Ladies and gentlemen, you are connected for the Apcotex Industries conference call. Please stay connected. This conference will begin shortly. Participants, you are connected for the Apcotex Industries conference call. Please stay connected. The conference will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Q4 FY 2026 earnings conference call of Apcotex Industries Limited. 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 this conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. At this time, I would like to hand over to Ms. Purvangi Jain from Valorem Advisors. Thank you and over to you, ma'am.
Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Apcotex Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. Before we begin, a quick cautionary statement. Some of the statements made in today's con call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.
The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Abhiraj Choksey, Vice Chairman and Managing Director, and Mr. Vivek Thakur, Chief Financial Officer. Without any delay, I would now like to hand over the call to Mr. Vivek Thakur for his opening remarks. Thank you and over to you, sir.
Good afternoon, everyone. It is a pleasure to welcome you all to the earnings conference call for the fourth quarter and financial year ended 2026. I hope you had an opportunity to review the financial results and earnings presentation, which have been circulated and uploaded on our website and the stock exchange. Let me provide you with a brief overview of the financial and operational highlights for the fourth quarter and financial year ended 2026. For Q4 FY 2026, the revenue, operating revenue stood at INR 398 crores, registering a growth of 14% year-on-year. This was supported by higher volumes and continued pricing discipline. While total volumes for the quarter grew by 10% year-on-year, this reflects steady demand across key segments. Operating EBITDA stood at INR 55 crores, up 42% year-on-year.
With EBITDA margins which have improved to 13.76, which is driven by higher volumes, better realizations, and enhanced operational efficiency. Profit after tax for the quarter stood at INR 35 crores, which reflects a strong growth of 107% growth year-on-year. Margins improved to 8.73%. This performance was supported by a disciplined execution across key operational parameters, along with a continued focus on cost optimization and efficiency improvements. We also continued to execute our ongoing CapEx projects with rigor and discipline aimed at supporting strategic growth and capacity expansion. During the quarter, the ongoing West Asia crisis led to heightened volatility in raw material prices and some moderation in export demand across select markets. In response, we proactively secured key raw materials to ensure uninterrupted customer supplies.
This strategy has helped us maintain operational stability during the period. While we witnessed some modest impact on export sales, the company continues to remain resilient with limited direct exposure. Demand is stable across key core markets, and the proactive risk mitigation measures, along with a strong balance sheet position, help us navigate this volatility. For FY 2026, the company delivered a strong performance, achieving record high sales volumes. Up 14% year-on-year. Highest ever export volumes also grew, growing at 14% year-on-year. This reflects a robust demand across both domestic as well as international markets. While operating revenues stood at INR 1,442 crores, which is a growth of 4% year-on-year. Operating EBITDA reached a new peak at INR 177 crores, up 42% year-on-year.
EBITDA margins expanded to 12.31% for the year, supported by strong volume growth, improved margins and higher capacity utilization. PAT for the year stood at INR 101 crores, reflecting a growth of 88% year-on-year. PAT margins are at 7.03%. Company has maintained a strong liquidity position during the year and remained net cash positive, with cash and investments exceeding borrowings by approximately INR 70 crores. Our net debt to equity also improved to INR 0.08. Lastly, the board has announced a final dividend of INR 5.5 per equity share, which is subject to shareholders approval. This takes the total dividend for FY 2026 to INR 8 per equity share, including the interim dividend which was declared earlier.
Before I conclude, I would like to briefly highlight certain provisions and accounting adjustments recognized during the quarter. Employee benefit expenses include certain provisions of approximately INR 14 crore which relate to long-term incentive plan, pending litigations based on external legal advice, and higher gratuity and leave encashment obligations arising from policy changes. An impairment assessment of turbine and related accessories at our Valia facility resulted in recognition of impairment loss of about INR 4 crore, which has been charged under other expenses. Following an internal technical assessment, we revised the useful life of certain plant and machinery, resulting into additional depreciation of about INR 2 crore during the quarter. These accounting adjustments better reflects the economic life of these assets. Some of these items are one-off and may not recur. With this now I open the floor for questions and question and answer session.
