Operator: Ladies and gentlemen, good day and Welcome to Privi Speciality Chemicals Limited Q2 and H1 FY27 Earnings Conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. From the management, we have with us Mr. Mahesh Babani, Chairman and Managing Director of the company, Mr. R. S. Rajan, President of the company, Mr. Narayan S. Iyer, Chief Financial Officer of the company, Mr. Sanjeev Patil, Executive Vice President, Strategy and Biotechnology, Ms. Ashwini Shah, Company Secretary and Compliance Officer.
Operator: Before we begin the conference call, I would like to mention that some of the statements made during the course of today's conference call may contain forward-looking statements about the company, which are based on beliefs, opinion, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and may involve risks and uncertainties that are difficult to predict. I would now like to hand the conference over to Mr. Mahesh Babani, Chairman and Managing Director of Privi Speciality Chemicals. Thank you, and over to you, sir.
Mahesh Babani: Thank you, ma'am. Good evening, everyone. This is Mahesh Babani. Thank you for joining Privi Speciality Chemicals Q2 H1 2027 earnings conference call. I am pleased to share that we have delivered our strongest ever quarterly performance, notwithstanding very adverse global headwinds. We have achieved our highest ever sales and profitability. At the same time, we have been continuing to build capabilities and will support the next phase of our growth. The performance reflects the strength of our underlying business, the relationships we have built with our customers, and the investments we have made in our manufacturing capabilities. Over the past few years, our focus has been building a broader, more resilient, and more differentiated specialty aroma chemical business.
Mahesh Babani: Reflecting our confidence in the business and our commitments to creating value for shareholders, the board has declared the company's first-ever interim dividend of INR 5 per share of face value, INR 10 for the financial year 2026-2027. We remain encouraged by the opportunities ahead while staying focused on disciplined execution. With that, I would like to invite my team, Mr. Rajan, Sanjeev, and Narayan to discuss our operational development and the progress we are making across our expansion and product initiatives. Thank you.
Sanjeev Patil: Thank you. This is Sanjeev Patil. Good afternoon to all the investors. As Mahesh bhai mentioned, we have achieved our highest ever quarterly total revenue of INR 773 crore and EBITDA of INR 212 crore. This performance has been delivered against a global backdrop shaped by geopolitical uncertainty, changing trade flows, and volatility in the input and logistic cost. At the same time, customers continue to place strong emphasis on dependable supply and consistent quality. For a global specialty aroma chemical suppliers like Privi,
Narayan S. Iyer: Am I audible now?
Operator: Yes, sir.
Narayan S. Iyer: Can I start with the financial thing?
Operator: Yes, sir.
Narayan S. Iyer: Good evening to every one of you, and thank you, Mahesh bhai, thank you, Sanjeev, for the insights. And a warm welcome to all my investors in this Privi Speciality Chemicals Limited Q2 Earnings Call. I am Narayan S. Hegde, the Chief Financial Officer, and would like to give certain highlights with regard to the financial performance. I am pleased to report that Q2 for financial year 2026-2027 was a record quarter in terms of both sales and profitability. This is an important milestone and reflects the strong operating momentum of our business and our company. Q2 in financial year 2026-2027 extended our strong operating momentum with a total income of INR 773.16 crore, up 13.9% year-on-year. EBITDA achieved was INR 212.49 crore, up 16.66%, and a profit after tax of INR 117.03 crore, reflecting a 24.61% growth over the previous year.
Narayan S. Iyer: These performances were supported by broad-based demand across domestic and export markets, reflecting the resilience of our business model and our continued focus on achieving a higher profitable growth. In the previous year, out of the total revenue that we earned, an amount of INR 9 crores was on account of state incentives received, and during the current year, an amount of INR 1.62 crores have been received. We expect to receive more going forward during the financial year. All our expenses during the year have been under control and, in fact, has come down. As we compare as a percentage of sales, it works to 9.72%. This has been possible due to the constant and focused monitoring of expenses and optimum utilization of our capacities, thereby reducing the fixed cost over a larger base. This has helped to ensure maintain our margins.
