, over the years, as that company grew, this investment has been valued at a much higher value than what was originally there. It is not something that I can encash right away.

Speaker #3: It is not liquid. They have, as you mentioned, some minor dividend plus and minus that has happened because they have their own growth plans and they are investing into future assets and all that.

Speaker #3: But if it would have been so easy that you know I could have encashed that then I why I would be sitting in that investment which is say for example today as you mentioned 300 crore investment and if it gives me 5 to 7 crore anywhere between 5 to 7 crore of dividend it's it's nowhere near any even lowest return of I mean rate of return that you can get from anywhere.

Bimal V. Mehta: But if it would have been so easy that I could have encashed that, then why I would be sitting in that investment, which is, say, for example, today, as you mentioned, INR 300 crore investment, and if it gives me INR 5 to 7 crore, anywhere between INR 5 to 7 crore of dividend, it's nowhere near any even lowest rate of return that you can get from anywhere. So company also would not like to sit on that, but this is something that is not within our control.

Speaker #3: So company also would not like to sit on that but this is something that is not beyond I mean that is not within our control.

Speaker #2: Understood, sir. And sir, lastly, in the annual report it's mentioned that now we have some advantage in US tariffs versus other countries, so if you could quantify that, what exactly is the tariff on our products today in the US, and versus, let's say, China or Japan—what are they paying? And sir, is there any real advantage on that count?

Keshav Garg: Understood, sir. And sir, lastly, sir, in the annual report, it's mentioned that now we have some advantage in US tariff versus the other countries. So if you could quantify that, what exactly is the tariff on our products today in the US and versus, let's say, China or Japan, what are they paying? And sir, is there any real advantage on that count?

Bimal V. Mehta: One moment. Actually, there is no special tariff on Transpek products. What is the normal tariff? I think it is 18%, if I remember correctly. That is the tariff that Transpek products also have. So there is no specific advantage in terms of that, but I'll. One moment. So basically, it's a general statement in the annual report that US has levied higher tariff on many other countries. Therefore, India is at an advantage. So that's a generic statement. But more importantly, whatever we are supplying, we are supplying at normal tariff. And to some extent, our customers are exporting the end product, so they are getting duty drawback.

Speaker #3: Hey, one moment. Actually, there is no special tariff on Transpek products. What is the normal tariff? I think it is 18%, if I remember correctly.

Speaker #3: That is the tariff that Transpect products also have. So there is no specific advantage in terms of that but one moment so basically it's a general statement that in the in the annual report that US has levied higher tariff in many other countries on on many other countries therefore India is at an advantage.

Speaker #3: So, that's a generic statement, but more importantly, whatever we are supplying, we are supplying at normal tariff, and to some extent, our customers are exporting the end product, so they are getting duty drawback.

Speaker #3: So, if you would have seen during when we were imposed with much higher tariff for a short period of time, at that time also Transpek supplies did not suffer at all, because our customers were, one, they wanted material, and secondly, they were getting duty drawback as per the US system.

Bimal V. Mehta: If you would have seen during when we were imposed with much higher tariff for a short period of time, at that time also, Transpek supplies did not suffer at all because our customers were, one, they wanted material, and secondly, they were getting duty drawback as per the US system from the duty that they were paying. And then, of course, as you know now, all those duties were refunded also.

Speaker #3: From the duty that they were paying, and then of course, as you know, now all those duties were refunded also. So,

Speaker #2: Sir, thank you very much, sir. Lastly, sir, just a suggestion. Sir, for the first time in my memory, the stock is trading below net worth. And sir, now SEBI has permanently permitted open market buyback, and sir, now the company doesn't have to pay tax also on share buyback amount, which earlier used to be 23–24%.

Keshav Garg: Sir, thank you very much. Sir, lastly, just a suggestion. Sir, for the first time in my memory, the stock is trading below net worth. Sir, now SEBI has permitted open market buyback. Sir, now company doesn't have to pay tax also on share buyback amount, which earlier used to be 23%, 24%. Sir, so we can at least do a small open market buyback. Actually, the net worth per share will increase after doing a share buyback at this price. Sir, so kindly consider that humble suggestion. Thank you very much.

Speaker #2: Sir, so we can at least do a small open market buyback, and actually, the net worth per share will increase after doing a share buyback at this price.

Speaker #2: Sir, so kindly consider that humble suggestion. Thank you very much, sir.

Speaker #3: I will inform the board about your suggestion.

Bimal V. Mehta: I will inform the board about your suggestion.

Speaker #2: Thank you sir. Thank you.

Keshav Garg: Thank you, sir.

Operator: Thank you. Next question is from the line of Sunil Kothari from Unique PMS. Please go ahead.

Speaker #1: Thank you. The next question is from the line of Sunil Kothari from Unique BMS. Please go ahead.

Speaker #4: Thank you, Biman bhai, and thanks a lot for explaining a lot about the products and possibilities. Thanks for that. My question is, normally we are a—not very, but reasonably—very conservative management, and now we have capacity also.

Sunil Kothari: Thank you, Bimalbhai, and thanks a lot for explaining a lot about the products and possibility. Thanks for that.

Bimal V. Mehta: Yes.

Sunil Kothari: Bhumibhai, my question is, normally we are reasonably very conservative management, and now we have capacity also. In past, in many call and everywhere you explained we have capability to produce on annual level what? 9 unit crore. Currently we are in the range of 600 something, plus, minus. Now we are expanding, we are planning to another site. One more thing is, with your confidence, I see no chance of getting this long-term contract getting postponed or canceled. But that sword is yet hanging. You are now expanding this capacity. You want to have new Odisha site. Is there anything which you feel there is a possibility of any another large contract possibilities? If you want to say a little bit more, how and why, with this much capacity available with us, with job work capacity also we have contractually.

Speaker #4: I as in past you in many call and everywhere you explained we have capability to do produce or generate revenue what 900 crore. Currently we are in the range of 600 something plus minus and now we are expanding we are planning to another site and one more thing is we have I I I'm with your confidence I see no chance of getting this long term contract getting postponed canceled but that so what is we are thinking and you are now expanding this capacity you want to have new Orissa site is there anything which you feel there is a possibility of any another large contract possibilities if you want to say a little bit more how and why with this much capacity available with us with Jobber capacity also we have contractual so if a little bit explain will be really helpful.

Sunil Kothari: If you little bit explain, it will be really helpful.

Speaker #3: Yes, yes, so basically there are two or three things. I think you have asked a very good question, and it would be helpful to others also once I provide the information.

Bimal V. Mehta: Yes. Basically, there are two, three things that I think you have asked very good question, and it would be helpful to others also once I provide the information. See, especially as I have already mentioned earlier during our discussion calls, that the site where we are, we are currently under a kind of limitation in terms of expansion.

Speaker #3: See, especially as I have already mentioned earlier during our discussion calls, at the site where we are, we are currently under a kind of limitation in terms of expansion.

Sunil Kothari: True.

Speaker #3: So so so we cannot we cannot get permission for expansion at Acalbara where our factory is situated. Unfortunately we have been trying with government for almost now nine years sorry ten this is eleventh year but nothing is moving and to be very honest it seems that government is not very keen on chemical industry in this area and even in the edge I mean as of today it it takes about one and a half years to get permissions and everything despite it being a notified area and it's it has become very crowded.

Bimal V. Mehta: We cannot get permission for expansion at Ekalbara, where our factory is situated. Unfortunately, we have been trying with government for almost now 9 years. Sorry, 10. This is 11th year, but nothing is moving. To be very honest, it seems that government is not very keen on chemical industry in this area. Even in Dahej, as of today, it takes about one and a half years to get permissions and everything, despite it being a notified area, and it has become very crowded. In fact, I do not know whether you are aware, but in Dahej, almost 30, 40 small, medium-sized companies are for sale because they are not able to sustain the cost of managing business and et cetera. We looked at Dahej also because that makes logistically a better sense for us for expansion.

Speaker #3: In fact, I don't know whether you are aware, but in the edge, almost 30 to 40 small- to medium-sized companies are for sale, because they are not able to sustain the cost of managing business and etcetera.

Speaker #3: So we looked at the edge also because that makes, logistically, better sense for us for expansion. Now, the question is why we are not able to utilize the capacity fully at this point in time.

Bimal V. Mehta: Now, the question is that why we are not able to utilize the capacity fully at this point in time. Because our capacities are product specific, so it is not that one plant generates or rather one plant produces three or four or five products. Most of the plants, yes, one plant may have three products, but then for each product there is a separate stream. It is not the same stream. It is not like pharma business where you take one campaign in a batch setup, and then you clean it up, and then you take another campaign in the same batch setup. So same plant will be running fully at largely a very high capacity.

Speaker #3: Now, because our capacities are product-specific, it is not that one plant generates or rather one plant produces three or four or five products. Most of the plants, yes, one plant may have three products, but then for each product there is a separate stream; it is not the same stream. It is not like the pharma business, where you take one campaign in a batch setup, and then you clean it up and take another campaign in the same batch setup.

Speaker #3: So, the same plant will be running fully for the whole year at a very high capacity. So, what happens typically is that, whatever our permission levels are, even if we are selling that full—or rather, making that fully and then selling that fully utilized permission levels—the capacity that we have is higher than that, because we have to have a mix of products.

Bimal V. Mehta: What happens typically is that whatever our permission levels are, even if we are selling that full or rather making that fully and then selling that fully utilized permission levels, the capacity that we have is higher than that because we have to have a mix of products. So sometimes customer may ask for product A, for which we have capacity of, say, 1,200 a year, so 100 a month.

Speaker #3: So sometimes a customer may ask for Product A, for which we have a capacity of, say, 1,200 a year—so 100 a month. And for another one, we have 5,000 a year.

Bimal V. Mehta: Another one, we have 5,000 a year. Another one, we have 3,000 a year, like that.

Speaker #3: Another one, we have 3,000 a year like that. So what happens is that when you put all this as a total, this may be at least 20 to 30 percent higher than our permission level.

Bimal V. Mehta: What happens is that when you put all this as a total, this may be at least 20% to 30% higher than our permission level.

Speaker #3: So, whatever we utilize—even if we are utilizing our 100 percent permission level—you will find that our capacity utilization is around 70 to 75 percent.

Bimal V. Mehta: Whatever we utilize, even if we are utilizing our 100% permission level, you will find that our capacity utilization is around 70% to 75%, or in best case scenario, about 80% to 82%. That is because of the product mix and the value of the sales. This is something which is a tricky situation, and we cannot now expand here within job work sites also because out of the three job work sites, two are in the same area where we are, and so the same restrictions apply to them. We have been looking at multiple options, and one of the options that we figured out was Odisha. Then we studied it more, and we felt that a chemical ecosystem is gradually developing there. For example, where we are looking at, SRF Limited is coming, UPL Limited is coming, and a few other companies. Deepak Nitrite's plant has already started.

Speaker #3: Or in the best case scenario, about 80 to 82 percent. That is because of the product mix and the value of the sales. So this is something which is a tricky situation, and we cannot now expand here within Jobber sites also, because Jobber sites are also—out of the three Jobber sites, two are in the same area.

Speaker #3: Where we are, and so the same restrictions apply to them. So we have been looking at multiple options, and one of the options that we figured out was Orissa. Then we studied it more, and we felt that the chemical ecosystem is gradually developing there.