Thank you.
Thank you very much. We will now begin with the question and answer session. Our first question comes from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Thank you, sir, for the opportunity. Just a couple of questions and congrats on a good set of quarters. During the quarter, I didn't understood this employee benefit expense. You had also mentioned in your footnotes that this, some INR 13 crore of additional cost has been taken towards some pending litigations on legal advice, toward gratuity leave. We have not seen this sort of increase, when we look at the history over the last five, six years. These additional numbers, what is exactly, if you can quantify, what is this based on?
Sure. Yeah. What's your second question? You said you had two questions.
The second question I would like to know, so this quarter again, like this policy changes in depreciation, like suddenly why we are changing some policies on depreciation like in a quarter where we are, we are able to get good benefits. Still this sort of some provision, some one-offs in other expenses also of some INR 4 crores. If you can also quantify what is the turbine-related losses exactly, and also why there is a policy change in depreciation, particularly only in this quarter.
Sure. I'll answer both questions. I think these are all everything to do with certain provisions that were made, and I realize that they are higher and other people may have questions on the same. Maybe I'll spend a little bit of time on this and hoping that, you know, everyone else also would have whoever has similar questions, those are also answered. First, to answer your question on the employee benefits expense, there are three or four provisions that were taken by our, of course, the management, auditor, Audit Committee Board. It's gone through the whole process. It was the end of the year, they were all provisions that were taken where we thought was prudent to take them.
One was a new policy on long-term incentives for certain senior management employees that we have just introduced in the last quarter. It is to be paid out over a period of five years. That provision has been made. That will be paid out in the fifth year in 2030. That provision has been made this year, and that will be made every quarter from now on. Obviously, this year, since it's happened at the end of the year, the entire year's provision has come into this quarter. Going forward, the provision will be every quarter will be less. That's on long-term sort of incentive. That's one reason. The second reason is, there are some pending litigations
That were against the company. Again, this was discussed with the auditor, audit committee. It was transparently discussed with the board as well. We thought it was prudent to make a provision at this stage. Unfortunately, I can't talk a lot about it since the matter is in the courts and I think in the next, you know, two, three years or whenever it is, some clarity will emerge. At that point we will see. But at this point, it again, we thought it was conservative it was a conservative call, but a prudent call to take that provision. The third thing was some changes in gratuity policy that happened this year. This is not a, that it doesn't it's neutral to the company.
It's just that actuarial valuation changed due to certain gratuity policies that we have undertaken. You know, obviously the new wage code that has come about sort of triggered this discussion, so we made some changes in our gratuity policy as well. As a result of which we've had to make a provision of that as well. Again, it's the numbers are in the notes for all those three, and all those three together have had that impact on employee benefits, that line item. The second question on the depreciation, actually, you know, this is a cogen power plant that we had invested in a few years ago. Now, in the last few quarters, we've not been using the turbine because coal prices have been, you know, or the power available from the grid is significantly cheaper than generating our own power.
When we had made the investment, at that time, coal prices were lower, so it made sense. The grid power prices were higher. As a result of which, again, we found it prudent to kind of impair this turbine, at which at some point we may even sell it. Right now we've just kept it as a backup, but we may choose to sort of liquidate that as well. As a result of that, you know, all the cogen power plant assets which were sort of, you know, the depreciation was taken over 40 years, has been reduced to 15 years. That's resulted in the change in depreciation. It's, it's linked to the two.
We felt that, you know, it was end of the year, sort of, and we wanted to sort of clean up whatever pending issues there were. These were one mostly, you know, are one-off nature, and we don't expect them to be recurring.
One more question, if I could?
Sorry to interrupt, Mr. Khetan.
Let him ask one more follow-up please, Sagar, and then we can move on.
Sure.
Yeah, go ahead.
Sir, wanted to know, is it possible to quantify the inventory gains during the quarter? On nitrile latex, are any updates, like where are we standing today in terms of utilizations and what is the oversupply situation today and what are we expecting like, to ramp up, or to get some operating leverage for 2027 and 2028? Yes, sir. Thank you.
