Ladies and gentlemen, good day, and welcome to Sudarshan Chemical Industries Limited earnings call for Q1 FY 2027 financial results. Please note 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. Please note that this conference is being recorded. With that, I hand over the call to Mr. Ranjit Cirumalla from IIFL Capital. Thank you, and over to you.
Thank you, Supleen. Good morning, everyone. Ranjit Cirumalla here from IIFL Capital. We are pleased to host the conference call with the management of Sudarshan Chemical Industries Limited to discuss earnings performance, followed by an interactive Q&A session, post declaration of its Q1 FY 2027 results. From the management we have with us today, Mr. Rajesh Rathi, Chairman and Managing Director, Mr. Amitabha Mukhopadhyay, Non-independent Non-executive Director, Mr. Nilkanth Natu, Chief Financial Officer, and Mr. Amey Athalye , Vice President, Finance. I now request Mr. Rathi to begin the proceedings. Thank you, and over to you, sir.
Thank you, IIFL Capital and Ranjit for hosting us. It is a pleasure. Thank you all for spending your valuable time in joining this call. Truly excited to share our journey with you. Giving a small introduction to people who have joined the first time on the call, giving you some background. More than 18 months ago, March 25, Sudarshan merged their business with Clariant. First point, Clariant and Heubach together to form one of the most value-creating pigment leaders rooted in customer centricity and agility and innovation. Right? This new entity would really create a new benchmark for the color industry. In total, just to give you a footprint, now totally globally, we have 19 manufacturing sites in 11 countries in five continents. Right? We have products more than 1,600, more than 4,000 global customers.
A turnover close to EUR 1 billion and on the way to really boost our EBITDA. If you see, our plants are very well spread across the globe, but the most competitive advantage for Sudarshan against any other player is that more than 60% of our assets, 55%-60% of our assets are based in Asia. Right? That is a big competitive advantage for us, and this is the spread of our global manufacturing footprint. We also are very proud of our technical marketing centers, and we are able to, again, this provides us to provide a differentiated solution to our customers. Giving you all some flavor before I actually go on to the Q1 performance. I wanted to give you a flavor on how the integration is going and what gives us the confidence that it has really laid down a very strong foundation.
It's been a remarkable transformation journey for Sudarshan, and I've been blessed with leading this journey. If you go two to three years ago, our sales were in the tune of about INR 2,000 crores, with the EBITDA in the range of INR 200 crores to INR 250 crores and a net debt of about INR 800 crores to at a peak, let's say INR 950 crores to INR 1,000 crores. Today what we are, we are almost 4x the revenue, 4x our EBITDA, and our net debt is reduced by 60%. What we aspire to be is really 7x of what our EBITDA was in 2023. And also reach a debt-free level, and that's our aspiration as going forward. Just to remind you, when we took over this business, this business was driven by silos, regions, and there was no unified culture or a unified approach.
What we feel very proud that we've created this one Sudarshan culture, one aim, one goal for every one of us to work towards. We're very happy and proud to say that we have opened our second global headquarters in Frankfurt. There were critical gaps in the leadership pipeline. If you look at finance, HR, legal, IT, supply chain, there were very big, critical gaps, and we've been able to get very good talent now and set up a very good organization structure. Again, that gives us a great confidence to boost our governance and our plans. There were complete lack of harmonized reporting systems. We're still working on more than four different SAPs, 113 different applications. This adds to a lot of complexity and very difficult to get any financial information.
What we are moving towards, we set up a very good interim MIS, but we are moving towards advanced One SAP project. We are well advanced with the One SAP project. We call it Project Integra, and we expect to go live with our integrated system and reducing a lot of complexities in this financial year. When we started looking at the business, the EBITDA was almost zero. Today, we have registered a strong EBITDA in Q1 of the acquired group of INR 146 crores in Q1, and feel very happy and satisfied with this performance. There were big cash flow issues, very high debt in the books when we acquired the business. Very glad to tell you that we have already been able to reduce the debt to five.