Speaker #3: For example, we are looking at SRF coming, UPL is coming, and a few other companies. Deepak Fertilizers' plant has already started, so nearby there are a couple of others—like there is a caustic chlorine plant of a very large company.

Bimal V. Mehta: Nearby, there are a couple of other, like there is a caustic chlorine plant of a very large company. Then, of course, the government is extremely supportive, and now talent is also available to run the business and everything. Infrastructure is fabulous. I mean, very good infrastructure in terms of road and ports and everything. That is what we looked at. Because we need, for all these new products that I just mentioned, we will need new facilities.

Speaker #3: So, and then of course, the government is extremely supportive, and now talent is also available to run the business and everything. Infrastructure is fabulous—I mean, very, very good infrastructure.

Speaker #3: In terms of roads and ports and everything, that is what we looked at, because for all these new products that I just mentioned, we will need new facilities.

Speaker #3: Now for this new facilities we otherwise it will be like a we will be in a chicken and egg situation that we we may right now we we don't have product and we do not have permissions.

Sunil Kothari: True.

Bimal V. Mehta: Now, for these new facilities, otherwise, it will be like we will be in a chicken and egg situation. Right now, we do not have product, and we do not have permissions. Tomorrow, we will have product, but we will still not have permissions.

Speaker #3: Tomorrow we will have product, but we will still not have permissions. So we will be with, you know, old shareholders like you, and new shareholders. We will be having the same discussion—that, no, no growth is not coming and all that.

Sunil Kothari: Right.

Bimal V. Mehta: So we will be with old shareholders like you and new shareholders, we will be having the same discussion that, no, growth is not coming and all that. We have taken a very deliberate decision that we need to really be a little more aggressive. I mean, the conservative that you mentioned in the beginning, I fully agree that we have been conservative, but I think now there is a change in mindset of the board. We have a new board, I mean, about 1 and a half, 2 years back, as you would have probably seen from the reports. There is a very strong push from the board, support from the board for going aggressive in terms of our growth and investing significantly into new products. That's what we are doing, and therefore, the previous shareholder mentioned about buyback, but it is not the right policy.

Speaker #3: So, we have taken a very deliberate decision that we need to really be a little more aggressive. I mean, the conservative approach that you mentioned in the beginning— I fully agree that we have been conservative. But I think now there is a change in the mindset of the Board.

Speaker #3: We have a new board—I mean, about one and a half to two years back, as you would have probably seen from the reports. There is a very strong push from the board.

Speaker #3: Support from the Board for going aggressive, in terms of our growth and investing, you know, significantly into new products. So that's what we are doing. Therefore, I mean, the previous shareholder mentioned about buyback, but it is not the right policy.

Speaker #3: I mean, we would prefer to invest that money into generating returns. So that's what we are looking at. And once we— I mean, we know what we plan to do in Orissa, and what kind of products we are looking at, what kind of setup we are going to do.

Bimal V. Mehta: I mean, we would prefer to invest that money into generating returns. That's what we are looking at. And we know what we plan to do in Odisha and what kind of products we are looking at, what kind of setup we are going to do. We are also, probably very soon you will hear from us that now we are starting on a totally new product at a commercial stage and all that. So there are a lot of things where we are becoming really aggressive. As I mentioned in my opening speech, that we are doubling the size of our R&D facility as well as the talent pool.

Speaker #3: We are also, probably very soon, you will hear from us that now we are starting on a totally new product at a commercial stage and all that.

Speaker #3: So, there are a lot of things where we are becoming really aggressive. As I mentioned in my opening speech, we are doubling the size of our R&D facility as well as the talent pool.

Speaker #3: So that's where also we are expediting our product development process. And fortunately, Transpek has one very good benefit, or rather advantage, that we don't have to convince customers to work with us.

Bimal V. Mehta: That's where also we are expediting our product development process. And fortunately, Transpek has one very good benefit or rather advantage that we don't have to convince customers to work with us.

Speaker #3: Customers want that Transpek supports them, Transpek supplies them, because of our quality, delivery, and commitment history. So, yes, this is very, very, very helpful.

Bimal V. Mehta: Customers want that Transpek supports them, Transpek supplies them because of our quality delivery and commitment history.

Bimal V. Mehta: This is the

Sunil Kothari: Yeah. No, very helpful, Abir bhai. So basically, what you are mentioning is with the now already from kilo lab to higher side, from pilot plant to testing, all this will require new facility, new capacity.

Speaker #3: So basically, what you are mentioning is, with the now already from kilolab to Hyde Side, from pilot plant to testing, all this will require new facility, new capacity. And existing capacity can make us reach whatever numbers you, in the past, you mentioned that is there.

Bimal V. Mehta: Exactly.

Sunil Kothari: Right. And existing capacity can make us to reach whatever numbers in the past you mentioned, that is there.

Speaker #3: Yeah, yeah, that still can be possible, but when we have a mix—which is, you know, the best mix. Also, you see, also what has happened, Sunil bhai, is that over the last few years there have been significant competitive pressures.

Bimal V. Mehta: Yeah. That still can be possible, but when we have a mix, which is the best mix.

Sunil Kothari: Right. True.

Bimal V. Mehta: Also, you see, what has happened, Sunil bhai, that over last few years, there have been significant competitive pressures, and that has resulted in some price erosion in some of the products.

Speaker #3: And that has resulted in some price erosion in some of the products. And naturally, even if your quantity or volume may remain the same, or may not go down as much, the sales value in terms of value would definitely be seen a little lower than what it would have been.

Bimal V. Mehta: And naturally, even if your quantity volume may remain same or may not go down as much, the sales value in terms of value would definitely be seen a little lower than what it would have been seen. For example, as you know, DuPont contract is a passthrough contract in terms of raw material and other cost. So there can be ups and downs where raw material prices go up, then our revenue or rather our price will also go up, and revenue you will see little higher. That's why we also advise, don't look at quarter to quarter. When the raw material prices go down, then the price that we charge to our customer also will go down because of the formula-driven pricing in couple of cases, especially DuPont and one other customer. So that also affects the overall sales value.

Speaker #3: There are, for example, as you know, DuPont contract is a pass-through contract in terms of raw material and other costs. So there can be ups and downs where, you know, raw material prices go up, then our revenue or rather our price will also go up, and revenue will see a little higher.

Speaker #3: That's why we also advised, don't look at quarter to quarter. And when the raw material prices go down, then the price that we charge to our customer also will go down because of the formula-driven pricing in a couple of cases.

Speaker #3: Especially DuPont and one other customer. So that also affects the overall sales value. But moving forward, as I said, we have—because we also wanted to make sure that we do not let our asset chloride capacity remain idle.

Bimal V. Mehta: But moving forward, as I said, because we also wanted to make sure that we do not let our Acid Chlorides capacity remain idle, so we are adding Acid Chlorides, one we added, which goes into agrochemicals and in large volumes. As I mentioned, last year we did INR 4 crore. We are looking at almost INR 15 crore worth of sales from that one product this year.

Speaker #3: So, we are heading asset chlorides. One we added, which goes into agrochemicals and in large volumes. So, as I mentioned, last year we did 4 crores.

Speaker #3: We are looking at almost ₹15 crore worth of sales from that one product this year. So, in that way, we are trying to utilize the maximum of our capacity and stay within the permitted limit.

Bimal V. Mehta: So that way, we are trying to utilize maximum of our capacity and within the permission limit. This quarter, as we speak, we are looking at almost full capacity utilization, full permission utilization, 100% at all three. So three job work and Transpek sites, all four sites.

Speaker #3: This quarter as we speak we are looking at almost full capacity utilization. Full permission utilization. Hundred percent at all three so two job rather three job work and Transpek sites.

Speaker #3: All four sites. Sir, last question—we've been conservatively always informed about the possibilities of what can go wrong. Is there anything you would like to think positive about, or I'm not saying positively, but any possibility, with your fifty-year track record, your ten-year uninterrupted supply to DuPont, and now a new possibility of getting a sizable, good opportunity from those type of customers?

Sunil Kothari: Mm-hmm. Wow. Sir, last question.

Bimal V. Mehta: Yes.

Sunil Kothari: We, being conservative always, inform the possibilities of what can go wrong. Anything you would like to think positive, or I am not saying positively, but any possibility with your 50-year track record, your 10-year interested applied to DuPont and now new customer, possibility of getting a sizable good opportunity from those type of customers?

Speaker #3: We are working with, you know, about two customers on the same line for quite some time. I mean, I would not say it is as large as DuPont.

Bimal V. Mehta: We are working with about two customers on the same line for quite some time.

Bimal V. Mehta: Discussion. I would not say it is as large as DuPont, but a significant size of contract. Unfortunately, what is happening, Sunil Kothari, is that everybody has turned so cautious.

Speaker #3: But a significant size of contract. Unfortunately, what is happening, Sunil bhai, is that everybody has turned so cautious. In fact, you would have also seen the cancellation of some contracts with the large Indian chemical companies.

Bimal V. Mehta: In fact, you would have seen also cancellation of some contracts with large Indian chemical companies. I am sure you are aware. I cannot take name. The discussion continues, but decisions are not being made because every time, a point comes where some decision is supposed to be made, things happen where everybody says, "No, no, it is very volatile. Let us wait.

Speaker #3: I'm sure you are aware, I cannot take names, but so the discussion continues. But decisions are not being made because every time, you know, a point comes where some decision is supposed to be made, things happen where everybody says, 'No, no, it's very volatile. Let us wait.'

Speaker #3: So that's where these things are stuck up, and naturally, as Transpek, we cannot wait for that. That's why we are looking at multiple products, especially products which are higher value in terms of per kg price, and of course, higher realization in terms of margin.

Bimal V. Mehta: That is where these things are stuck up. Naturally, as Transpek, we cannot wait for that. That is why we are looking at multiple products, especially products which are higher value in terms of per kg price and of course, higher realization in terms of margin. That is why we are aggressively now looking at developing multiple products. While we continue to have that discussion on contracts, if it happens, great. It would be something that would definitely speed up the growth process.

Speaker #3: So that's why we are now aggressively looking at developing multiple products, and while we continue to have that discussion on contracts, if it happens, great. It would be something that would definitely speed up the growth process.

Speaker #3: But at the same time, we need to do whatever we can organically in terms of the product profile. Thank you, Sunil bhai.

Bimal V. Mehta: But at the same time, we need to do whatever organically we can do in terms of product profiles.

Sunil Kothari: Thank you, Dhundai. Lots of clarity and lots of good answers. Thank you.

Speaker #3: Lots of clarity and lots of good research. Thank you, thank you, thank you, Sunil bhai. Thank you. Next question is from the line of Samarth Singh from TPF Capital.

Bimal V. Mehta: Thank you, Sunil.

Operator: Thank you. Next question is from the line of Samad Singh from TPF Capital. Please go ahead.

Speaker #3: Please go ahead. Yeah, good afternoon, sir. Thank you for the opportunity. Good afternoon. My first question is just to follow up from the previous speaker.

Samad Singh: Yeah, good afternoon, sir. Thank you for the opportunity. Good afternoon. First question was just a follow-up from the previous speaker. Our philosophy in the past has been that we did not want to commit to any CapEx until we sort of had complete customer offtake or demand visibility. Are you saying now that philosophy has changed and we are putting up CapEx ahead of demand? Or are you saying that we see the demand coming through and that's why we are going ahead and doing, we have got this new call for UI?