Thank you. Thank you. Inventory gains, yes, there has been some inventory gains. I don't think it has been significant. Perhaps there has been, because, you know, Jan, Feb were kind of, in March there was some run up I guess. Honestly, you know, March first is when the whole war situation started. I would say the, there was not a significant inventory gain, but some inventory gains. I think largely there has been margin expansion in nitrile latex. That has definitely been one of the reasons for a good quarter. The war situation, we were actually better placed than some of our competitors in March, in the month of March, so that helped for sure in nitrile latex gain. As far as nitrile latex margins, but as far as long term is concerned, it still remains an oversupply.
We are running at almost full 100% capacity utilization now for nitrile latex. At least going forward, we expect to run at full 100% capacity utilization. From a capacity utilization standpoint, no issue, but from a margin standpoint, short-term margins have certainly improved right now because of the war situation and some of our competitors have not been able to consistently supply material to our customers, so that's helped. Long term it, as I've been mentioning, is that it's improving slowly and we expect it to continue to improve. There might be some short-term gains due to this war situation in terms of margins for Apcotex.
Got it. Thank you, sir.
Thank you, Aditya.
Thank you. Your next question comes from Ankit Minocha from Adezi Ventures Family Office. Please go ahead.
Hi. Good afternoon. Can you hear me?
Yes. Go ahead, Ankit.
Yeah. Hi. Congratulations on the good set of numbers. I mean, just looking at your, I think, EBITDA for Q4, I believe it's like amongst the highest numbers in the last few quarters. Would it be safe to assume this as like the new base for say the upcoming four quarters ahead for Q1- Q4? Or do you see some kind of margin compression in case of decrease ahead?
Yeah, as you know, we, you know, generally don't give any guidance of future quarters. Our business is fairly volatile quarter-on-quarter. There are some quarters and we've had a, you know, seven, eight difficult quarters in terms of margins also. This quarter, obviously margin has been, margins, EBITDA margins have been much better. Difficult to say given the current war situation. Look, I would say strategically as we are at a higher capacity utilization levels, we expect margins to be better than the average of last year, at least for this coming year. Quarter-on-quarter is really difficult to say because there are so many uncertainties in the business. First, if you see the last one year, there's been so many things from tariffs to this war, you know, to lots of raw material issues in general.
Difficult to say quarter-on-quarter.
Sure. Thanks. That's helpful. Secondly, just want to understand your latest read on.
The ADD that was kind of scheduled, any read if it's coming in or not or if you've already built in that benefit into your benefit or lack of benefit into your FY 2027 planning?
Yeah. We I mean, we never built it into the planning anyway. It was something that we wanted our some support from the government. Unfortunately, as I mentioned in the last con call as well, the Finance Ministry did not notify the anti-dumping duties that were recommended by the DGTR, which is part of the Commerce Ministry. There are some other legal cases on the same issue, not Apcotex, but they are ongoing. We're waiting and watching on what happens there. In one or two cases, a high court has actually given an order to levy provisionally levy anti-dumping duty, but it hasn't happened yet. I'm not sure how it's going to play out.
If it makes sense, we will see if we want to go legal, but however, we have not built that into our plans. We continue to expand. We continue the expansion project for NBR, which will almost double our NBR capacity by next year. We feel fairly confident that, you know, as far as the return on investment, with all the work that we have done over the last few years, with or without anti-dumping, it should be good. You know, obviously, yes, we wanted some support from the government for a period of five years, since we were coming up with a significantly large NBR plant.
Right. Thanks, and wish you guys all the best. Thanks.
Thank you.
Thank you. The next question comes from the line of Sajal Kapoor from Antifragile Thinking. Please go ahead.
Yeah, hi. Thanks for the opportunity. Just two questions. Can the existing assets support further growth, or has utilization already entered the constraint zone because the new CapEx is further away? Going into FY 2027, I mean, how do you see at an overall aggregate basis, the capacity that is still available?