From the peak of when we took over the business, peak was at INR 922 crores, and we have brought this down in less than 18 months to INR 531 crores, and this journey will continue. Some of the priorities which we have looked at, customer centricity has been at the core. We have been expanding, co-developing our products. Our technical marketing is doing a great job, and product management to create partnership with our customers. This makes a big difference. We have now set up a customer service world-class organization to ensure that the customer service is top-notch. In terms of value capture or cost reduction, this has been a continuous focus and one of the most important areas along with customer centricity, which we've been driving. Today's performance which we see is majorly backed by this initiative.
In terms of the org and operating model, we have set up a global capability center in Pune. We are also ensuring that we build center of excellence in this global capability center. One culture, I have described this, what we are doing, and we have also set up second global headquarters. I spoke about SAP, and I think we are very happy that we would be going ahead and completing Project Integra or the One SAP project in this financial year. Coming now actually to the Q1 numbers. First, I think looking at a little bit of the released crisis. As you all are aware, we are not very different to face these issues. We have faced energy cost spikes everywhere, in Europe, in India, where our substantial assets are based. We have seen substantial increase in raw material costs.
Logistic costs have increased some, but more importantly, this whole logistic cycle has increased by two weeks. Because of so many uncertainties, many customers across industry have been delaying their purchases. They do not want to create stocks, et cetera, from that perspective, and that has been one of the areas. What we have done to address each of them is our procurement has ensured that we have enough safety stock so that the continuity of business is there. At the same time, supply chain is ensuring that we have the right inventory at the right place so that we do not overstock and have high cost inventories. Logistics, we had to increase some of our inventories in our subsidiaries because the longer logistic times. Sales, we are working very closely with customers to ensure that we deliver the best solution.
If you look at our Q1 performance, the Q1 performance has been very robust. There are three areas. One is first four columns group, which I talked about legacy Sudarshan. Then the blue-shaded column comes up with the acquired group, and then the pigment as global. That is just being very happy to share that now the numbers, what we have delivered looks solid, and we are now confident that we can continue building on this journey. Legacy Sudarshan, you see good increase in sales. I would say we should be able to continue our performance in the region of 12%-13% in that ballpark figure from that perspective. In terms of acquired group, given all the geopolitical situation, we have still been able to grow by 5%.
The good part is if you look at the reported and business EBITDA, we have been able to do a very good job in the acquired group. We have grown the EBITDA from, the business EBITDA from INR 65 crores to INR 128 crores. Further reported EBITDA from INR 78 crores to INR 146 crores. As one Sudarshan delivered an EBITDA for the pigment business of INR 275. Ashish Vij, you want to add anything?
Thank you, Mr. Rathi. As Mr. Rathi has mentioned, we started this year with a strong Q1 with a revenue of INR 2,600 plus crores and with the business EBITDA of INR 267 crores. As we mentioned in the couple of quarters a year, we started reporting the business EBITDA. Just to remind, the business EBITDA is the operating profit from the actual sales without the impact of any inventory changes. Reported EBITDA for the acquired group for the quarter under consideration is INR 146 crores and the inventorized overhead impact due to increase in inventory is INR 18 crores. Solo business reported business EBITDA number is INR 128 crores. For the RIECO business, we had one of the tough quarters to start with.
The revenue from operation is at INR 38 crores, and we had faced challenges in the execution due to delays in the customer side readiness and also in some sites due to the subcontracting non-availability. This reduction in the revenue has led to the EBITDA drop. As we mentioned earlier, we are in the transformation journey for the RIECO business. We remain confident about the business and the recovery in the coming quarters. This slide gives the business performance for Sudarshan, including RIECO business. Just to recapture the key numbers, the revenue from operations is INR 2,642 crores with a business EBITDA of INR 247 crores and a reported EBITDA of INR 266 crores for the quarter under review, showing around 60% + growth year-on-year and 5% in terms of the revenue.