Samad Singh: Yeah, good afternoon, sir. Thank you for the opportunity.

Bimal V. Mehta: Good afternoon.

Samad Singh: First question was just a follow-up from the previous speaker. Our philosophy in the past has been that we did not want to commit to any CapEx until we sort of had complete customer offtake or demand visibility. Are you saying now that philosophy has changed and we are putting up CapEx ahead of demand? Or are you saying that we see the demand coming through and that's why we are going ahead and doing, we have got this new call for UI?

Speaker #3: We you know our philosophy in the past has been that you know we did not want to commit to any capex until we sort of had you know committed customer offtake or you know demand visibility.

Speaker #3: So, are you saying now that the philosophy has changed and we are putting up capex ahead of sort of demand, or are you saying that we see the demand coming through, and that's why we're going ahead and doing it—we have got this new call for EOI?

Speaker #3: Both. Both. Both—as a combination, because there are a few products where the customer is already working with us, and therefore, we have a very clear visibility in terms of the requirements that they have.

Bimal V. Mehta: Both.

Samad Singh: Both.

Bimal V. Mehta: As a combination because there are few products where customer is already working with us and therefore we have a very clear visibility in terms of the requirements that they have. In some cases, we have studied the market and we believe that we can penetrate the market considering the relationships that we have and considering the track record that we have. That's where we will be investing ahead of having a very confirmed kind of a business. But in quite a few products, it's largely driven by customer requirements.

Speaker #3: And in some cases, we have studied the market, and we believe that we can penetrate the market, considering the relationships that we have and considering the track record that we have.

Speaker #3: So that's where we will be investing ahead of, you know, having a very confirmed kind of a business. But in quite a few products, it's largely driven by customer requirements.

Speaker #3: Got it. But we are now not we are not going to be as conservative as we were. So we will invest in facility as I just mentioned we are investing in multi-purpose pilot plant which is basically there is no specific product there because it is going to be used to scale up multiple or rather different products and it's it's a very large pilot plant four streams and with very complex equipment and other things.

Samad Singh: Got it.

Bimal V. Mehta: Well, we are now not going to be as conservative as we were. So we will invest in facility. As I just mentioned, we are investing in a multipurpose pilot plant. There is no specific product there because it is going to be used to scale up multiple or rather different products, and it's a very large pilot plant, four streams and with very complex equipment and other things.

Speaker #3: Right. You know, in the last phone call, which was I think more than a year ago on February 25th, it was sort of guided to ₹150 to ₹200 crores of, you know, new revenue annually from three or four new products we're working on.

Samad Singh: Right. In the last on call, which was I think more than a year ago, in February 2025, that sort of guided to INR 150 to 200 crores of new revenue annually from three or four-

Bimal V. Mehta: Yes

Samad Singh: products you are working on. I do not think we have seen that coming as yet. Can you just talk about what is the revenue in INR terms there from these new products in FY26 and in the first quarter?

Speaker #3: So, you know, I'm not—I don't think we've seen that coming as yet. If we just talk about what is the revenue in rupee terms from these new products in FY26 and in the first quarter.

Speaker #3: So right now, as I said, most of the products are under development. Rather, some of them are under final development and some of them are at different stages.

Bimal V. Mehta: Right now, as I said, most of the products are under development and final, rather some of them are under final development and some of them are at different stages. Say for example, two products which we are looking at commercializing. One is very close to commercialization. That would have probably last quarter as revenue, last quarter of this financial as revenue. But on an annual basis, that can be at least about INR 50 crore worth of business for that particular product. Second product that we are looking at commercializing, probably the commercialization will happen end of the current financial year. We will see revenue in next year. Annual revenue there is expected to be about another INR 50 crore. Then few other products which are under development where markets are very big.

Speaker #3: So, say for example, two products which we are looking at commercializing—one is very close to commercialization. So that would probably have last quarter as revenue, last quarter of this financial as revenue, but on an annual basis, that can be at least about ₹50 crore worth of business for that particular product.

Speaker #3: The second product that we are looking at commercializing—probably, the commercialization will happen at the end of the current financial year. So, we will see revenue next year.

Speaker #3: Annual revenue there is expected to be about another ₹50 crores. Then, a few other products are under development, where the markets are very big, but we have yet to connect with specific customers in terms of what kind of business we are looking at.

Bimal V. Mehta: But we have yet to connect with specific customers in terms of what kind of business we are looking at. But even if we are able to fetch a very small portion of market, then each product is INR 50 to 100 crore. That we are looking at. As I mentioned in response to very first question, we are looking at doubling our revenue in the next five to six years. It is a combination of current products wherever we have potential for growth and new products.

Speaker #3: But even if we are able to fetch a very small portion of the market, then each product is ₹50 to ₹100 crore. That is what we are looking at.

Speaker #3: And as I mentioned in response to the very first question, we are looking at doubling our revenue in the next five to six years.

Speaker #3: As a combination of current products, wherever we have potential for growth, and new products. I just, you know, if you look at, you know, in the process of getting that contract with DuPont, which was in FY18, FY19.

Samad Singh: Just, you can look at post of getting that contract with DuPont, which was FY18, FY19. If you just look at FY20 numbers to FY26, I understand our revenue goes up and down based on our raw materials. But even if you look at the gross profit number, it has increased by about 10%. The INR has depreciated against dollar only by 23%. So have our volumes remained stable and this is all pricing pressure related or we have lost volumes also in that period?

Speaker #3: So if you just look at FY20 numbers to FY26, I understand our revenue goes up and down based on our raw materials. But even if you look at the gross profit number, it has increased by about 10 percent.

Speaker #3: You know and the dollar the rupee has depreciated against dollar only by 23 percent. So has our have our volumes remained stable and this is all pricing pressure related or you know we have lost volumes also in in that period?

Speaker #3: No, no. See, when you look at it, it's not about losing volume. We have continued to be the main supplier for DuPont, and they bought very small quantities from others.

Bimal V. Mehta: No. See, when you look at it is not about losing volume. We have continued to be the main supplier for DuPont, and they bought very small quantities from others. DuPont's own business of aramid has undergone significant competitive pressures time and again, especially coming from Chinese and Korean manufacturers. So for them, a particular year may be good, where our year also may be good, and the other years may not be good. So naturally, they will order on us what they will be able to sell in terms of their end product. So it is not something that Transpek has lost any orders significantly. It is purely the market of aramid, which is their end market at play, which is affecting them, and in turn, it is affecting Transpek.

Speaker #3: But DuPont's own Aramid business has undergone significant competitive pressures time and again, especially coming from Chinese and Korean manufacturers. So, for them, a particular year may be good—where our year also may be good—and in other years, it may not be good.

Speaker #3: So, naturally, they will order from us what they will be able to sell in terms of their end product. So, it's not something that Transpek has lost any orders significantly.

Speaker #3: It is purely the market of Aramid which is their end market at play which is affecting them and in term it is affecting Transpec and that's why as you as you now have witnessed that they had they were not very keen on having any strategic interest on Aramid business and Arclin has been looking at performance material as a as their core gross area so they came in and their chipped in and they bought over the business.

Bimal V. Mehta: And that is why, as you now have witnessed, they were not very keen on having any strategic interest on aramid business. Arclin has been looking at performance material as their core growth area. So they came in, and they chipped in and they bought over the business. So this is purely a market play. It has nothing to do with Transpek's loss of volume or inability to supply, or any competition taking away a big chunk of that market.

Speaker #3: So this is purely a market play. It has nothing to do with Transpek's loss of volume or inability to supply, or any competition taking away a big chunk of that market.

Speaker #3: Got it. So, just a follow-up on that. So for Arclin, it's a cost-plus model, but in case of any further rupee depreciation, does the benefit remain with us or do we pass it on to the customer?

Samad Singh: Got it. So just a follow-up on this. For Arclin, it is a cost-plus model, but any further rupee depreciation that gets passed, the benefit will get with us, or do we pass it on to the customer?

Speaker #3: It is passed on. It is passed on. Okay. It's passed on to Arclin. Got it. Okay. Okay. And so, in that, you know, the Chinese and Korean competition is affecting the Aramid business for Arclin, or what was DuPont.

Bimal V. Mehta: It is passed on.

Samad Singh: Okay. It is passed on to Arclin. Got it. And so in that, the Chinese and Korean competition is affecting the aramid business for Arclin or what was DuPont. Isn't that a risk for us when they come in for negotiations? They would squeeze us further on the cost-plus basis saying that, because their business is affected, they would ask us to take a hit on the margin as well going forward.

Speaker #3: So you know isn't that a risk for us when they come in for negotiation you know they would squeeze us further on the cost plus basis saying that you know their because their business is affected they would ask us to take a take a hit on the margin that we're going forward.

Speaker #3: Yeah, so that is one possibility, because there are two, three reasons. One is that they are more focused in terms of, you know, getting returns on this investment.

Bimal V. Mehta: Yeah. That is one possibility because there are two, three reasons. One is that, they are more focused in terms of getting returns on this investment. That is one. Secondly, as you rightly said, competition is definitely creating pressures on them. Naturally, that pressure will pass on to us. But one good thing that we are noticing now, currently without having any pricing pressures on us at this point in time, at least, is that because of their way of doing business, they are trying to utilize their production facility to the maximum level and thereby optimizing their production cost. We are seeing that they are able to do it very successfully, and therefore the requirement for material that they had, or rather DuPont had a few months back, is now higher from us in this quarter.

Speaker #3: That is one. Secondly as you rightly said competition is definitely creating pressures on them. And naturally that pressure will pass on to us. But one good thing that we are noticing now without having currently without having any pricing pressures on us at this point in time at least is that because of their way of doing business they are trying to operate I mean they are trying to you utilize the production facility to the maximum level and thereby optimizing their production cost.

Speaker #3: And we are seeing that they are being they are able to do it very successfully and therefore the the requirement for material that they had or rather DuPont had few months back is now higher from us in this quarter.

Speaker #3: This very quarter we are seeing some higher quantities that they want to us to supply. And this is what we believe that is going to be their way of looking at things that even if they have to reduce some price and which in turn will make supplier like us monomers suppliers like us reduce our prices eventually there will be largely the whole reduction will be compensated by higher volumes.

Bimal V. Mehta: This very quarter, we are seeing some higher quantities that they want us to supply. This is what we believe that is going to be their way of looking at things, that even if they have to reduce some price, and which in turn will make suppliers like us, monomer suppliers like us, reduce our prices. Eventually, largely, the whole reduction will be compensated by higher volumes. So overall margins for us may not be affected in that sense. But yes, if you look at per kilo margin, we believe that there will be some impact, but overall margin, the loss that will be there will be more than offset by the increase in volume.

Speaker #3: So overall margins for us may not be affected in that sense, but yes, if you look at per kilo margin, we believe that there will be some impact.

Speaker #3: But overall, the margin—the loss that will be there—will be more than offset by the increase in volume. Got it. Got it.

Samad Singh: Got it. Very helpful. And sir, we have done about INR 200 crore of CapEx over the last five, six years. Can you split that between what has been the growth CapEx and what has been maintenance CapEx? If there has been significant growth CapEx, it seems as we are investing into a business where because pricing is constantly being affected, our EBITDA, our profitability, our profits are lower. So we are not actually getting any return on the CapEx made over the last five, six years.