No, you're right. It is for us capacities, you know, we have four or five different plants in our two locations, five different plants in our two locations. I would say in one or two plants we still have some capacity available. For NBR, for example, we were at 100% capacity utilization for a few quarters, and we continue to be so for the next four quarters until new capacity comes up in Q1 of the following year, following financial year. For synthetic latex, we are building new capacity again, which will come up in the following financial year. There we have some leeway, and we can grow. In nitrile latex for Q4, we were at almost full capacity utilization, that will continue to be at full capacity utilization.
There we hope margin expansion will be there over the next four quarters. It's a, you know, every business has. We are running at fairly high capacity utilizations. Yes, that's true. There is some leeway for growth. Fortunately for us, some of the, you know, we were anticipating, when I look back, of course, in 20/20 hindsight, we were anticipating to reach full capacity utilization in some of our products by Q2 or Q3 of this financial year, 2026-2027. Fortunately, Q4 was very strong for us. Yeah, that's where we are today.
Sure. That's helpful. What part of the current margin expansion you think is structural, operational improvement versus temporary, you know, raw material spread, kind of a tailwind? There is a lot of chaos and disorder happening globally, as you have acknowledged, over previous earnings calls as well. Given that the world is still very fragile and random, I mean, how much of this improvement we should take as structural and how much is, you know, just pure luck or cyclical?
I think, look, if you see Jan and Feb were fairly stable months, right? The tariffs were gone. There were no major wars. I think Jan and Feb for us were very good months. Sure, in the month of March, we were better placed than some of our competitors. We took some really good decisions in the past that paid off. There might be some amount of, as you would say, cyclicality or temporary benefits that would have come. Hard to quantify, but in this quarter, I think, not a very large amount in Q4.
That's helpful. That's helpful. That's all from my side. Thank you.
Thank you.
Thank you. The next question comes from the line of Mehul Panchwani from 40 Cents. Please go ahead.
Hello, sir. Congratulations on a great set of numbers, and thank you for the opportunity.
Thank you.
Thank you, sir. What are the current utilization levels across nitrile latex rubber capacity?
I would say For Q4, I'm talking about Q4, yeah, not for the whole financial year, but for Q4 we were between 90 and 100% across all our plants, all our factories.
Sir, are we planning any CapEx which is going to bring up some more capacity or in the new in FY 2027?
FY 2027, no. Most of this capacity will come on stream in FY 2028. In FY 2027, we will have growth for the whole year. Yes, there are some debottlenecking projects which will help a little bit. Yes, you're right. There is no major capacity expansion plan or project that will come on stream in FY 2027.
Which quarter of FY 2028 we'll see more additional capacity?
I think by Q1 of FY 2028.
Okay. Okay. sir, how with the kind of current geopolitical scenario?
Are we having, any, I mean, now that most of it is out of it, but still there is some kind of conflict going on. I believe that we had inventory of raw materials earlier on. How are we placed for the upcoming two quarters?
A great question. Look, I think as there are-- The way we look at it, there are two kinds of raw materials, one or three kinds rather. Ones that are available in India, those obviously we're better placed. Even for those raw materials that are available in India, you know, their upstream supply chain sometimes is an issue when they're importing, especially from the Middle East. Second set of raw materials that we were importing directly from the Middle East, from Saudi, Kuwait, that was affected immediately, right? As soon as the war started within the first week, as soon as the Strait of Hormuz .
Right.
That remains an issue and it remains a challenge. Fortunately, we were, you know, we've been able to run our plant without one, even one day of shutdown, because we were able to take some bold calls in early March. We covered material. As Vivek mentioned in opening, in his opening remarks that we took a risk, covered a lot of the material so that we could keep the plants running in March and April as soon as the material stopped from the Middle East. The third set of materials is that comes from other parts of the world which continues, right? Obviously, their prices have gone up, but availability so far is not a problem. The problem is even though there is a ceasefire today, the Strait of Hormuz is still closed.