In terms of the key financial ratios for Sudarshan, we are in a very healthy situation as far as the balance sheet is concerned. The earning per share for the quarter, which is not annualized, is INR 12.35 per share. Return on capital is at 22.7%, and this is a very strong number. However, just to mention here, the return on capital employed number reported is based on the annualized number. We had a strong quarter to start with, and we expect the year to be also better subject to the seasonality which we normally see in the Q3. As far as the net debt number is concerned, we are at INR 531 crores, and that gives us the good leverage ratio of 0.2 in terms of net debt to EBITDA. Net working capital on an annualized number is at 23.6%.
Overall, on the balance sheet and the key ratios, the performance is good and shows a solid position on the balance sheet.
Thank you, Ashish. Looking at the outlook, I think as we mentioned, we have entered FY 2027 with a strong profitability momentum and a growing conviction in its long-term position as one of the largest global pigment platforms backed by a very broad technology depth and a global manufacturing footprint. I think this kind of sets up on the stage. We also feel much better in control of our business, global business now, and it has set up a very strong foundation for our growth. On an ongoing midterm basis, we have to navigate through the challenging market environment given the current geopolitical situation. We will do that with all prudence. Our priorities still remain very strongly embedded for the year. Value capture remains a very, very important. Cost reduction still remains a very important lever which will drive the growth, profitability growth.
We want to ensure that we are able to release some cash also from the working capital in the remaining year. SAP and GCC again remain a very important priority for us. We feel very confident to deliver the numbers which we had stated, and we had given a guidance of earlier in the year of $700 million for the acquired group and $25 million in EBITDA. Though the Q1 performance has been much stronger. Currently we are not revising our guidance. Given the geopolitical situation, we want to do a wait and watch situation and come back to and reconsider this after quarter. Thank you. Thank you very much and-
Team, can we begin with the question and answer session now? Management team, can we begin with the question and answer session?
Yes. We can.
Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may click on the raise hand icon from the participants tab on your screen. We request participants to restrict to two questions each and then return to the queue for more questions. To rejoin the queue, you may click on the raise hand icon again. We will wait for a few minutes until the question queue assembles. We are taking our first question now. We have Sanjesh Jain of ICICI Securities. Sanjesh, please go ahead.
Hey, good morning, sir. Thanks for taking my questions. I got few of them. First on the Q1 number. Just wanted to understand the underlying growth, because if I adjust for the currency depreciation, because we now have a very large international business which has a translation gain, and the price increase because of the raw material inflation, it appears that this quarter at least, the underlying volume has declined. In this backdrop, we are expecting a very solid growth over next two year, which is over 20% growth at the lower end of the guidance. What gives us the confidence that being a number one player, we will grow at least 2x to 2.5x that of an industry growth rate, while this quarter implies some decline in the volume? That is my first question.
Firstly, I think, great question. I would say that the inference that the volume has a decline may not be very accurate given a very broad spectrum of our product range, right? We sell a product range, right from EUR 1 to EUR 150, EUR 40. We are not able to set that aside. However, given that we have seen a modest growth of 6% this quarter in spite of the geopolitical situation. We must remember that the last year, the Q1 included a lot of sales from the March onwards when we had taken over the business because on the acquired entity, we were going live with some of the SAP areas. So the growth is better than that. What gives us confidence, in delivering growth and EBITDA, I would say, let me talk about firstly EBITDA.
As I mentioned, it is a lot of value capture still coming in. We have not seen the full value capture still flowing into the numbers, right? That journey will continue, and that is completely in our control. In terms of growing of the business, this is a business which has lost a lot of business, and we are looking to recover the business. So we are not saying that we will try and grow completely out of line, et cetera. But there is a lot of scope where we can regain some of the lost business. The business was lost because of various reasons, lack of focus, the insolvency issue, et cetera. So this gives us the confidence of why we would deliver the lost business.
Got it, sir. There is one related question to this. You said that there is a lot of value yet to be captured. When you talk about the value, these are the cost efficiency benefit, and if it is, then how much of this journey from 800 to 1,400, 1,500 will be led by the revenue growth and how much of it is the benefit of the value capturing that we are talking about?