Speaker #3: That's very helpful. And so this you know we've done about 200 crores of CapEx over the last five, six years. You know can you split that between what has been the growth CapEx and what has been maintenance CapEx and you know the if it if there has a significant growth CapEx I mean it seems as we are investing into a business where because pricing is constantly being affected I mean our EBITDA is our profitability is our profits are lower.

Speaker #3: So, we are not actually getting any return on the CapEx we've done over the last five, six years. True. True. True. True. Can we talk about that a little bit?

Bimal V. Mehta: True.

Samad Singh: Can you talk about that a little bit?

Speaker #3: Yeah. So, basically, the nature of our products is such that even a minor exposure to the atmosphere creates a lot of corrosion.

Bimal V. Mehta: Yeah. Basically, see, the nature of our products is such that even a minor exposure to atmosphere creates a lot of corrosion. Secondly, Transpek, this site was started all the way back in 1981, 1982, and some of the plants that we had were of that era. So during this period, we dismantled those plants because they had become almost unsafe and no further repairs could be done. So we replaced those plants, partly or fully. That was one CapEx, which naturally will not result into any addition in terms of capacity or in terms of revenue. Secondly, a part of CapEx went into increasing the capacity of our Thionyl Chloride production, because Thionyl Chloride is our captive consumption material, key material, and we were buying from outside, which was not making sense because we are the pioneers in Thionyl Chloride in the country.

Speaker #3: Secondly Transpec decide was started all the way back in 2000 sorry in 1981, 82. And some of those some of the plants that we had were of that era so during this period we dismantled those plant because they had become almost unsafe and no further repairs could be done.

Speaker #3: So we replaced those plants, partly or fully. That was one CapEx, which naturally will not result in any addition in terms of capacity or in terms of revenue.

Speaker #3: Secondly, a part of CapEx went into increasing the capacity of our thionyl chloride production, because thionyl chloride is a key material for our captive consumption.

Speaker #3: And we were buying from outside, which was not making sense because we are the pioneers in thionyl chloride in the country. So we decided to expand our facility of thionyl chloride, and therefore we built that—I mean, we spent some money on that also.

Bimal V. Mehta: We decided to expand our facility of Thionyl Chloride, and therefore we built that. We spent some money on that also. And again, that would not result into any additional revenue because what we were buying, we are now producing ourselves. That is why you are seeing a very large chunk of CapEx being done, but it has not resulted into any growth because none of them was really in true sense growth CapEx. Now some of the CapEx that we would be doing moving forward would definitely be tied to specific products or specific product groups, and we will inform all of you through stock exchange that what kind of objective is behind some of this CapEx.

Speaker #3: And again, that would not result in any additional revenue, because what we were buying, we are now producing ourselves. So that's why you are seeing a very large chunk of CapEx being done.

Speaker #3: But it has not resulted in any growth because none of them was really, in the true sense, growth CapEx. Now, some of the CapEx that we would be doing moving forward would definitely be tied to specific products or specific product groups.

Speaker #3: And we will inform all of you through the stock exchange about what kind of objective is behind some of this CapEx. So, what is the maintenance CapEx?

Operator: Sorry to interrupt, Mr. Singh. May we please request you to rejoin the queue, sir, for the follow-up question. Thank you. Next question is from the line of Manpreet Arora from Northern Lights. Please go ahead.

Speaker #3: Sorry to interrupt, Mr. Singh. May we please request you to rejoin the queue, sir, for the follow-up question? Thank you. The next question is from the line of Manpreet Arora.

Speaker #3: From Northern Lights. Please go ahead. Yeah, thank you very much. Sir, you know you've already given a lot of details on the new products, the polymers, and the additives, and I think you've given a lot of color on the revenue potential as well on some of them.

Manpreet Arora: Yeah. Thank you very much. Sir, you have already given a lot of details on the new products, the polymers and the additives. I think you have given a lot of colors on the revenue potential as well on some of them. Just a little more color if you can give, sir, on are these difficult to make products? Are these low competition products? Once they become commercial, do we see another chance of pricing pressures? Are there large capacities available? Just trying to understand, are these low competition, complex to make and, yeah.

Speaker #3: Just what color if you can give sir on you know are these like difficult to make products? Are these low competition products? You know once they become commercial you know do we see another chance of pricing pressure?

Speaker #3: Are there, you know, large capacities available? So, just trying to understand, you know, are these low competition, complex to make, and—yeah. So, see, some of them are not very—I would not say it's impossible or extremely difficult.

Bimal V. Mehta: So, see, some of them are not very, I would not say it is impossible or extremely difficult. Those are not very easy to make. There are not many manufacturers of some of these polymers that I just mentioned. There are manufacturers, there are small companies, there are large companies, but there is still market open for players like Transpek, because of the history and relationship in monomers market. For example, three polymers that we are working on, one is extremely complex to make, especially the one which goes into water filtration and RO and membrane and all those things. Because the basic product is not difficult to make, but the grade that is required for extreme purity processes, that grade is extremely difficult to make. So it is a mix and match. For example, again, when it comes to additives.

Speaker #3: They're not very easy to make. There are not many manufacturers. For some of these polymers that I just mentioned, there are manufacturers—there are small companies.

Speaker #3: There are large companies, but there is still a market open for players like Transpek because of the history and relationships in the monomers market. For example, we are working on three polymers. One is extremely complex to make, especially the one which goes into water filtration, RO and membrane, and all those things.

Speaker #3: Because the basic product is not difficult to make. But the grade that is required for extreme purity processes—that grade is extremely difficult to make.

Speaker #3: So, it's a mix and match. For example, again, when it comes to additives—so, additives, there are already patterns, for example, in place, which say that this kind of additive can be made with this process and all that.

Bimal V. Mehta: Additives, there are already patents, for example, in place which says that this kind of additive can be made with this process and all that. Some of those patents have been abandoned because they could not find a viable approach to make those products. So far, whatever work we have done, we believe that we have found a commercially viable approach to make those products, couple of products. That is where probably the complexity for anyone to make would be higher even. Some products are not complex that we are looking at, but then they are large volume products, and we believe that we can penetrate that market with the strengths that we demonstrate in terms of sustainability and in terms of quality delivery. So this is kind of a mix and match.

Speaker #3: Sir, some of those patterns have been abandoned because they could not find a viable approach to make those products, and so far, whatever work we have done, we believe that we have found a commercially viable approach to make a couple of those products.

Speaker #3: And that's where, probably, the complexity for anyone to make would be even higher. Some products are not complex that we are looking at, but then they are large-volume products, and we believe that we can penetrate that market with the strengths that we demonstrate in terms of sustainability and in terms of quality delivery.

Speaker #3: This is kind of a mix and match. Strategically, we want to be in those products where entry barriers can be created to some extent.

Bimal V. Mehta: Strategically, we want to be in those products where entry barrier can be created to some extent. I mean, in today's time, there is no entry barrier to anybody. Anybody says that I am creating entry barrier, it is purely a timing-based entry barrier. If somebody sets up something and runs very fast, then for a couple of years or 2, 3 years, they will enjoy the fruits, but then there will be someone else who will start making it. So entry barriers are not as strong as they used to be in past because there are so many ways to develop processes for new products. But we are trying to look at products which have some entry barriers and in addition to that, the strengths that we can bring to the table, which many others are not able to bring.

Speaker #3: I mean, in today's time, there is no entry barrier for anybody. Anybody can say that they are creating entry barriers. It's purely a timing-based entry barrier.

Speaker #3: So if somebody sets up something and runs very fast, then for a couple of years, or two or three years, they will enjoy the fruits. But then there will be someone else who will start making it.

Speaker #3: So, entry barriers are not as strong as they used to be in the past because there are so many ways to, you know, develop processes for new products.

Speaker #3: But we are trying to look at products which have some entry barriers, and in addition to that, the strengths that we can bring to the table, which many others are not able to bring.

Speaker #3: Even in acid chlorides, for example—that is our typical product—while we have not grown, we have sustained largely what we have been doing in the last six or seven years, despite having almost eight or nine new manufacturers coming in within India.

Bimal V. Mehta: Even in acid chlorides, for example, that is our typical products. While we have not grown, we have sustained largely what we have been doing despite having in last 6, 7 years, despite having almost 8 or 9 new manufacturers coming in within India. Because of our strengths, we know that that's not that easy to replicate. A basic manufacturing process can be replicated, but there are so many dimensions which cannot be replicated. So we are working on a mix and match in terms of the product profile.

Speaker #3: And we still have, because of our strengths, that we know that's not that easy to replicate. A basic manufacturing process can be replicated, but there are so many dimensions which cannot be replicated.

Speaker #3: So, we are working on a mix and match in terms of the product profile. Great, thanks sir. That was very helpful. Sir, just a clarification on the multiprocess plant.

Manpreet Arora: Great. Thanks. That was very helpful. Sir, just a clarification on the multipurpose plant. Is this plant planned for the Odisha site?

Speaker #3: Did is this plant planned for the Orissa kettle sir? This is No. No. This is going to be set up here Orissa is still yet you know under approval in I mean in terms of board approval and then finally we will have to submit the final feasibility study to Orissa government.

Bimal V. Mehta: No, this is going to be set up here. Odisha is still yet under approval, in terms of board approval, and then finally, we will have to submit the final feasibility study to Odisha government. This is a multipurpose pilot plant. What happens typically is that there are products which we are able to develop in R&D and kilo lab scale, but we do not have facilities which can help us scale up to, say, tonnage, so 2 tons, 3 tons, 5 tons, because that would be the real process that we will eventually replicate in the commercial plant. So that's why we decided that we need to invest in such a facility, and it's a multipurpose facility. So we can do chlorination, we can do fluorination, we can do nitration, we can do multistep, so 5 step, 7 step, 8 step chemistry.

Speaker #3: This is for this multi this is a multi-purpose pilot plant. So what happens typically is that there are products which we are able to develop in R&D and kilo lab scale but we have we do not have facilities which can help us scale up to say ton age.

Speaker #3: So, two tons, three tons, five tons—because that would be the real process that we will eventually replicate in the commercial plant. So that's why we decided that we need to invest in such a facility.

Speaker #3: And it's a multi-purpose facility. So we can do chlorination. We can do fluorination. We can do nitration. We can do multi-step. So five steps seven step eight step chemistry.

Speaker #3: We can do falling film distillation. We can do short path distillation. We can do normal distillation. All kind of unit of operations different different unit of operations and different different chemistries that we can do.

Bimal V. Mehta: We can do falling film distillation, we can do short path distillation, we can do normal distillation, all kind of unit of operations, different unit of operations and different chemistry that we can do. So that whatever product we take, we can easily understand the scale-up requirements, do trial on this pilot scale, produce few tons, understand the intricacies of process, and make sure that when we go to commercial scale, we do not fail. So that's the objective of this facility, and that would be currently housed in Ekalbara only.

Speaker #3: So that whatever product we take, we can easily understand the scale-up requirements, you know, do a trial on this pilot scale, produce a few tons.

Speaker #3: Understand the entry causes of the process and make sure that when we go to commercial scale, we do not fail. So that's the objective of this facility, and that would be currently housed in Ekalbara only.