Narayan S. Iyer: Apart from this, the RMC as a percentage of sales has come down to about 52% as compared to 54% in Q1, and as against 51% for September 2025 of the previous year. EBITDA margins remained a healthy 27.48% in Q2 of financial year 2027, as against 26.12% for the H1 to financial year 2026-2027. Despite volatility in feedstock and trade costs and uncertain market conditions, we have been able to ensure to maintain our overall margins during this quarter and for the H1 of the year 2026-2027. We continue to focus on operational efficiencies, disciplined expense management, and improving the quality of our earnings by good product mix. We expect to maintain the momentum of growth in the near future and are working towards achieving our vision set about of the 5K-1K plus and are very confident of achieving the same by 2030.
Narayan S. Iyer: Profit after tax achieved during the Q2 was INR 117 crores, which is up by about 25% year on year, while PAT for the H1 of 2026-2027 was INR 201 crores, up by about 29% compared to the previous year. Now, coming to some of the balance sheet items. Our balance sheet remains strong, supported by healthy financial returns and prudent leverage of operations. As on 30 September 2026, our ROCE stood at 24.30%, an improvement of 216 basis point year on year, while ROE increased by 134 basis point, and we have achieved a figure of 26.34%. Our net debt-to-EBITDA ratio stood at 1.07x, and our net debt-to-equity was 0.51. Together with our focus on cash generation, these metrics provide a sound financial foundation to support our planned investments while maintaining balance sheet discipline.
Narayan S. Iyer: In absolute terms, our net debt as on 30 September 2026 was INR 814.51 crores. Our working capital cycle has also come down to less than 100 days during this quarter from the 124 days which we achieved in the same period in the previous year. Our cash generated from operations for the first 6 months was INR 445 crores, showing remarkable improvement over previous year, mainly on account of higher profits earned during this year. Looking ahead, we will continue to allocate capital towards capacity expansion, new specialty products, and operational improvements while maintaining a strong focus on profitable growth and cash generation. As discussed earlier by both Mr. Mahesh bhai and Sanjeev Patil, our capacity expansion program and the development of our specialty portfolio remains an important enabler for our long-term growth ambition.
Narayan S. Iyer: We hereby reiterate that Privi is confident of achieving a growth going forward, and we expect to maintain the 20% growth overall in the coming years. Thank you, everyone. With that, I would request the moderator to open the floor for questions. Thank you.
Operator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Krish Salot from Veer Growth AIF. Please go ahead.
Krish Salot: Good morning, sir. I had just two questions regarding the one as-
Operator: Sir, can you please be a little more loud?
Krish Salot: Hello? Am I audible now?
Sanjeev Patil: Sir, we are not able to hear you.
Krish Salot: Just this. Hello, am I audible?
Sanjeev Patil: Now you are audible.
Krish Salot: Yes. Sir, based on our commissioning, so debottlenecking plant that was going to commission by 26 September, hasn't been commissioned, and what would be the utilization when we can see a ramp-up in that particular debottlenecking expansion that we did?
Sanjeev Patil: Sure. The expansion has been completed. Can you hear me? The expansion has been completed.
Krish Salot: Yes.
Sanjeev Patil: Yeah, the expansion has been completed. You will see part of it coming through in Q3, but a significant part would come in Q4 because that's when the new contracts really start, which are annual contracts. We are very positive about those contracts, and you will see significant impact of that capacity utilization of almost 85% to 90% during that quarter for the expanded capacity also.
Krish Salot: So sir, we will be looking to expand a bit more debottlenecking capacity in Q4?
Sanjeev Patil: No, the capacity expansion has been completed. I am saying that the volumes will come in Q4 when we get the new contracts. So, in Q4, you will find significant volume growth.
Krish Salot: Okay, sir. Okay. Secondly on the questions was that what would be our asset turns and how are we looking to improve our asset turns further?