I think the numbers are very clear. A substantial of this could come from cost reduction or value capture initiatives.
Got it. My second question is on the CapEx plan. We have a large capacity. Can you help us in terms of where are we in the utilization cycle, and do we envisage any large CapEx requirement, either from a product development category, new product or backward integration that we foresee in, say, next 12 to 18 months?
From a volume perspective, we do not need any new CapEx, right? We have enough capacities to grow on the numbers which we have indicated. However, we are looking at some special initiative, either backward integration or special projects. These are determined by the ROI, right? If the return is good, we are going to do this. We do not expect anything substantial. There would be some moderate CapEx.
Got it. One last question on the gross profit margin. This quarter we did probably one of the highest margin, which is 54%. How do we see gross profit margin, and was there any benefit of lower inventory which we were carrying, which may normalize, say, going in next one, two quarter. What would be the impact if raw material prices start reversing again, and there have already been a few prices which have fallen down substantially from the peak.
Actually, if you look at the business gross margins, the gross margin will not be that high. The gross margin movement from last quarter to this quarter on a basis will be about 2%.
2%.
Out of this 2% movement, I would attribute this to kind of looking at some cost reduction areas which have come in utilities production, et cetera, from that perspective. There's some very minor, I would say, one-off areas which we have seen from that perspective. So I would say that we should continue to be in the range of 50 %+ of gross margin.
Thanks. Just one question to add here.
Sorry, Sanjesh. Just a request, would you like to please rejoin the queue if you have any follow-up? We have other participants.
No, I will come back in the queue.
Sure.
No, I will come back on the queue. Thank you, sir. Thank you for answering all the questions and best wishes for the coming quarter.
Thank you.
Thank you, Sanjesh. We will take our next question now. Before that, just to remind all the participants, please restrict to two questions each, and then return to the queue for a follow-up. We have Ankur Periwal of Axis Capital. Ankur, please go. Please unmute your microphone. Yes.
Hi, sir. Thanks for the opportunity. Am I audible?
Yes, we can hear you.
Great. Yeah. Hi, sir. Thanks for the opportunity, and congratulations on good set of numbers. First question on the guidance. While we are building in 5%-7% sort of a revenue CAGR, depending upon the range that we are looking at over the next, let's say, two, three years. How much of this will be volume and how much of this will be value? Value could be here, more premiumization, et cetera. Related on the question on the margin side, the synergy benefits of the value capture that you mentioned is still pending. Over what timelines are you going to achieve that? Is it 2028 only, or probably it will sort of flow through in 2029 also?
Great question, sir. Ankur, as I described, our product portfolio is very complex now, right? As I said, we sell a product which is EUR 1, and we sell a product which is EUR 150. Looking at whether value growth or volume growth, it is important that we grow and the growth is profitable, right? The growth should not hamper our gross margin, and that is what we are really focused on looking at, right? From that perspective. That is the first area. The second is the value capture will be continuous. We will be delivering more value capture in terms of FY 2027, FY 2028. Our major portion will be FY 2027, FY 2028. Some will be, of course, some of the 2028 value capture will also flow into FY 2029.
Sure, sir. Thanks for that. Second question on the balance sheet side, on the debt repayment. What are our plans on the debt repayment side, given that a lot of debt also sits on the global side? Secondly, on RIECO. Earlier, we had plans to hive off that business. Any revised thoughts on the same? Thanks.
The acquisition debt what we have availed, partly we have repaid. A very small part of it we have repaid, and we will be repaying some of the loan. As our net debt position is improving, as is visible in the presentation, we think we will be able to accelerate the payment of the acquisition debt.
On the RIECO, sir, you want to continue?
On RIECO, this first quarter, we had faced certain execution challenges, primarily because of some of the subcontractors have faced difficulty with labor availability. We expect the things to normalize from this current quarter onwards, and we are confident that before the year end, it will be closing a positive number. That is the particular cycle.