Speaker #3: Perfect. Understood. So, sir, this will come towards the end of the year? Yes. Around maybe February? Yes. Okay. And, sir, on this relationship with Arclin, now that you have sold the business, does it—you know, it's a new relationship for us.

Manpreet Arora: Okay. Understood. So this will come towards the end of the year?

Bimal V. Mehta: Yes. Around maybe February. Yes.

Manpreet Arora: Okay. And sir, on this relationship with Arclin, now that DuPont have sold the business, it is a new relationship for us. Does it give us opportunities to expand within this portfolio?

Speaker #3: Does it give us opportunities to, you know, expand within this portfolio? Yes. Yes. So, of course, their core business has been a very different business.

Bimal V. Mehta: Yes. Their core business has been a very different business. But there also, we believe we have some opportunities, so we are talking to them. On top of that, because their interest is in performance materials, I mean, as a very critical strategic objective. And performance materials, in other words, they are largely polymers. So we are talking to them in terms of our polymer development that we are doing. So we do see an opportunity. We also have built relationship at the highest level already, and we had some meetings also. Looking at now furthering that, and they are also probably understanding what strength Transpek brings, because for them, we are new, and for us, they are also new. So we both are trying to understand each other in terms of the business philosophy, the strengths, the approach to business.

Speaker #3: But they are also—we believe we have some opportunities, so we are talking to them. On top of that, because their interest is in performance materials, I mean as a very critical strategic objective.

Speaker #3: So, performance materials are, you know, in other words, they are largely polymers. So we are talking to them in terms of our polymer development that we are doing.

Speaker #3: So, we do see an opportunity. We have also built relationships at the highest level already, and we have had some meetings as well. Now, we are looking at furthering that, and they are also probably understanding what strengths Transpek brings, because for them, we are new.

Speaker #3: And for us they are also new. So we all are we both are trying to understand each other in terms of the business philosophy the strengths the approach to business.

Speaker #3: And, but there is a very strong positive environment and discussion also, that we can look at working together in multiple other opportunities. Great. Great.

Bimal V. Mehta: But there is a very strong positive environment and discussion also that we can look at working together in multiple other opportunities.

Manpreet Arora: Great. Thank you very much. All the best.

Speaker #3: Thank you very, very much, sir, and all the best. Thank you, thank you, thank you. Next question is from the line of Pratik Kothari from Unique PMS.

Bimal V. Mehta: Thank you.

Operator: Thank you. Next question is from the line of Pratik Kothari from Unique PMS. Please go ahead.

Speaker #3: Please go ahead. Yes. Hi, good evening everybody. Good evening. Yes, similar one. I hope now, after a break, with this quarterly call we are back at it and we'll kind of stay.

Pratik Kothari: Yes. Hi. Good evening, Nimalbhai.

Bimal V. Mehta: Good evening.

Pratik Kothari: Yes. Similar one, I hope now after a break, this quarterly calls, we are back at it and will kind of stay.

Speaker #3: Yes, it will stay. It will stay. I want to continue this on a very regular basis. Yes. Got it. Great, good to hear.

Bimal V. Mehta: Yes, it will stay. I want to continue this on a very regular basis. Yes.

Pratik Kothari: Got it. Great. Good to hear. Nimalbhai, on this Odisha, I understand it is all under plans, too early. Just any timeline in terms of when can we just start work, or once we start work, how much time will it take? I understand approvals and sometimes it takes a lot of time, and we have seen that in the past too. But in your estimate, what kind of timeline are we looking at? The last big CapEx that we did for DuPont was about INR 150 odd crores. So ballpark, what is it that we are thinking?

Speaker #3: Do you know this Orissa? I mean, I understand it's all under plans too early, but just any timeline in terms of when can—I mean, will we either start work, or once we start work, how much time will it take?

Speaker #3: I understand approvals, and sometimes it takes a lot of time, and we have seen that in the past too. But, in your estimate, what kind of timeline are we looking at? And so, the last big KPIs that we did for DuPont was about ₹150 crore.

Speaker #3: So I mean ballpark what is it that we are thinking? Yeah. Yeah. 110 crores we had done for DuPont. Now see if if if we we look at the timeline now if we I I'm I'm planning to go to the board within another maximum another 25 30 days.

Bimal V. Mehta: Yeah. INR 110 crores we had done for DuPont. Now, if we look at the timeline, I am planning to go to the board within maximum another 25, 30 days. Once board approves, then Odisha government has already approved in principle our application. So we will be filing feasibility study. Once that goes through, I think they generally want us to do couple of presentations, because it is government, so it takes another month to complete. Everything goes right. Then you are looking at September, October. By November end, the decision would have been made, and we would start working on the project itself by November, if everything goes. First of all, of course, if board approves, that is the most-

Speaker #3: So once board approves then government has already Orissa government has already approved in principle our application. So we will be filing feasibility studies. Study and once that goes through I think there are there generally want us to do couple of presentations which take because of it's government so takes another month to complete.

Speaker #3: So if everything goes right, then you are looking at September, October, November—by November end, the decision would have been made. And we would start working on the project itself by November end, if everything goes—if first of all, of course, if the Board approves. That is the most important point.

Pratik Kothari: Correct

Bimal V. Mehta: important point.

Speaker #3: Correct. And once the decision is taken, I mean, given this will be greenfield, this would take how long? Yeah. It takes quite a—permissions are not very, I mean, not very difficult in that place because it is part of a kind of pre-approved chemical zone.

Pratik Kothari: Correct. Once that decision is taken, given this will be greenfield, this would take how long?

Bimal V. Mehta: Yeah. Permissions are not very difficult in that place because it is part of a pre-approved chemical zone. So there is no public hearing. EC is required, but EC is also required as a sub-EC because they have already done EC for the entire area.

Speaker #3: So, there is no public hearing. EC is required, but EC is also required. There is a sub-EC because they have already done EC for the entire area.

Pratik Kothari: Right.

Speaker #3: So, and there is a single window system, unlike what we have in Gujarat and Maharashtra. There, they have a single window system. So I don't see permissions are going to take ages; maybe three to four months, all permissions should come.

Bimal V. Mehta: There is a single window system, unlike what we have in Gujarat and Maharashtra.

Pratik Kothari: Correct.

Bimal V. Mehta: There they have single window system. So I don't see permissions are going to take ages. Maybe 3 to 4 months, all permissions should come. Once permissions come, then naturally the construction work will start. So definitely it cannot be a 1-year job where you will see commercial production within 1 year. It should be at least 1.5 to 2 years.

Speaker #3: And once permissions come, then naturally the construction work will start. So definitely, it cannot be a one-year job where you will see commercial products, and within one year—it should be at least one and a half to two years.

Speaker #3: Right. So, setting this up once you have EC accepted would be another year long? The KPI cycle, the setting up of this plant, affects, yes.

Pratik Kothari: Right. So setting this up, once you have EC, et cetera, would be another year long? The CapEx cycle will be.

Bimal V. Mehta: Sorry.

Pratik Kothari: The setting up of this plant, the CapEx.

Bimal V. Mehta: Yes, another one year you have to count. Yes.

Speaker #3: Another one—one year you have to count. Yes. Got it, correct. And nowadays, the other problem is that the delivery lead times are also quite long in terms of equipment and other things.

Pratik Kothari: Okay, correct. Then

Bimal V. Mehta: Nowadays, the other problem is that the delivery lead times are also quite long in terms of equipment and other things. The reason being, the steel prices and all that are going through so much up and down, and largely up only, that the manufacturers also don't want to stock metals. They also wait for, as you know, it's very complex scenario. You are a veteran in stock market, so you understand all of these things.

Speaker #3: And the reason being, the steel prices and all that are going through so much up and down—I mean, largely up only—that the manufacturers also don't want to stock metals.

Speaker #3: And they also wait for—you know, I mean, as you know, it's a very complex scenario. I don't want to—you are a veteran in the stock market.

Speaker #3: So, I don't want you to, you know, understand all of these things. But some of these things also take time. But fortunately, we have a team which has built a reputation for very quick execution of projects.

Pratik Kothari: Correct.

Bimal V. Mehta: But some of these things also take time. Fortunately, we have a team which has built a reputation for a very quick execution of projects. So we may be able to do it little better than others.

Speaker #3: So we may be able to do it a little better than others. But the time and intensity would be, what, ₹150–200 crores or more?

Pratik Kothari: Correct.

Bimal V. Mehta: The time is

Pratik Kothari: Your CapEx intensity would be what, INR 150 to 200 crores or more?

Speaker #3: Yeah. Over five years we are looking at five six years we are looking at almost 250 crores. This will be over multiple three years.

Bimal V. Mehta: Over five, six years, we are looking at almost INR 250 crores.

Pratik Kothari: This will be over multiple phases.

Speaker #3: Yes, got it, got it, got it. And second, that's a clarification. So, in the annual report, I think we have mentioned this time that we have introduced non-asset chlorides.

Bimal V. Mehta: Yes.

Pratik Kothari: Correct. Second, just a clarification. In the annual report, I think they have mentioned, they said that they have introduced non-Acid Chlorides. From your discussion it felt it is yet to. If you can just clarify where are we in that. On the last call, we had mentioned we have some three non-Acid Chlorides that we wanted to start commercialization. So where are we in that journey?

Speaker #3: But from your discussion, it felt like it is yet to happen. So, if you can just clarify where we are in that, because on the last call, we had mentioned that we have three non-asset chlorides that we wanted to start commercializing.

Speaker #3: So, where are we in that journey? Yeah, so that's what I just mentioned, that we are now very close to commercialization of one.

Bimal V. Mehta: Yeah. That's what I just mentioned, that we are now very close to commercialization of one. We are just finalizing the pilot lot to be given to the customer, which is 5 metric tons. Once that 5 metric tons are provided to customer, it's an Indian customer, very large company, and then they will utilize that to do a performance trial. That performance trial may take another three to four months. So by end of this calendar year, we should see commercialization of that product, and in the last quarter, we might be seeing some small revenue coming out of that. There was one product which we were planning to commercialize, but then technology for the end application changed in between. So the customer said that we will have to revisit the entire thing, because it was going into battery electrolyte.

Speaker #3: We are just finalizing the pilot lot to be given to the customer, which is five metric tons. Once that five metric tons are provided to the customer—this is an Indian customer, a very large company.

Speaker #3: And then they will utilize that to do a performance trial. That performance trial may take another three to four months. So by the end of this calendar year, we should see commercialization of that product.

Speaker #3: And in the last quarter, we might be seeing some small revenue coming out of that. There was one product which we were planning to commercialize, but then technology for the end application changed in between.

Speaker #3: So, the customer said that we will have to revisit the entire thing because it was going into battery electrolyte. But there are some changes in the technology, because as you know, that field is evolving almost every day.

Bimal V. Mehta: But there are some changes in the technology, because as you know, that field is evolving almost every day. So we may have to modify the product, details are awaited from customer. When I talked about few products, that was one of the product in the process of development, but that had to be stopped. Now we are looking at modifying that product. Then modification does not necessarily mean that you just modify some raw material and it will be okay. You have to undergo the same level of trials. Secondly, since you mentioned about commercial, I think it's a good idea to mention because then that would help others also. Nowadays, AI has been a very useful tool in expediting product development. We means not Transpek, chemical industry is still learning how to utilize that.