Narayan S. Iyer: Asset turnover has already been improved and it is really doing well. As informed, going forward with the new molecules coming in and the high specialty chemicals also setting up, we expect a better asset turnover going forward in the phase II and phase III also. As we speak, our asset turnover is at 1.7 times on the fixed assets, in fact.
Sanjeev Patil: You can see into ROCE, the ROCE is at 25%, almost 24.3%, which is reflection of how well we are using our assets, including both working capital as well as fixed assets. Yeah?
Krish Salot: And sir, just one last question. Last quarter, I had asked you regarding the new kind of JVs, and you had given us some understanding that we are working on two new partnership that we are signing, and we were close to signing those partnership kind of agreements, strategic agreements. So, have you signed that agreements, and what is the status for this thing?
Sanjeev Patil: So, we are working on those. It takes time, as you know, and it is work in progress. In due course of time, we will inform you about those. But we are obviously working on the opportunities, and there are opportunities on hand.
Krish Salot: Okay. Okay. And sir, lastly, are we facing some raw material tension from the freight perspective because of still the extended war scenarios in the West Asia region?
Sanjeev Patil: As we always maintain that two-third of our revenue, almost 70% of our revenue comes from non-petroleum source raw materials. So, we do not have significant impact of this war and the situation like that. Yeah.
Krish Salot: Okay, sir. Thank you so much.
Sanjeev Patil: Thank you.
Operator: Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Ram Aravind from iThought PMS. Please go ahead.
Ram Aravind: Hello. Hi. Yeah, am I audible?
Narayan S. Iyer: Yeah, yeah.
Operator: Yes, sir.
Ram Aravind: Yeah. My first question is on the growth guidance that we have. If I am not wrong, for the past three, four quarters, we have been guiding about 20% growth, right? H1 actually grew about 15%. If we have to reach 20% for the close of FY27, we would have to be growing way above 22% or 23%. Does the management still hold that 20% guidance?
Narayan S. Iyer: Yeah, we still continue to maintain the 20% guidance. As you are aware that normally the H1 is lower than the H2 for us, and we are confident of showing a 20% growth on an annual basis. We have always been reiterating that you have to look at us as in yearly numbers rather than only looking at quarter-on-quarter performance.
Ram Aravind: Right. Just to follow up on that, any specific segments that you see the growth coming from? We know that pine is the largest segment, but apart from that, do we see any other specific segment where this growth is going to come from?
Narayan S. Iyer: As informed, the overall utilization of all our plants has been around 85% to 90%. So we expect to maintain the momentum of growth in all. Mahesh bhai will also add to
Mahesh Babani: See, our market's usage of aroma chemicals is increasing significantly.
Ram Aravind: Right.
Mahesh Babani: Lots of new things are coming. New people are using more and more pine. Africa market is growing, so for us, we supply to customers who supply to Africa. So the markets are really growing well, and we hope to maintain the 20% target as committed.
Ram Aravind: Do you want to comment on any particular segments that this growth is coming from, or?
Sanjeev Patil: We do not give any segmental guidance, but overall, we will be able to maintain that 20% growth.
Ram Aravind: All right, sir. Understood. The second question will be on the phase II and phase III CapEx plan. Can you just give us a timeline as to when we could see this finishing up, and when will we see commercial production for the chemicals that are going for this CapEx?
Sanjeev Patil: Phase II will happen, and it will be effective, available for commercial sales from H2 of next financial year. We are planning to complete everything by June, and from September onward, because there will be trial production and all of that. From H2 of next financial year, we are looking to have additional revenues as well as margins from the new expansion.
Ram Aravind: Right. Is this for the furfural-based derivatives, or is that separate?
Sanjeev Patil: That is correct. That is furfural-based derivatives, maltol, ethyl maltol, cyclopentanone, and a couple of speciality molecules as well.
Ram Aravind: All right, sir. All right. I will get back on the queue if I have another question.