Ankur ji, summary is that our transformation of RIECO will continue. We will continue to see how we can get to better numbers.
Sure, Rathi ji and Athalye ji. Thanks a lot, and all the best.
Thank you, sir.
Thank you. We have our next question coming in from Rohit Nagraj of 360 ONE Capital . Rohit, please go ahead.
Again, unfortunately, on the guidance front, given that for FY 2029, for the consolidated business, we have significant improvements from FY 2027 to 2029, almost 16%-17% CAGR at the higher end. On the EBITDA front also, it is closer to doubling. On the EBITDA front, do we expect that the acquired business will have margins of almost touching to double digits? Historically, have they any time done that? Thank you.
Historically, they did do double digits always consistently. As I described the journey earlier to one of the earlier questions was, on the sales side, we are looking at a lot of business regain, and on the EBITDA side, we are looking at a lot of value capture, which will come coming as we drive. This guidance, FY 2029, we have been holding this from day one. This is not a new guidance which we have come up with.
Right. Got that, sir. Sir, second question is, in the last three to five months, have we taken any material price increases, and have they been completely absorbed? Obviously, there will be an element of the RM cost inflation, but we do not expect that the pricing should again correct and that may lead to some impact on the margins.
I didn't follow your question, Rohit. Are you saying-
Yeah. I'll repeat it. Thank you. So in the last three to five months, in our portfolio, have we taken any price increases across our product portfolio? Obviously, there will be one element which will be because of the input cost inflation, and another element could be from the demand-supply dynamics. Is it that these prices will sustain going forward, or if the demand-supply situation again gets impacted, we'll have to reverse a part of that? Thank you.
Understood. So most of our price increases right now have been only to pass on whatever cost increases we have experienced. In order to build the trust with customers, we have been very particular not to take any advantage of the demand and supply situation. So if the raw material prices soften, oil prices soften, at that point, we will only reverse some of the pricing.
Sure. Thanks a lot. All the best.
Thank you, Rohit. We will take our next question now. We have Nitesh Dhoot of Anand Rathi. Nitesh, please go ahead.
Yeah. Hi, team. Good morning, and congratulations on a good set of numbers. My first question is, if you could lay down the strategy behind acquiring the 70% stake in Sudarshan Colorants, from the overseas subsidiaries. What is the rationale behind that? Is it any cash transfer that we are probably looking at from the parent to the European entities for any deleveraging purpose, or what exactly is the thought process behind that?
This decision, it was emphasized right at the beginning. At the time of acquisition, we had gone for indirect acquisition, that is, because of financing reason. It became suitable to acquire these entities through its earlier holding structure. But that time itself, it was a plan that eventually we would like to hold the shares directly from Sudarshan Chemical. We are now just carrying on. It is only within the group holding structure rationalization, which was planned earlier itself. There is nothing further to that, and we don't see this will have any impact on the controlled business of it.
All right, sir. My second one is, if you look at the notes to the consolidated financial results, note number nine, that's after June 30th, wholly owned subsidiary signed an agreement with an employee representative body for an employee restructuring program. The impact has not been quantified. Is that a European Works Council deal, and does it mean that a restructuring charge is coming up in Q2 or Q3? If that is the case, how much would that charge be and whether that's built in your EBITDA guidance for FY 2027?
As was mentioned in the note that [VBP] is right now the quantification was not possible. By the end of Q2, I think we should have clarity on the quantification of this. As of now, we cannot provide anything more than that because the numbers are quite soothing. By next quarter, we will have to be able to provide more clarity.
All right, sir. These are my questions. I wish you the best for the coming quarters.
Thank you.
Thank you, Nitesh. We have Archit Joshi of Nuvama with his question now. Archit, please unmute your microphone.
Yeah. Hi. Good morning, gentlemen. Thanks a lot for the opportunity. Sir, if you can share your thoughts on the four key application areas industry-wise that we cater to, your outlook on that from a near-term perspective, how are you seeing demand in, let's say, paints, packaging, plastics, inks, and some of the other specialty applications that you have started to cater to now, especially after the Heubach acquisition. Just your thoughts, sir.