Speaker #3: So we may have to modify the product which we are awaiting now from details are awaited from customer. So that's where the when we when I talked about few products that was one of the product in the in the process of development.

Speaker #3: But that had to be stopped, and now we are looking at modifying that product. Modification does not necessarily mean that you just change some raw material and it will be okay.

Speaker #3: You have to undergo the same level of trials. So, secondly, since you mentioned about—I think it's a good idea to mention, because then that would help others also.

Speaker #3: Nowadays, AI has been, you know, a very useful tool in expediting product development. We are still—we, we means not Transpek—the chemical industry is still learning how to utilize it.

Speaker #3: The pharma industry has been utilizing that now very actively, and molecular development—which used to take three to four years—is now being done in about 12 to 18 months by pharma.

Bimal V. Mehta: Pharma industry has been utilizing that now very actively, and molecular development, which used to take three, four years, is now being done in about 12 to 18 months by pharma, those who are understanding the use of AI. So chemical industry is also becoming aware about this. At Transpek also, we are building some AI models which will improve our ability to develop product in terms of the speed and in terms of the overall results. Because AI will help create simulations of the trials without actually going into laboratory, and discard those trials which otherwise would have been physically done and taken a lot of time. Then it will zero on to a specific number of trials that would be closer to what would give you the result. So that kind of models, of course, we are not there.

Speaker #3: Those who are understanding the use of AI. So chemical industry is also becoming you know aware about this. So it transmit also we are building some AI models which will improve our ability to develop product in terms of the speed and in terms of the overall results.

Speaker #3: Because these AI will help create simulations of the trials without actually going into the laboratory, and discard those trials which otherwise would have been physically done and taken a lot of time.

Speaker #3: And then it will zero in on a, you know, specific number of trials that would be closer to what would give you the result. So that kind of model, of course, it is—I mean, say, we are not there.

Speaker #3: But these kinds of models are possible, and we are looking at developing some of those models. Some work is already going on. A team of software and other experts are already working on it.

Bimal V. Mehta: But these kind of models are possible, and we are looking at developing some of those models. Some work is already going on. A team of software and other experts are already working on it, and hopefully, we will have some support in terms of that process and that could expedite the product development.

Speaker #3: And we will hopefully we will have some some support in terms of that that process. And that can that could expedite the product development.

Speaker #3: That's great to hear. Sure. Thank you, and all the best, sir. Thank you. Thank you. Thank you. Thank you. Next question is from the line of Madhur Rathi from Counter Cyclical Investments.

Pratik Kothari: That's great to hear. Sure. Thank you, and all the best, sir. Thank you.

Bimal V. Mehta: Thank you.

Operator: Thank you. Next question is from the line of Madhur Rathi from Counter-Cyclical Investments. Please go ahead.

Speaker #3: Please go ahead, sir. Thank you for the opportunity. Sir, I wanted to understand, firstly, about the TC and IC products that are going into Kevlar and Nomex.

Madhur Rathi: Sir, thank you for the opportunity. Sir, I wanted to understand, focusing on the TPC and IPC product that are going into Kevlar and Nomex. Sir, some of the Chinese and Korean companies have added their capacity as well, and you mentioned that going forward, the margin per kilo might be lower. Sir, do we see a scenario where the ROCE profile of business will get lower because of incremental competition? If you could help us understand on that.

Speaker #3: Sir, some of the Chinese and Korean companies have added to their capacity as well. And you mentioned that, going forward, the margin per kilo might be lower.

Speaker #3: Sir, do you expect to see a scenario where the RoC profile of the business will get lower because of incremental competition? It would help us if you could elaborate on that.

Bimal V. Mehta: No, actually, what is happening is that, first of all, just for clarification, Nomex and Kevlar are the brand names. So these are the brand names of DuPont. They are basically para-aramid and meta-aramid. So these are the end products. Chinese manufacturers are largely focused on applications which are low-end applications. For example, bag filters are made from that. Some of the automotive components of a lower category cars are made from that. Some material is used in firefighting and construction. Those are not very high-end applications. They are not mission-critical applications, and where Chinese have an edge in terms of their ability to produce and sell and all that. DuPont, and now Arclin, has been into aramids, but in a mission-critical application. So aerospace, firefighting, but firefighting at a different scale, where this is like huge fires and all that.

Speaker #3: No. Actually what is happening is that first of all just to just for clarification that Nomex and Kevlar are the brand names. So that these are the brand names of DuPont.

Speaker #3: They are basically para-aramid and meta-aramid. So, these are the end products. Now, Chinese manufacturers are largely focused on applications which are low-end applications.

Speaker #3: So, for example, bag filters are made from that. Some of the automotive components of lower category cars are made from that. Some material is used in firefighting and construction.

Speaker #3: Those are not very high-end applications. They are not mission-critical applications. And that's where the Chinese have an edge in terms of their ability to produce and sell, and all that.

Speaker #3: DuPont and now Arclin has been into aramids but in the mission critical applications. So aerospace firefighting but firefighting in a very at a different scale you know where this is like huge fires and all that.

Speaker #3: So, they make those kinds of clothing—for firefighters, in space, in very high-end vehicles, in very, you know, high-end construction. So, the Chinese have been penetrating the low end of the market, and DuPont and Arclin have been in the higher end of the market.

Bimal V. Mehta: So they make those kind of clothing for firefighters. In space, in very high-end vehicles. In very high-end construction. So Chinese have been penetrating low end of the market, and DuPont and Arclin have been in the higher end of the market. So that way, there is no direct competition. Korean companies have also their own products. For example, one company is making clothing out of Kevlar, sportswear. So there are their own products where they are also focused. We do not see a kind of direct competition coming from this added capacity. Yes, DuPont and Arclin now. Arclin has competition from some Korean suppliers and one or two Chinese suppliers, but their capacities are not increasing because the overall aramid market for those high-level applications is not increasing much. Therefore, those capacities are not increasing, and we are suppliers to those kind of manufacturers.

Speaker #3: So that way, there is no direct competition. Korean companies also have their own products. For example, one company is making clothing out of Kevlar.

Speaker #3: Sports sportswear. So, there are their own products where they are also focused. We do not see a kind of direct competition coming from this. Edit edit capacity.

Speaker #3: Yes. DuPont and Arclin—now, Arclin has some competition from some Korean suppliers and one or two Chinese suppliers. But their capacities are not increasing because the overall aramid market for those high-level applications is not increasing.

Speaker #3: Much. So therefore that those capacities are not increasing and we are we are suppliers to those those kind of manufacturers. So we do not see any significant impact of Chinese or Korean putting up this higher capacities.

Bimal V. Mehta: We do not see any significant impact of Chinese or Korean putting up these higher capacities.

Speaker #3: Sir. So if I were to like rephrase your sir. Sir. Because of the high end application being limited to few players DuPont and Arclin is it that there will be the demand would be limited for our products and that's why because you mentioned on one side that seven eight manufacturers try to enter this market but they weren't able to scale their product.

Madhur Rathi: Sir, so if I were to like rephrase this, sir, because of the high-end application being limited to few players, DuPont and Arclin, is it that the demand would be limited for our products, and that's why? Because you mentioned on one side that seven, eight manufacturers tried to enter this market, but they weren't able to scale their product. But at the same time,

Speaker #3: But at the same time—sorry, sorry. That is the product that we make, yes. I was talking about the product that we... and that is not only— that is not only IPC and TPC.

Bimal V. Mehta: Sorry. That is the product that we make.

Madhur Rathi: Yes.

Bimal V. Mehta: I was talking about the product that we and that is not only IPC and TPC. There are other 10 or 12 Acid Chlorides. So I'm talking about all Acid Chlorides, where they entered.

Speaker #3: There are another ten or twelve acid chlorides. So I am talking about all acid chlorides—where they entered. Right, sir? So, that would mean that acid chloride manufacturing is difficult, but we aren’t able to decide the terms with our customers, because from my understanding, that seems to be the problem here.

Madhur Rathi: Right. So that would mean that Acid Chlorides manufacturing is difficult, but we are not able to decide the terms with our customers, because from my understanding, that seems to be the problem here. If you could help us understand on that.

Speaker #3: So, if it would help us understand on that—no, no, no. Actually, so far as, for example, Arclin is concerned, we have a formula-based cost-plus pricing.

Bimal V. Mehta: No. Actually, so far as, for example, Arclin is concerned, we have a formula-based cost plus pricing. Competition or no competition, that does not change. The change happens where there is open pricing. For example, Indian market, Korean market, and Chinese market, because we also export to China. I am not talking about IPC, TPC. I am talking all Acid Chlorides. That is where the competition is very tough. Naturally, it is purely driven by the negotiated price. That is where these competitors who have come in last few years have, of course, captured some market, but they have not been able to damage us much, and therefore, we have been able to largely sustain our revenues and margins, despite having so many competitors coming in last few years.

Speaker #3: So, competition or no competition, that doesn't change. The change happens where there is open pricing. So, for example, the Indian market, Korean market, and Chinese market, because we also export to China.

Speaker #3: I'm not talking about IPC or TPC. I'm talking about all acid chlorides. So that's where the competition is very tough. Naturally, it is purely driven by the negotiated price.

Speaker #3: And that's where, you know, these competitors who have come in the last few years have, of course, captured some market, but they have not been able to damage us much.

Speaker #3: And therefore, we have been able to largely sustain our revenues and margins, despite having so many competitors coming in during the last few years.

Speaker #3: Got it, sir. One question more, sir. We make this product called trimethyl benzoyl chloride, which is required in TCB, sir. So first thing is, where are we on this product?

Madhur Rathi: Got it. Sir, one question more. Sir, we need this product called 2,4,6-Trimethylbenzoyl chloride, that is required in PCB. Sir, the first thing is, where are we on this product? Can we expect this product to scale up over the next few years? Sir, do we have capability to manufacture electronics grade purity for these products? Because you mentioned that the membrane product as well would require very high purity. If you just give a guidance on that.

Speaker #3: Have we—can we access this product to scale up over the next few years? And, Sir, do we have the capability to manufacture electronic-grade purity for these products?

Speaker #3: Because you mentioned that the membrane product as well would require very high purity, could you give us some guidance on that? Basically, first of all, this TMBC that you mentioned is our very old product.

Bimal V. Mehta: Well, basically, first of all, this 2,4,6-Trimethylbenzoyl chloride that you mentioned is our very old product. It is not something that we have newly started. Traditionally, this goes into what is called photoinitiators. Basically, if you know, in old times when we used to buy a car, for example, after one or 2 or 3 years, we will start to see the color of the car fading. In today's cars, you do not see anything fading for years. If you keep it clean, it shines. That is basically the role of photoinitiator. We have been supplying to photoinitiator market for quite some time, this 2,4,6-Trimethylbenzoyl chloride. Now some of these products are finding new use in electronics.

Speaker #3: It is not something that we have newly started. This goes traditionally—this goes into what is called photo initiators. So basically, if you know, in old times when we used to buy a car, for example, after one or two or three years, you would start to see the color of the car fading.

Speaker #3: In today's cars, you don't see anything fading for years. If you keep it clean, it shines. So, that is basically the role of a photo initiator.

Speaker #3: And we are we are we have been supplying to photo initiator market for quite some time this two four six. It is two four six TMBC.