Sanjeev Patil: Surely. Yeah.
Operator: Thank you very much. The next question is from the line of Sudhir Bheda from Bheda Family Office. Please go ahead.
Sudhir Bheda: Yeah. Good afternoon, and hearty congratulation to entire Privi team for posting the outstanding results under the very volatile circumstances that right now we are experiencing in terms of
Sanjeev Patil: Thank you, sir.
Sudhir Bheda: freight rate and also volatility in the market, European and US as well. My first question is, sir, there is a slight bit of dip in the EBITDA. If we strip off the other income, there has been a slight dip in the EBITDA compared to last year. Is it a case where last year, I think you have said that we have received some incentive, CapEx-based incentive. What is this year's position? Have we received the incentive, or incentive is yet to come?
Narayan S. Iyer: Good evening, sir. As indicated, we have received in this H1 only INR 1.62 crores, as against INR 9 crores that we received in the previous year. We expect to receive more incentive going forward in the next six months or so, in fact. So the amount will be, I think, higher than what we have earned in the previous year. That is one part. Second, with regard to the percentage dip that you talked about, I tried to clarify in my speech, because if you remove the INR 9 crores, what was also considered as a revenue, vis-a-vis the INR 1.62 this year, if you see the RMC as a percentage is about 52% in this quarter, and the previous year, likewise, if we do, it comes to about 51%.
Narayan S. Iyer: As you know, 1%, 2%, because of so much of CST and GTO coming from various mills from various locations, there could always be that factor that will come about, in fact. However, we were able to ensure to maintain and improve the EBITDA margins on the other expenses, because with the higher base that we have been able to do, we have been able to amortize the fixed expenses, and that is how the EBITDA margins have improved, in fact.
Sanjeev Patil: Also, conversion of EBITDA into PAT also has been improving, if you see, for the last four or five quarters, which reflects that we use assets much better, and also the interest cost also is coming down. As a result, from EBITDA to PAT, also our conversion has improved significantly in the last four quarters.
Sudhir Bheda: Yes, sir. EBITDA to cash has also improved because your cash from operation has gone to 360 level, which is very good.
Narayan S. Iyer: Yes, that is correct. Yes, sir. That is correct, sir. Yes, sir [crosstalk].
Sudhir Bheda: Yeah. Sir, can you quantify what is the balance outstanding incentive which we are likely to receive in the next two quarters?
Narayan S. Iyer: The amount should be in the range of about INR 12 to 15 crores.
Sudhir Bheda: Great, sir. And, sir, for the next year, what is your guidance for the year 2027-2028, as far as revenue growth is concerned, and also, if possible, EBITDA guidance, if you can give?
Mahesh Babani: We have a very positive outlook. We are confident of maintaining 20% or beating 20%, to be honest.
Sanjeev Patil: Yeah.
Mahesh Babani: We are confident that we will be able to be close to 4,000, maybe 3,750 or some number. But we are close to guidance what we have given. 20% will be surely maintained, and we have got the first cut from the customers that they are going to buy more. We are happy to say that our guidance is positive outlook.
Sanjeev Patil: Yes. Also, we will be able to maintain the EBITDA margin where we are right now. That is the guidance on the EBITDA.
Sudhir Bheda: Great, sir. Great. Congratulations and all the best. Thank you.
Mahesh Babani: Thank you, sir.
Sanjeev Patil: Thank you.
Narayan S. Iyer: Thank you.
Operator: Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Yash from Avira AMC. Please go ahead.
[Analyst] (Avira AMC): Yeah. Hi, sir. Thank you for the opportunity, and congratulations on a great set of numbers, sir. My question is more from a macro perspective or industry perspective.
Narayan S. Iyer: Thank you.
[Analyst] (Avira AMC): We have been hearing a lot about the various headwinds that the European markets are facing. How, as a company, do you think we can benefit from this situation of the labor crisis, the energy crisis, and such?