Sure. Thank you. If you look at the coatings market, the current situation in U.S., both the decorative market, which is the house paint market, and the automotive have been subdued, right? Both in U.S. and Europe from that perspective. If you look at plastics, and this is probably short-term, given the whole geopolitical situation, there has been a substantial increase in polymer prices. That's where I think our customers, the whole value chain has tied up. They do not want to keep high-cost inventories and there's a hand-to-mouth kind of supply situation, and that's why you see the cycles in plastics, right? In printing inks, the volume-driven printing inks has been a little bit on the decline market, right, in general as a long-term trend, given the digitalization. The volume-driven market is declining.
However, some of the specialty markets where there are stringent regulations for packaging, et cetera, that market has been growing from that perspective. If you look at-- We kind of divided into special applications, which is several applications there, which is agro, which is digital inks, et cetera. That market there, we are seeing very good growth recently.
Got it, sir. Sir, my second one, on the RM basket. Prior to the acquisition of few important RM that we used to track as analysts like butanol, 2B acid, 4B acid. Firstly, how are they placed in terms of the existing supply chain? After the acquisition, how has your RM basket widened? Which would be the critical raw materials that you would be requiring now, let's say, for these specialty pigments or even if we have broadened our azo pigment portfolio. If you can share, that would be very helpful. Thank you.
Sure. I think we look at various categories, right, of raw materials. Those categories would not have changed, right? For example, let's say benzene, propylene driven, acetic acid or aniline driven, naphthalene driven benzene. I think what are phosphorous driven market or categories. What has changed in our product mix is azo is good, but I think high performance has grown substantially and our pigment dispersion business has grown substantially, and those categories then become more important.
Sure, sir. Would the same RM be used for these azo and specialties? Would that be a fair assumption?
No. They are different.
Okay. Those are also certain special polymers or something that you would require? If you can name, that will be really helpful to track the underlying item.
It is the category, sir. It is like phosphorus-driven category becomes important there. Then there are very specific categories which we can share with you offline later with our team, how we track them. Yeah.
Sure. That helps, sir. Thanks and all the best for the coming quarters.
Okay. Thank you.
Thank you, Archit. We have Rashmi Gohil of Arihant Capital with her question. Rashmi, please go ahead.
Hello, good morning. Thanks for giving me this opportunity. Q1 revenue annualizes to roughly INR 10,600 crores, which is already above the top end of your INR 9,800-INR 10,200 crores FY 2027 guidance. While business EBITDA margin 9.4% is running ahead of what INR 800 crores EBITDA, which implies on that revenue base. Are you reaffirming FY 2027 guidance as is or is there upside bias? How much of this Q1 strength was one-off versus other?
As I mentioned in my presentation, ma'am, that. Great question from your side. As I mentioned, I think our results are solid. There aren't many one-offs. There may be a few areas, that's why we are kind of talking, we are bringing out the business a bit up from that perspective. However, as I said, given the current geopolitical situation, we want to wait and watch, look at how Q3 comes out, hence we are not revising our guidelines currently. We will revisit this end of quarter.
Okay. My next question is, what is the phasing assumption for acquired group margin improvement through FY 2027? Is 6%-7% the new steady state, or is there a path back towards Sudarshan legacy like margins 15%+?
For our guidance, which we have been given, I don't think with the guidance we would reach 15%, but the area where we would want to look at for the acquired group is in high single digits or low double digits.
Okay. Thank you so much. All the very best for the next upcoming quarters.
Thank you.
Thank you, Rashmi. We'll take our next question now we have Gaatha Jain of Monomer Capital. Gaatha, please go ahead.
Hi, sir. Thank you so much for the opportunity. I'm a little new to the company, so my question might be very basic. I just wanted to understand the contract part of our business. How do we have the contract with our clients? Is it like a long-term contract or a short-term contract? Are we able to pass on the raw material prices in terms of contract?