With the Strait of Hormuz being closed, there are a lot, not only oil, but a lot of petrochemicals that the world is dependent on, you know, on the Middle East region for those petrochemicals. Those we don't know what the long-term impact of that is. As of now, it seems that we have managed it quite well. Honestly, it's kind of day-to-day, you know. I wouldn't say day-to-day, but week-to-week, you know, situation. So far, we feel fairly confident that we are covered up to the end of June.
Right. Right. Right. I appreciate your transparent response on this one. Thank you so much.
Thank you.
Thank you. Your next question comes from the line of Ankit Kanodia from Zen Nivesh. Please go ahead.
Yeah. Thank you for taking my question. This FY 2026, we have generated INR 200 plus crores of cash flow from operating activity. I see around INR 50 crores of that is because of working capital adjustments.
Yeah.
How do we see it directionally from here? Should we consider this as, how much of this should be structural and how much of this can be one time? If you can just throw more color, that would be very helpful, sir.
No, nothing is one time or very little is one time because it's, I mean, the whole year in fact was a challenging year in some sense. Only in March you can argue there were some perhaps short-term benefits, but the remaining 11 months, you know, were sort of regular 11 months with challenges. We expect it to only improve.
Okay.
Cash generation.
So, uh-
Cash generation that you mentioned on an annual basis.
Yeah. Okay. Okay. I mean, basically when I look at the working capital situation over here, it is a positive number in this compared to the general sense of always working capital being negative. That's, that was my main question.
Okay. From a working-- You're right. That way because working capital require The, you know, raw material prices were fairly muted for about nine or 10 months of the year. That definitely helped with sort of cash generation, so to speak. Now obviously in the current context, it's exactly the opposite, where the prices are the highest in many, many years. Some of it now will be sucked back into working capital. From that point of view, yes. I meant from a profitability point of view, we only expect it to improve. Overall working capital requirements may go up and down based on sort of raw material pricing and volatility. Overall, I think, you know, structurally from a profit point of view, we expect things to, you know, only improve from last year.
Sure, sir. My second question was related to ApcoBuild. We had a good run on ApcoBuild for three, four years, and I think this year probably we have not grown that much. If you can throw more color as to how do we see that and what are your views over the next two, three years, directionally in general. I'm not asking for any guidance.
Yeah.
How is the competition shaping up in this space? Yeah, that's it.
Yeah. Actually, even ApcoBuild we finished the year quite strong, so we've had double-digit growth. There were some internal issues for us in terms of, you know, manpower at the beginning of the year, but that's been now corrected. We have relooked at our distribution channels. I think we have a fairly good team in place. We have a new leader who's taken over last year. We feel fairly confident that we will continue to grow at double digits. Given, as I said, we are in a niche space in a few geographies, a few products. We are trying to improve and grow in that. As and when there is any additional information that is material in nature, we'll let you know.
Okay. Thank you so much, and all the best, sir.
Thank you.
Thank you. The next question comes from the line of Saurabh Shroff from QRC. Please go ahead.
Yes. Hi, good afternoon, congratulations to the team on a great set of numbers. Abhiraj, first question on nitrile latex is how is sort of profitability shaped up in that quarter, and now is that contributing to overall profitability?
Yes, the short answer is yes, of course. We've had, just to recap the history that when we commissioned the plant in April 2023 or March 2023, obviously it was at the down cycle. It was the lowest and in all of 2023 towards the 2023-2024 and 2024-2025, the margins were the lowest they've ever been, even pre-COVID. Things started improving in 2025, 2026, and every quarter we have seen a gradual improvement in margins. In Q4 there was a significant improvement, as I mentioned to one of the callers earlier, especially the month of March could have been a little bit of a blip because we were better placed than some of our competitors, so we got excellent margins. Some of it may again come down in the coming few quarters.
As of now, nitrile latex structurally remains still a challenging business, but temporarily it's been very good for us in terms of margins.
That's great to hear. Secondly, on the new CapEx that we are doing, which is obviously 12 months away, so maybe slightly medium-term question on that given the geopolitical challenges, et cetera, the world that we are living in, maybe we assume that this is status quo or that things are not gonna be normal, let's say, for a while. Any sort of medium-term plan on how we are placed? Do we need to do something to de-risk ourselves? Are there suppliers we can sort of engage with? Just wanna understand big picture on the two, three main raw materials that we use, how the team is thinking about that, please.