Speaker #3: Now, some of these products are finding new use in electronics. And as you yourself mentioned, in order to be able to supply to electronics applications, you need to have very high purity.

Bimal V. Mehta: As you yourself mentioned, that in order to be able to supply to electronics application, you need to have very high purity and especially the metallic impurity should not be there. This is something which is extremely critical. We have capability, but it is a complex process. We are working on some of the products to achieve that kind of purity for electronics grade material. We are working with one very large company where they want one of our very basic product, but electronics grade. Then we are working on purifying technologies. It is a process. It will take some time.

Speaker #3: And especially the metallic purity should not I mean metallic impurity should not be there. This is something which is extremely critical. So we we have capability but it it is it is a complex process.

Speaker #3: So we are working on some of the products to achieve that kind of purity for electronics-grade material. We are working with one very large company where they want one of our very basic products, but electronics-grade.

Speaker #3: So then we are working on purifying technologies. It's a process. It will take some time. Got it, sir. Just a final question.

Madhur Rathi: Sir, just final question.

Speaker #3: Sorry to interrupt, Sir. Could I please request the Arclin team to rejoin the queue? It's just a final question, Sir. What kind of IRR or payback do we expect on the 250 crore investment that we are planning for the Odisha plant?

Operator: Sorry please just one question rejoin the queue, sir.

Madhur Rathi: It is just a final question. Sir, what kind of IRR or payback do we expect on the INR 350 crore investment that we are planning for the Odisha plant? Sir, that was my question. Thank you, sir.

Speaker #3: So that was my question. Thank you, sir. Maybe it would be four to five years. Thank you. Next question is from the line of Prashant, an individual investor.

Bimal V. Mehta: Payback would be four to five years.

Operator: Thank you. Next question is from the line of Prashant, an individual investor. Please go ahead.

Speaker #3: Please go ahead. Good evening. Is my voice audible? Yes, yes. So, first of all, as one of the earlier participants mentioned, please continue to have these calls on a regular basis.

[Company Representative]: Good evening. Is my voice audible?

[Unknown Shareholder]: Good evening. Is my voice audible?

Bimal V. Mehta: Yes.

[Company Representative]: First of all, as one of the earlier participants mentioned, please continue to have these calls on a regular basis. For small investors and individual investors, this is very helpful. Another suggestion is you made some very detailed remarks on new product development.

[Unknown Shareholder]: First of all, as one of the earlier participants mentioned, please continue to have these calls on a regular basis. For small investors and individual investors, this is very helpful. Another suggestion is you made some very detailed remarks on new product development.

Speaker #3: For small and individual investors, this is very helpful. Another suggestion: you made some very detailed remarks on new product development—yes. Can you please include in your presentation what are the new products introduced this quarter, previous quarter, same quarter last year, and previous financial year? What is the total addressable market, what is the market share you are expected to gain, and what is the gross margin or EBITDA margin?

Bimal V. Mehta: Yes.

[Company Representative]: Can you please include in your presentation, like what are the new products introduced this quarter, previous quarter, same quarter last year, previous financial year, what is the total addressable market, what is the market share you are expecting to gain, and what is the gross margin or EBITDA margin? Otherwise, very frankly, the investor presentation looks like a word description of an Excel spreadsheet. Pardon me if it is very blunt, but if you can include that in your investor presentation, that will eliminate a lot of questions in the conference call.

[Unknown Shareholder]: Can you please include in your presentation, like what are the new products introduced this quarter, previous quarter, same quarter last year, previous financial year, what is the total addressable market, what is the market share you are expecting to gain, and what is the gross margin or EBITDA margin? Otherwise, very frankly, the investor presentation looks like a word description of an Excel spreadsheet. Pardon me if it is very blunt, but if you can include that in your investor presentation, that will eliminate a lot of questions in the conference call.

Speaker #3: You know, I mean, otherwise, very frankly, the investor presentation looks like a word description of an Excel spreadsheet. Pardon me if I am being very blunt, but if you can include that in your investor presentation, it will eliminate a lot of questions in the conference calls.

Speaker #3: So, I know—I respect your sentiment. We will do that, except that we may not be able to provide, in certain cases, specific product-wise EBITDA or product-wise margins and all that, because there are two reasons.

Bimal V. Mehta: I know, I respect your sentiment. We will do that, except that we may not be able to provide, in certain cases, specific productize EBITDA or productize margins and all that, because there are two reasons. One is that we may have confidentiality agreements with the customers, and secondly, an investor presentation goes in public domain, and naturally our competitors also would have access to it. So as a shareholder, you would not like a company to suffer because a competitor comes to know of our levels of margin and all that. But we respect what you said, and we will try to provide as much detail as we can.

Speaker #3: One is that we may have confidentiality agreements with the customers, and secondly, an investor presentation goes into the public domain and, naturally, our competitors would also have access to it.

Speaker #3: So as a shareholder, you would not like a company to suffer because a competitor comes to know of— you know— our levels of margin and all that.

Speaker #3: So, but we respect what you said, and we will try to provide as much detail as we can. Absolutely. I mean, we may not do that, but at least have a broad... I mean, the idea is that the company is doing a lot of good work and is headed in the right direction.

[Company Representative]: Absolutely. We may not be able, but at least as a broad. The idea is that the company is doing a lot of good work and in the right direction. As an investor, we would like to know what will be the financial implications of it. That was one part.

[Unknown Shareholder]: Absolutely. We may not be able, but at least as a broad. The idea is that the company is doing a lot of good work and in the right direction. As an investor, we would like to know what will be the financial implications of it. That was one part.

Speaker #3: As investors, we would like to know what the financial implications of this will be. That was one part. Absolutely right, Prashant.

Bimal V. Mehta: You are absolutely right, Prashant. Actually, we have been told, and some of our earlier shareholders who spoke and whom we respect because they have been with us for many, many years, despite us going through ups and downs. As they mentioned also that you need to be aggressive. While we are now becoming aggressive in terms of our execution, we also have been very conservative in presenting this information, but you will see a change in that also.

Speaker #3: Actually, we have been told, and you know, some of our earlier shareholders who spoke—and whom we respect because they have been with us for many, many years.

Speaker #3: Despite us going through ups and downs and and and and as they mentioned also that you need to be aggressive. So we while we are now becoming aggressive in terms of our execution we also have been very conservative in presenting this information but you will see a change in that also.

Speaker #3: Okay, the second thing was, again, I mean, the Celox investment. Again, not to repeat, but you mentioned that there, you alluded to a certain shareholders' agreement and that it is not an easily monetizable investment.

[Company Representative]: Okay. The second thing was, again, the Silox investment. Again, not to repeat, but you mentioned that you alluded to a certain shareholders agreement and that it is not an easily monetizable investment.

[Unknown Shareholder]: Okay. The second thing was, again, the Silox investment. Again, not to repeat, but you mentioned that you alluded to a certain shareholders agreement and that it is not an easily monetizable investment.

Speaker #3: Yes. Yeah. My limited point is that we have Mr. Ravish Rao, who is also a director in Celox. We might be having a shareholders' agreement, although I do not know—since it is not in the public domain—what are the exact contours of the shareholders' agreement.

Bimal V. Mehta: Yes.

[Company Representative]: My limited point is that we have Mr. Ravi Shroff, who is also a director in Silox. We might be having a shareholders agreement, although it is not in the public domain, what are the exact contours of the shareholders agreement.

[Unknown Shareholder]: My limited point is that we have Mr. Ravi Shroff, who is also a director in Silox. We might be having a shareholders agreement, although it is not in the public domain, what are the exact contours of the shareholders agreement.

Speaker #3: Yes, but we might be having— and if we were to— I mean, like you said, I mean, you would like to monetize it. So, any concrete steps— like have we appointed a merchant banker?

Bimal V. Mehta: Yes.

[Company Representative]: But we might be having. Like you said, you would like to monetize it, so what any concrete steps? Have we appointed a merchant banker? Have we appointed a legal firm? There might be a right of first refusal. Have we invited them to exercise the right of first refusal? Are there any concrete discussions that have happened over the last

[Unknown Shareholder]: But we might be having. Like you said, you would like to monetize it, so what any concrete steps? Have we appointed a merchant banker? Have we appointed a legal firm? There might be a right of first refusal. Have we invited them to exercise the right of first refusal? Are there any concrete discussions that have happened over the last

Speaker #3: Have we appointed a legal firm? There might be a right of first refusal. So, have we invited them to exercise the right of first refusal?

Speaker #3: I mean, are there any concrete discussions that have happened over the last— Yes. I mean, we have had discussions with them for quite some time.

Bimal V. Mehta: Yes.

[Company Representative]: And-

[Unknown Shareholder]: And-

Bimal V. Mehta: I mean, we have had discussions with them for quite some time. The agreement requires them to purchase our. Requires them means, if we offer, they can decide whether to purchase or not. We have offered also, but you see, this is an illiquid investment, and you cannot suddenly. They also will not have that kind of money to immediately pay. Secondly, it is not that easy for us to go out in the market and sell those shares. We have been discussing this.

Speaker #3: The agreement requires them to purchase— I mean, requires them— means they, when, if we offer, they can decide whether to purchase or not.

Speaker #3: And we have offered also, but you see, this is an illiquid investment and you cannot suddenly—I mean, they also will not have that kind of money.

Speaker #3: To immediately pay. And secondly, it is not that easy for us to go out in the market and sell those shares. We have been discussing this.

Speaker #3: I mean, just one—I mean, one—I mean, I would not say disagreement, but from what I understand is Celox had cash and liquid investments of around ₹500 crore as of 31st March 2025.

[Company Representative]: I would not say disagreement, but from what I understand is Silox had a cash and liquid investments of around INR 500 crores as of 31 March 2025. They had sales of INR 1,600 crores and a net profit of INR 200 crores.

[Unknown Shareholder]: I would not say disagreement, but from what I understand is Silox had a cash and liquid investments of around INR 500 crores as of 31 March 2025. They had sales of INR 1,600 crores and a net profit of INR 200 crores.

Speaker #3: They had sales of ₹1,600 crores and a net profit of ₹200 crores. Yes, of course. So obviously, valuation will play a part, but I mean, if they do not agree to buy, there would be a second option of appointing a merchant banker and doing an offer for sale, or, I mean, selling the two of them.

Bimal V. Mehta: Yes, of course.

[Company Representative]: Obviously valuation will play a part. But, if they do not agree to buy, there would be a second option of appointing a merchant banker and doing an offer for sale or selling the-

[Unknown Shareholder]: Obviously valuation will play a part. But, if they do not agree to buy, there would be a second option of appointing a merchant banker and doing an offer for sale or selling the-

Bimal V. Mehta: I agree, but you know what?

Speaker #3: I mean, what we see is that they should be ready to accept another shareholder who is coming in, because the condition of the agreement is very clear that they have to accept the next shareholder, whoever we are selling to.

[Company Representative]: We see, but

[Unknown Shareholder]: We see, but

Bimal V. Mehta: They should be ready to accept another shareholder who is going, because the condition of the agreement is very clear that they have to accept the next shareholder, whoever we are selling to. If they say that we are not right now interested in any other shareholder in Transpek, naturally we will not be able to sell.

Speaker #3: And if they say that we are not, right now, interested in any other shareholder in Transpek, naturally we will not be able to sell.