Ma'am, with your questions, it does not seem you're new to the company as in these questions. I think our business is quite a repetitive business. To change any of the pigments in the coating industry is a substantially long period, and it will depend from customer to customer, but it may take anywhere between one to two years. If it's automotive paint, it would even take five years. So that way, it's a sticky business from that perspective. Generally, what we like to do is we love to negotiate quarterly prices with our customers. In a steady state of the business, that business kind of flows in, but when there are these current ups and downs in the geopolitical and raw materials move and costs move, we look at passing on those increases.
All right. Thank you so much. That's all from my side.
Thank you, Gaatha. We have Pratham Kankariya of Quantum AMC. Pratham, please unmute your microphone.
Yes, sir. Sir, I think just one question. India business has grown much faster. In past you have mentioned that you would be transferring some products from the Germany base to India base. Is that the same effect which you are seeing in the India business?
There is some business which are intercompany businesses too, which we have gained from that perspective. Partially that is correct. Either we have been producing here and selling in, or and vice versa. It does have that impact.
Okay. How should we see margins going forward? Assuming there might be some gain with the low-cost inventory that we have on the raw material front.
As we described at one Sudarshan level, if you see both together, there aren't many one-offs. Going forward, we've already given the guidance of how we look forward to this year.
Okay. Thanks.
Thank you, Pratham. We have Viraj Mahadevia of MoneyGrow with his question now. Viraj, please unmute your microphone.
Hi, sir. I'm new to the company, but congratulations on an astute bit of deal-making here with Heubach. Quick question, sir. Before Heubach started its struggles a few years ago, it used to be a EUR 1 billion top-line business. Sudarshan, more recently, has done INR 9,000 crores in top line. So the combination of the two, do you see a more aggressive revenue growth going forward as you can build effectively another Sudarshan out of this acquisition in terms of top line? Or are you being more selective and measured in your revenue growth because you're cutting off unprofitable some business or you have excessive China competition in certain product lines? Can you give us some view around why the revenue growth won't be more aggressive in the next two to three years?
A great question, sir. Just talking about the. Just one second. Looking at, if you look at Heubach. Heubach was made of two companies. First, Hoechst [planning] and the Heubach business. Right?
Right.
That was integrated and you are right, it was about one year ago. But I think as soon as the integration happened, a lot of business was lost. Right? The business was lost. That is where I think when we look at our projections, what we are looking at is, given our current market share, it is difficult to go beyond what the market size is going. But we have put in a lot of numbers here because we believe there is a substantial opportunity in capturing lost sales. Right? That is where I think we are looking at it. I think from an EBITDA perspective, also looking at how do we reduce costs and ensure that there is a lean operations, right? That is where I think we improve the EBITDA margins.
Yeah. I agree on the cost side and the synergies and the China plus one coming from India. But on the revenue side itself, even if Heubach was doing INR 5,000 crores equivalent of revenue after the acquisition, that leaves substantial growth potentially to recapture some of that lost business. Is that on the agenda? Because you should be able to grow your market share faster than the overall market.
Absolutely, sir. That is where if you see our slide nine, that is where I think we have done our projection on investor deck from that perspective, where we said we could reach INR 12,000 crores plus.
Right. Okay, great. Thank you very much.
Thank you, sir.
Thank you so much. Requesting participants to please click on the Raise Hand icon from the Participants tab if you wish to ask a question. Any participants? All right. Ladies and gentlemen, we will take that as the last question. I will now hand it over back to the management team for their closing remarks. Over to you, management team.
Thank you. Thank you, Ranjit and IIFL Capital. Thank you, participants, for joining our quarterly earnings call. We remain confident in our journey going ahead and looking forward interacting with you in the coming quarters. Thank you.
Thank you so much. Ladies and gentlemen, as there are no further questions, on behalf of Sudarshan Chemical Industries Limited, that concludes today's conference call. Thank you all for joining us, and you can now click on the leave icon to exit the meeting. Thank you all for your participation.