No, you're right. I mean, look, it's as I mentioned to one of the previous callers, very difficult because I'll just give you an example of one raw material called styrene that we were importing largely from the Middle East, Kuwait and Saudi Arabia. Obviously, those, with the Strait of Hormuz being closed, those avenues are closed right now. Large chunk is coming from China now. So far so good. We've been able to get it. I think we're covered till the end of June. It's so hard to predict what will happen in the future. I wish I could. You know, we feel fairly confident the way things have been.
Initially in the month of March, obviously there was a lot of panic, I think supply chain in the world are quite resilient, thanks to the Chinese overcapacity in most manufacturing, we've been able to ride through that. Some other raw materials like butadiene are available in India, as long as they don't have any issue with their upstream supplies, we don't expect any issue there. Most of the others also, as of now, the issue in getting material doesn't seem to be an issue. We're hoping that in the next few weeks, if the war ends and the Strait of Hormuz opens and things normalize, then of course, everything is back to normal soon, hopefully.
Understood. Congratulations and a great show on the cash flow in this tough times. I mean, it's an outstanding work by the team to pay down the amount of debt that we've paid down, and the balance sheet is as strong as ever. That's great job done.
Yeah, I mean, that's the idea. That was the idea. Like, we wanna keep a strong balance sheet even in the most difficult time. As you rightly said, the team deserves all the credit. We worked day and night in the month of March and April to ensure that our customers don't suffer, our plants keep running, and our customers' plants keep running. That's been the endeavor, and I'm glad it's worked out. Another thing I'll mention, though, is that, you know, and some of this doesn't get reported, but managing risks, and I'll give you a small example, both our plants run on multiple energy streams. For example, our Taloja, Valia plant, we can use gas, we can use coal.
In this context, when in the month of March and April, as you know, there was a shortage of gas. We were able to, you know, manage without even a single day of production loss. Whereas I know many other companies, especially in Gujarat, had to cut down production by 50%, and more. Our team has worked really hard to manage this.
That is indeed heartening to hear. Thank you very much and all the best for the next few years.
Thank you.
Thank you. The next question comes from the line of Farokh Pandole from Avestha Fund Management. Please go ahead.
Hello.
Yes, Farokh. Good afternoon.
Good afternoon. Hi, Abhiraj. Congratulations on the excellent numbers. I, just some of my questions have been answered. My first question was on nitrile latex. You know, when we had initially commissioned the project, we had spoken of a sort of step-up increase in capacity at a very low cost. Is that still applicable? Could it be possible that in the next six, nine months we could get some capacity there, all going well with growth and margins and et cetera? Is that a possibility or will that too, if it has to happen, get pushed into the following year?
The question is, yeah, it's absolutely. The plan is ready. We are ready to sort of go ahead and do that. We were waiting just to see how margin improvement happens. Honestly, the margin improvements, as I mentioned to a previous caller, have been better than expected in Jan and Feb were good. March was excellent. April was also is excellent, but that may be partly because of this war situation. We're waiting to see how things land once things normalize. Otherwise, we are ready to go ahead with it and it's almost all ready. It's a question of bringing in equipment. The lead time is just the equipment lead time, ordering and delivery of equipment. That we expect will be, you know, eight to nine months in the current context.
I think we will probably take a call on that in the next three to six months. Again, if that capacity comes on stream, it'll be in the next financial year, not this financial year.
Got it. I just had a question on some of these numbers that you mentioned in your sort of initial comments. Firstly, where are we with regards to net cash? You know, we have all our investments and cash et cetera, and then we've got some debt. Where are we on a net cash basis? You know, relating to the earlier comments, apart from the litigation based provision which you have taken, what else from all the numerous provisions that you've mentioned are non-recurring?
The litigation is also non-recurring.
Right. Apart from that, what else is non-recurring?
The long-term incentive will be recurring, but the difference will be that I think it's for the long-term incentive. Vivek, are you on the call? If you're, I think that INR 2.7 crores is for the whole year, and going forward it'll be done every quarter, right?