Sanjeev Patil: We always maintain that we touch your life every single day, and we are in products which we use on a day-to-day basis. To that extent, some of these crises that we talk about may not affect us. In terms of our future outlook, we see great opportunities coming forward because all those things that you mentioned create huge amount of opportunities for manufacturers in India who are compliant, who are quality-conscious, and who follow all the sustainability norms. As a result of that, Privi is well-positioned to capitalize on all these opportunities, and that is why we are so positive about the future. We have been delivering that. This H1, we have done a growth of 15%, and we are confident that end of the year, the growth will be 20%.
Sanjeev Patil: We see substantial opportunities coming on our way, and we are well-positioned. We have created enough infrastructure to capitalize on that.
[Analyst] (Avira AMC): Understood. Understood, sir. Thank you. Thank you so much.
Operator: Thank you very much. The next question is from the line of Mahima Gidwani from PhillipCapital PMS. Please go ahead.
Mahima Gidwani: Hello. Thanks for the opportunity. Congratulations on the good set of numbers. My first question is on the freight cost. Do our contracts with customers include a fixed freight cost built in, or can we pass through any adverse variation to the customers? Also, are you experiencing any challenges in the CST procurement due to disruption in the shipping routes because of geopolitical situations?
Sanjeev Patil: Okay. Answering the second question first, we are not seeing any challenges there in terms of procurement of our raw materials. Okay? Now, coming to the first question, I think Narayan will guide you.
Narayan S. Iyer: As far as the freight costs are concerned and passing it on to the customers, as informed in the earlier, some of the investor calls, we learned from our mistakes in the past, and now, definitely when we also enter into contracts, we ensure to have a quarterly pricing mechanism for the freight. If at all there is a freight which is exceeding and increasing drastically, definitely we are in a position to go back to our customers and ask for that increase or decrease, whatever it may happen around. Having said that, and also reiterating that freight for us, the disturbance has not been to that extent what others are facing currently, in fact.
Mahima Gidwani: Okay, got it. Last thing on the margins question. The margin profile of the new products that will be coming in the next few years, so are the margin profile on these products at similar level as current ones, or can we be expecting the margins to [inaudible].
Sanjeev Patil: We expect the margins to continue in the range at which we are right now, okay? For the new products coming up.
Mahima Gidwani: Okay [inaudible].
Operator: Thank you very much. The next question is from the line of Nirav Gandhi from Sunidhi Securities. Please go ahead.
Nirav Gandhi: Hello? Am I audible?
Narayan S. Iyer: Yes.
Nirav Gandhi: Yeah. Thank you for the opportunity, sir. My first question is on other income. We have seen a higher number in Q1 and Q2. Is there any specific reason for the same?
Narayan S. Iyer: Yes, sir. Good evening, Nirav. This is Narayan here to answer that. Prima facie, a reason that our exports are high, and you know that dollar has been in our favor, and being a net exporter, it always helps us around. So the other income, prima facie, consists a major part on account of foreign exchange gains, in fact.
Nirav Gandhi: Got you. The second question is regarding the EBITDA margins. If we see Q2 FY27 with Q2 FY26, both these quarters have seen EBITDA margins in excess of 25% and 26%. Is there any seasonality in terms of EBITDA margins?
Narayan S. Iyer: Here also, I explained in maybe a little different pattern. Last year, the said Q2, we were able to get that INR 9 crores of state incentives. That is why that a little bit of EBITDA margins also improved on account of that. We were also helped with overall RMC prices used from the inventory. That was the reason that we had this. Definitely higher volume of sales achieved in this quarter because this quarter normally is a better quarter for us as compared to Q1.
Sanjeev Patil: Yes, there is that. What you are saying is right. It cannot be called a seasonality, but if you look at our last four, five financial year, Q2 has always been superior in terms of financial numbers. One of the key reason for that would be that we often get second calendar year contracts with some of the customers, and newer products come in, and that is how it results into better margins and better profitability.
Nirav Gandhi: Right, sir. If you can share the volume growth numbers for Q2 and H1 FY27. A rough guidance would be helpful.