Speaker #3: So, I'm saying, Prashant bhai, you have to understand this. Like you, we are also professionals. We are investors in this business. We know the value of ₹300 crore cash that could be in your KT, and there are so many things that you can do.

[Company Representative]: I am

Bimal V. Mehta: See, Prashant bhai, you have to understand this. Like you, we are also professionals. We are investors in this business. We know the value of INR 300 crore cash that could be in your kitty and what so many things that you can do. As I said, I definitely respect everybody's sentiment, but if it would have been as easy as it looks, then we would have already encashed, and we would be sitting on that cash, or we would have invested that cash probably in acquisition or something else. But it is not that easy, and just being on the board does not entitle us to exit out of that investment.

Bimal V. Mehta: Prashant bhai, you have to understand this. Like you, we are also professionals. We are investors in this business. We know the value of INR 300 crore cash that could be in your kitty and what so many things that you can do. As I said, I definitely respect everybody's sentiment, but if it would have been as easy as it looks, then we would have already encashed, and we would be sitting on that cash, or we would have invested that cash probably in acquisition or something else. But it is not that easy, and just being on the board does not entitle us to exit out of that investment.

Speaker #3: So I as I said I definitely respect everybody's sentiment but if it would have been as easy as it is you know it it it looks then we would have already encashed and we would be sitting on that cash or we would have invested that cash probably in acquisition or something else.

Speaker #3: But it is not that easy, and just being on the board does not entitle us to exit out of that investment. So, I mean, as you said, there are discussions on—can we see, I mean, are we, I mean, what are the next steps that we have planned? Or, I mean, of course, we may have done certain things, but can we expect a resolution or something of that sort in this year for the—?

[Company Representative]: So, as you said, there are discussions. Can we see what are the next steps that we have planned? Of course, you may have done certain things, but can we expect a resolution or something of that sort in this year forward?

[Unknown Shareholder]: So, as you said, there are discussions. Can we see what are the next steps that we have planned? Of course, you may have done certain things, but can we expect a resolution or something of that sort in this year forward?

Bimal V. Mehta: Not in near future. Not that, because they are also now looking at investing heavily in new facilities in Dahej. They have taken a plot in Odisha. They have taken a plot in Dahej. They are planning to invest in new facilities. So I don't think that they are going to be ready to part with cash so fast.

Speaker #3: Not in the near future. Not that, because they are also now looking at investing heavily in new facilities and they have taken a plot in Orissa.

Speaker #3: They have taken a plot in the H. They are planning to invest in new facilities, so I don't think they are going to be ready to part with cash so fast.

Speaker #3: But we will we will continue to push them. We will continue to make that attempt. Because who would not want as I said you know if if I am getting valuation I mean the the investment valued at 300 crores and I am getting 5 to 7 crore dividend it's not a good business.

[Company Representative]: Okay.

[Unknown Shareholder]: Okay.

Bimal V. Mehta: But we will continue to push them. We will continue to make that attempt. Because who would not want. As I said, if I am getting valuation, the investment valued at INR 300 crore, and I am getting INR 5 to 7 crore dividend, it's not a good business.

Speaker #3: So naturally, dividend yield is, it's nothing. And therefore, I would also like to, you know, get this money, but it's, it's, it's complex.

[Company Representative]: Actually, the dividend yield is my last.

[Unknown Shareholder]: Actually, the dividend yield is my last.

Bimal V. Mehta: Exactly. It's nothing. I would also like to get this money, but it's complex. It's complex, Prashant bhai.

Speaker #3: It's complex, Prashant bhai. And my last question is on the margin side—specifically, the EBITDA margin. I mean, we export 87 percent, or roughly 80 percent, of our products.

[Company Representative]: My last question is on the margin side, EBITDA margin. We export 87% or roughly 80% of our products. We have expertise in complex chemistries. We have longstanding customers. We have embedded relationship and established relationship. We are pioneers in certain products. All put together, that is not reflecting in the margins. What is our target? You have mentioned that you are expecting 15% to 20% growth this year. I hope that will be volume plus value. What is the margin trajectory we are looking for? In terms of are we looking at a certain hurdle rate that if these margins are not made, not achievable or possible, we will not go into that product category or something of that sort? Your views, please.

[Unknown Shareholder]: My last question is on the margin side, EBITDA margin. We export 87% or roughly 80% of our products. We have expertise in complex chemistries. We have longstanding customers. We have embedded relationship and established relationship. We are pioneers in certain products. All put together, that is not reflecting in the margins. What is our target? You have mentioned that you are expecting 15% to 20% growth this year. I hope that will be volume plus value. What is the margin trajectory we are looking for? In terms of are we looking at a certain hurdle rate that if these margins are not made, not achievable or possible, we will not go into that product category or something of that sort? Your views, please.

Speaker #3: We have expertise in complex chemistries. We have long-standing customers. I mean, we have embedded relationships and established relationships. We are pioneers in certain products.

Speaker #3: All put together, that is not reflecting in the margins. So, what is our task? I mean, you have mentioned that you are expecting 15 to 20 percent growth this year.

Speaker #3: I hope that will be volume plus value. What is the margin trajectory we are looking for and in terms of are we looking at a certain hurdle rate that if this margins are not made not achievable or I mean possible we will not go into that product category or something of that sort.

Speaker #3: Your views, please. See, there are—I mean, you probably know more than me—the chemical industry dynamics. You show me one company which has been largely consistent at a 15% EBITDA margin over the last eight to ten years.

Bimal V. Mehta: You probably know more than me, the chemical industry dynamics. You show me one company which has been consistently, largely consistent at 15% EBITDA margin over last 8, 10 years. You will not find a single company in chemical space, except maybe very rare. Even the largest ones have undergone 20%, then 9%, then 7%, then 11%. Transpek is largely consistent in terms of EBITDA margin of 15%, which is considered to be, in my view, a very good, reasonable level of margins. Moving forward, we are expecting same level, anywhere between 15% to 20%. The reason is that currently the whole situation is so volatile. You are buying a raw material today at $2,600 to a ton. Within 10 days, it goes to $4,000 to a ton. No customer or no market will be able to bear this kind of increase.

Speaker #3: You will not find a single company in the chemical space, except maybe very rarely. Even the largest ones have undergone 20 percent, then 9 percent, then 7 percent, then 11 percent.

Speaker #3: Transpek is largely consistent in terms of EBITDA margin of 15 percent, which is considered to be, in my view, a very good and reasonable level of margins.

Speaker #3: Moving forward, we are expecting the same level, anywhere between 15% to 20%. And the reason is that currently, the whole situation is so volatile.

Speaker #3: I mean you you you are buying a raw material today at 2600 dollars to a ton and within ten days it goes to 4000 dollars to a ton.

Speaker #3: No customer or market will be able to bear this kind of increase naturally, but you need to sustain your market share. So, naturally, you will have to compromise on margin, and the price will have to be according to that, and your margins will suffer.

Bimal V. Mehta: You need to sustain your market share, so naturally you will have to compromise on margin, and the price will have to be according to that, and your margins will suffer. You can have a choice that, okay, as you just mentioned, okay, the hurdle rate. Today my hurdle rate may be 20%, and I select a product of 20%, but within 3 months, that product may undergo swing of raw material, and it may come to 11%. I cannot suddenly discontinue that product because the chemical industry doesn't work that way. I will have to maintain my market share. Whatever I have captured at 20%, at 11% also I have to maintain and wait for the right opportunity again to get back into that higher margin level.

Speaker #3: So you, we, you can have a choice that, okay, as you just mentioned, okay, the hurdle rate. Now, today my hurdle rate may be 20 percent, and I select a product of 20 percent.

Speaker #3: But within three months, that product may undergo, you know, a swing in raw material, and it may come to 11%. I cannot suddenly discontinue that product because the chemical industry doesn't work that way.

Speaker #3: No, I will have to maintain my market share—whatever I have captured at 20 percent, at 11 percent or so—I have to maintain.

Speaker #3: And wait for the right opportunity again to get back into that higher margin level. So I mean you look at I don't want to name any other company in this call but if individually we meet I will tell you we have analyzed almost 13 14 large and medium size chemical companies and we have not found a single company like Transpec which has undergone which which has been having this consistent margins.

Bimal V. Mehta: I don't want to name any other company in this call, but if individually we meet, I will tell you. We have analyzed almost 13, 14 large and medium-sized chemical companies, and we have not found a single company like Transpek which has been having this consistent margin. These are like the natural aspects of the chemical industry, which is not in Transpek's control, which is not in anybody's control. But whatever best within that we can do, we are doing, and we believe that we are doing a good job at it. Margins, of course, we have to target, and we are targeting 15% to 20% overall margins. It cannot be product-wise same margin. Some products may give more, some products may give less.

Speaker #3: So these are new. These are like the natural aspects of the chemical industry, which are not in Transpek's control, which are not in anybody's control.

Speaker #3: But whatever is best within that, we can do; we are doing, and we believe that we are doing a good job at it. Margins, of course, we have to target, and we are targeting 15 to 20 percent overall margins.

Speaker #3: It cannot be the same margin product-wise. Some products may give more, some products may give less. Understood. Understood. So, put it another way.

[Company Representative]: Understood. Put it in other way.

[Unknown Shareholder]: Understood. Put it in other way.

Speaker #3: Sorry to interrupt, Mr. Prashant. We will take that as the last question for the day. So, are there any products that we have discontinued or certain lines that we have discontinued during the current year, this quarter, or in the previous year?

Operator: Sorry to interrupt, Mr. Prashant. We will take that as the last question for the day.

[Company Representative]: Yeah. Are there any products that we have discontinued or certain lines that we have discontinued during the current year, this quarter, or in the previous year?

[Unknown Shareholder]: Yeah. Are there any products that we have discontinued or certain lines that we have discontinued during the current year, this quarter, or in the previous year?

Speaker #3: No, it's not that we have discontinued anything, but there can be scenarios where the demand may be very low. So, for example, in a particular quarter in the earlier year, the demand for that particular product may have been, say, 100 tons in a quarter, and this time it may be only 20 tons, or 10 tons, or 15 tons in a quarter.

Bimal V. Mehta: No. It's not that we have discontinued anything, but there can be scenarios where the demand may be very low. For example, in a particular quarter, in the earlier year, the demand for that particular product may be, say, 100 tons in a quarter, and this time it may be only 20 tons or 10 tons or 15 tons in a quarter. Those kinds of things can happen. But we have not discontinued any product from our side.

Speaker #3: Those kinds of things can happen, but we have not discontinued any product from our side. Thank you. Ladies and gentlemen, we will take this as the last question for the day.

Operator: Thank you. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

Speaker #3: I now hand the conference over to the management for the closing comments. Thank you very much for joining us on this call. We hope that we have been able to respond to your questions and answer all your queries to your satisfaction.

Bimal V. Mehta: Thank you very much for joining us on this call. We hope that we have been able to respond to your questions, answer all your queries to your satisfaction. As we mentioned, we will continue to do these calls every quarter. Thank you.

Speaker #3: And as we mentioned, we will continue to do these calls every quarter. Thank you. Thank you, sir. On behalf of Transpek Industries Limited, that concludes this conference.

Operator: Thank you, sir. On behalf of Transpek Industry Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

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Q1 2027 Transpek Industry Ltd Earnings Call

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