Yes. Correct.
Yeah. That will be recurring. The other thing was on a gratuity policy changes. That was also a one-time thing. That will be non-recurring.
Right.
The impairment of the asset, that one asset turbine is non-recurring, of course. It's a one-time thing.
Correct. Correct.
The depreciation we have taken for the year, I guess that will be kind of recurring because we have reduced the useful life from 40 years to 15 for a few assets that were linked to the turbine.
And just so that I'm-
Very I would say majority is non-recurring. There'll be some amount that'll be INR 3 crores-INR 4 crores that may be recurring.
Correct. The INR 260 lakhs, which was the incentive, that will still be. Obviously, it won't be, it'll be INR 260 lakhs per annum. That's the rate at which the expensing will happen.
There's an accounting thing about sort of, time value. That may differ every year. Yes, per annum. Correct. It's per annum. For now, from now onwards, we will be providing it for it every quarter.
Sure. Providing it, providing for it every quarter, but the amount will be on relating to this amount up or down on a per annum basis.
Yes. Exactly.
The total amount. Got it.
Yes. Exactly.
Got it.
It is platform. Yeah.
Got it.
Every quarter. Yeah.
The cash position or the net debt position?
Vivek, do you have that number as on March 31st? It's only improved since then, but as on March 31st.
As of March 31st, we have a total debt of about INR 90 crores. Our investments and cash bank balances are INR 160 odd crores.
When you say total debt, it includes working capital loans as well, right?
Yes, it includes all the loans. Entire debt is INR 92 crore. INR 92.
Term loan and working capital. Yeah.
We are positive by about INR 70 crores or INR 80 crores.
That's correct.
Great. All the best. Once again, congratulations. Thanks a lot.
Thank you.
Thank you.
The next question comes from the line of Rudraksh Raheja from ithought Financial Consulting . Please go ahead.
Sorry, I didn't hear the name. Can you repeat, Sagar?
Sure. Sure. It is the line of Mr. Rudraksh Raheja.
Sure.
Yeah. Thanks for the opportunity, sir.
Sorry to interrupt. Mr. Raheja, you're sounding a lot distant. If you're using a speakerphone or any external headset, may we request you use the handset, please?
Yeah. Is this better?
Yes, sir. This is much better.
I wanted to ask on a basket basis, how much % increase have we seen on the raw material side?
Sorry, can you repeat the question? I didn't
Yeah. How much increase have you witnessed on the raw material side, prices?
In which? Are you talking about Q4 or?
Yeah. Yes. Q4. Yes.
I mean, I don't have the.
Just as a broad number, like on an average, how much increase?
Average increase in raw material prices in Q4 compared to Q3? Vivek, would you have that number?
I don't have the blend, but I think it was in line with the increase in crude prices.
Yeah.
-generally. We have seen the crude prices have gone up by about 70% in 2 months. That's about round about the increase we are also looking at in raw material prices.
I think what Vivek is saying, if you were to compare the raw material prices on January 1st and March 31st, obviously it was a huge jump. The blended average of January, February, and March, and there's so many raw materials that we have, I mean, honestly, you can just look at the cost of materials, COGS, and you will see the blended, right? That's the increase.
Understood, sir. Understood.
Yeah.
Since, sir, we have been able to maintain or I would say we have improved our margins, we have been able to pass on, increase on the finished goods side as well. My question is, do you see like, more resistance from customer side if we further have to increase prices going forward?
Short answer is yes, absolutely. I think that's a big worry because in the long run, I don't know what these kinds of high energy prices and high petrochemical prices, nobody knows. I don't think anyone can predict what the demand destruction will be. In some industries, they are price inelastic to some extent, there maybe it won't be, but in some industries it's, you know I know some of our customers who, for example, supply to the automotive companies, are really facing the brunt because they're not getting the price increases from automotive companies and all their raw materials have gone up, not just our products, but all other products as well. They face, you know, they're being squeezed really hard. I, you know, I don't know how they'll react.