Narayan S. Iyer: Broadly, Q2, there has been a growth of 4%, and overall on H1, if you have to talk about last year vis-à-vis the current year, the growth has been in the range of about 7% and 7.5% or so.
Nirav Gandhi: Right, sir. So that 4% in Q2 is on a year-on-year basis, right? Growth volume growth.
Narayan S. Iyer: That's correct.
Nirav Gandhi: And sir, revenues from Privi joint venture, revenues and EBITDA?
Narayan S. Iyer: As indicated by Mr. Sanjeev Patil, in this quarter, we have achieved a sales of about INR 28 crores with a positive PBT of about close to INR 2 crores or so. Overall, for first 6 months, we have achieved a sales of about INR 47 crores and a negligible loss of INR 0.02 lakhs or so, in fact.
Nirav Gandhi: Got you, sir. Sure. Yeah, thank you. That is it from my side. Thank you so much.
Narayan S. Iyer: Thank you. Thank you, Nirav Gandhi.
Operator: Thank you very much. The next question is from the line of Nikhil Porwal from Perpetual Capital. Please go ahead.
Nikhil Porwal: Yeah. Hi. Good evening, everyone. Congratulations to the entire team for posting a strong set. My first question is on the working capital cycle. Narayan, I think you are trending close to 90 days now, and this was at almost 160 days three years ago. Are we at the bottom now, or maybe we see a slight increase in coming times?
Narayan S. Iyer: Nikhil, hi. You have done a good analysis, I should say that. Thanks. You have been always a good well-wisher, so are all the other investors. Yes, definitely this time. That is the reason in my speech also I muted it by saying less than 100 days or so. You should, on a long term, on an annual basis, expect a working capital cycle in the range of about 105 to 110 days, broadly.
Nikhil Porwal: Okay. There is also a decline in your debtors. I mean, the receivables has declined versus March, while the sales have moved up. Have you changed some terms with your customers, or what is the reason for this?
Narayan S. Iyer: Sir, I have to say that Privi stands for the quality on delivery time, and expectations of the customers have been so good with us that they have been helping us in ensuring that the money is paid to us on time, and in some cases, maybe a few days before time also. That is the reason why you see receivables have come down in this H1.
Nikhil Porwal: Okay. The next question is on, so the expected deleveraging in Privi. I think you all are looking to convert the debt into an advance or something. I do not know. Has that already happened, or it is yet in process?
Narayan S. Iyer: Sir, it is in process, in fact. It is in process. It takes some time when we are talking with large multinational companies.
Nikhil Porwal: Okay. Sure, looking forward for strong performance in coming times. Best of luck.
Sanjeev Patil: Yeah, thank you.
Narayan S. Iyer: Thank you. Thanks, Nikhil.
Operator: Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Krish Salot from Veer Growth AIF. Please go ahead.
Krish Salot: Hello, sir, and thank you for taking my question again. I just wanted to know more on the merger of Privi Fine Sciences and Privi Biotechnologies. In the earlier two years back when we had decided that we are going to do this merger, our plan was that Privi Fine Sciences can do around INR 100 crores of turnover by FY25. However, we still see that it's doing around close to INR 68 crores of turnover in FY26 and around INR 34.28 crores of loss. So post-merger, we can see some effect on our consolidated books, and how are we seeing that those utilization and those ramp-up can improve? Because the maximum target was around INR 300-odd crores of revenue from that particular plant.
Sanjeev Patil: Yeah. You are right, Krish. We are given that guidance. It is waiting for some regulatory approvals. Otherwise, in terms of products, we are good. But in terms of some regulatory approvals, we face some delays, which are now nearing completion so that next year you'll see significant improvement in these numbers. But what is important is that we have five different products, out of which four products are already being supplied to the top multinationals. We have not been able to expand the capacity because of those regulatory approvals that I'm talking about. So which would be in place during the next few months, and then next financial year, you will definitely see numbers which are closer to what you said.
Krish Salot: But, sir, can you just give me some understanding what would be the utilization over there right now, at what capacity, and the product portfolio that particular capacity holds?
Sanjeev Patil: We don't normally give product names around that, but these are products based out of isobutylene and other things. And capacity utilization is as much as 85%. We are not able to expand the capacity. Everything is ready, but there are some permissions which we are waiting for. Once those are in place, then the expansion will happen.
Krish Salot: We'll conduct some debottlenecking or some additional capacity over there, apart from the CapEx plan that we have given already, and the-
Sanjeev Patil: That is correct. But then you require permissions for expanding capacity also, from the Pollution Control Board and others, which are expected anytime now. Once we have those in place, then it will result into expanded growth.
Krish Salot: Understood. Just, sir, one last understanding on that, the capacity over there will be around 6,000 MTPA?
Narayan S. Iyer: That is correct. Krish, to answer you specifically, yes, the capacities are already put in place. That is what Mr. Sanjeev Patil is trying to say. We have about 6,000 tons of capacity which is there, which can possibly give us a potential revenue of about INR 300, INR 350 crores, which we have been talking about, basis the prices that is there. Certain regulations, certain things which are in our pipeline, we expect those bottlenecks to be resolved as we speak. By the time the entire merger process happens, which we expect that it should happen before this financial year ending, we will be in a position to really go all out on manufacturing and achieve the so-called 80%, 85% of the capacities, so that our revenue from so-called INR 100-odd crores, what we could achieve, can go to the INR 250, INR 300 crore mark, in fact.
Krish Salot: Okay. But sir, currently also we are doing around 85% utilization, I guess, if I heard it right. Why is there a loss of around INR 34 crores at that level?
Sanjeev Patil: The full capacity is not yet realized. That would be realized only when we get those permissions, and that is when it will break even and be in black.
Krish Salot: Okay, sir. Okay, sir. Thank you so much, sir. That is one of the understanding. Thank you.
Operator: Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Aniruddh Sharma from Ekant Investments. Please go ahead.
Aniruddh Sharma: Good evening, sir. Am I audible?
Sanjeev Patil: Yes.
Operator: Yes, sir.
Aniruddh Sharma: Yeah. I just had a couple of questions. First question is on the CapEx front. What is the total remaining CapEx, and what is the expected commissioning timeline and incremental revenue potential that you are seeing from the ongoing projects?
Narayan S. Iyer: Okay. As mentioned by us and also indicated in the investor presentation, the overall outline for all the three phases put together was close to about INR 1,400 crores. The phase 1 is already completed, and some of the phase 2 also, we have incurred expenses. Broadly, as we speak, we expect INR 1,000 crores going forward to be spent on phase 2 and phase 3. All these three phases put together has a potential revenue to be generated of about close to INR 1,700 to INR 1,800 crores or so.
Aniruddh Sharma: Okay, sir. Understood. Additionally, how much revenue contribution can we expect from maltol, ethyl maltol, and other specialty chemicals over the next two, three years? If you can give some indication on that front.
Narayan S. Iyer: That is what I indicated, right? The phase 2 is going to be the maltol, ethyl maltol, furfural, cyclopentanone, what Mr. Sanjeev Patil was saying. This is the phase 2 of expansion, which we expect it to be completed next year between June and September. The revenue contribution will start from October 2027 onwards. We expect that entire phase 2 to contribute about close to INR 1,000 crores of revenue once it is in full capacity of 12,000 metric tons. Phase 3, as we are talking about, where we indicated a broad CapEx of about INR 400 crores, INR 400 to INR 425, that will give an additional revenue of close to another INR 450 to INR 500 crores, broadly about that. This INR 1,000 plus that INR 500 of the specialty and the phase 1, which has the potential of generating about INR 450 crores.
Narayan S. Iyer: So, if you add this up, all these 3 phases of CapEx will give us a revenue of about INR 1,900 crores. And we expect this INR 1,900 crores to be completely in sync. By 2030, it should allow our company to reach the INR 5,000 crore mark.
Aniruddh Sharma: Understood, sir. Understood. So, that's it from my side, sir. Thank you for the opportunity.
Sanjeev Patil: Thank you.
Narayan S. Iyer: Thank you, Ekant.
Operator: Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Dharmendra Dave from JM Financial Limited. Please go ahead.
Dharmendra Dave: Yeah. Thank you for the opportunity and congratulations on a good set of numbers, sir.
Sanjeev Patil: Thank you.
Dharmendra Dave: Yeah. I just wanted to know on the initial, how has been the response on the client for the next year contract? Are they worried? Are they confident of increasing the offtake from there? What is the sense on the trade?
Sanjeev Patil: No, as you can understand, this is a bit proprietary, so I will be very guarded in terms of what I am saying. But situation is extremely good. All is well and better, you know? So, we are seeing very positive outlook for the market and for our customers. Please appreciate, I cannot be more open than this at this scale. Yeah.
Dharmendra Dave: All right. Okay, sir. I got it. Understood. And since next year this new capacity is coming on stream, so maybe probably nearer September, October 2027, are there any offtake tied up on this business as well?
Sanjeev Patil: We are working on all of that. So, the way we do it is, during this one year that we would be putting up this project, we would be manufacturing these products on pilot basis and selling it to our customers so that in terms of quality, in terms of various other issues, those are all sorted out by the time the commercial production starts, you know? And the response is positive, very positive.
Dharmendra Dave: Okay. Should I understand that approval cycle and everything is ongoing currently and then by the time-
Sanjeev Patil: Absolutely. Absolutely.
Dharmendra Dave: Understood. Understood. That is it from my side. Congratulations.
Operator: Thank you very much. The next question is from the line of Bhavesh Chainani from Equities. Please go ahead.
Bhavesh Chainani: Hello? Hello? Can I help you?
Narayan S. Iyer: Yeah, yeah.
Bhavesh Chainani: Hello, sir. Thanks for the opportunity. My question is on your JV side. You rightly mentioned that in this quarter, your JV has earned a revenue of INR 28 crores, right? On the full year basis, what kind of revenue can we expect from the JV?
Sanjeev Patil: In the JV, we are looking at two phases of expansion. One is already underway, and based on that, we see a revenue of around INR 225 crores and somewhere there. There is also a third phase on which we are right now working. We are doing some pilot studies, we are doing some feasibilities. If that is completed, then about that guidance we can give only after 3 months or more like 6 months, you know? Because we are right now working on that in pilot. We are working on the economics and financials. Once that is in place, then we can go beyond INR 225 also. But surely, we are confident.
Bhavesh Chainani: INR 225 crores is a guidance for FY27, right?
Sanjeev Patil: Yeah. Yeah.
Bhavesh Chainani: Okay, sir.
Sanjeev Patil: FY27, FY28.
Bhavesh Chainani: 27, 28. Okay, sir. My second question is on your CST and GTO side. That is being imported, right? On that case, is there any concentration of the suppliers from where it is being imported right now, or it is diversified?
Sanjeev Patil: It is very diversified sourcing. Very diversified.
Bhavesh Chainani: Okay. All right, sir. That is it from my side. Thank you.
Operator: Thank you very much. As there are no further questions, I would now like to hand the conference over to Mr. Narayan Iyer for closing comments.
Narayan S. Iyer: Thank you. On behalf of Privi Speciality Chemicals Limited and the management, I would like to thank everyone for taking the time to join us on this call. It has been a pleasure interacting with all of you, especially backed with sound financial numbers put forth by the entire team of Privi. I look forward to engaging with you all very soon. Meanwhile, I wish you and all your families a very happy Diwali and a wonderful New Year, and compliments of the season. Thank you, everyone. Once again, have a great day. Good evening.
Operator: Thank you very much. On behalf of Privi Speciality Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