Some of them have even decided to run the plant at losses for one or two months, I don't know if that's sustainable. Obviously, that's not sustainable. It's very difficult to say, I would say in the long term, I think with inflation due to this issue, I think, it's definitely a big cause of concern, and it should be for all industries, not just ours.
Understood, sir. Sir, one more question from my side. In what situation, sir, would you expect that margins would deteriorate from here? Sharp further increase in crude prices or a sharp fall in crude prices?
I think, look, a fall will definitely hurt us because we are covering for material. The call we have taken is that we are, you know, we're gonna cover raw material and ensure plants are running, and we're not gonna take a call on where crude prices and petrochemical prices go. Once you've decided that, obviously, as I mentioned to one of the previous callers, that we have covered till June. Now, suddenly, if prices were to fall and we are stuck with high-cost raw materials, we will be, there could be a quarter or a few months, a few months or a quarter where we would have to live with lower margins, and that's fine.
That's the nature of our business, that there are some quarters that could be really good and some quarters that, you know, we'd have to keep it going and protect our market share, you know, we'd have to take that call. I would say at least, you know, obviously a sharp drop in prices will definitely affect margins in the short term. Increase in prices, I'm not sure. I think we'll be able to pass it along, but if we can't, then it could also impact, you know.
Makes sense.
Yeah.
Makes sense, sir. Sir, just last question.
Sorry to interrupt, Mr. Raheja. May we request you to-
Okay. Let Mr. Raheja ask one last question.
Thank you, sir. Yes, sir. Hypothetically, had we operated on 100% capacity utilization in this quarter across all plants, what would be our revenue levels in that scenario, assuming current prices?
You know, we are at very high capacity utilization anyway. Assuming current prices, you could assume a little bit more. I don't think we have too much room to grow, but maybe 5%, 10% more.
Understood. Understood.
No, I don't have the answer. I'm just guessing. I shouldn't be guessing, but I'm just guessing a little bit more.
Perfect, sir. Perfect. Thank you.
Yeah.
Thank you. Your next question comes from Darshan Gala, an individual investor. Please go ahead.
Hi. Actually, most of my questions have already been asked and answered, so I have no questions.
Great. Thank you, Darshan.
Thank you. The next question comes from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Yeah. Thank you, sir, for the follow-up. Just a couple of questions. Sir, on nitrile latex, is it possible to quantify for this fiscal FY 2026 what would be the top-line contribution and similar EBITDA contribution? Secondly, sir, onto this suppose for this quarter, like we have done a 15% EBITDA margins. Base business margins versus the nitrile latex margins, how are these two margins today as on date? Also, sir, you had also said to an earlier participant that demand improve or the margin improvement in the nitrile latex, that seems to be more of a temporary thing in nature. Structurally, though, it has not been improved actually.
What are the levers you see whether this business can improve or it will continue to remain in oversupply mode and things will continue to, like, go back when the crude prices fall and all things will go back to normal?
No. Okay. Sorry. I'll answer your last question first. I think you misunderstood. Structurally also there was an improvement, right? Over the course of the year, every quarter there has been a structural improvement in margins. Sometimes there were a few quarters we were at 0% EBITDA margins that had improved in Q3, Q4. Of course, in the month of March, there was some benefit that our company had, especially in nitrile latex, but that only for that one month in the whole of year, the last year, where you could say it's not structural. At some point, of course, we feel as the capacity utilization in the world increases for nitrile gloves and nitrile latex, margins will go back to pre-COVID levels.
They were still not at pre-COVID levels in February, but at some point in the next few quarters, they'll continue to improve and get to those levels is our contention. It's already taken three years, so we've been very patient. Sure, there are some short-term gains and sometimes, as I mentioned to previous callers, short-term losses as well that we may have to, sort of, you know, live with. I do not have a crystal ball. I mean, I don't. You would appreciate in the current scenario, who can predict what's gonna happen the rest of the quarter, let alone the rest of the year?
I don't have any number for you in terms of giving guidance for my nitrile latex margins and all of that in the next one year. I hope that answers your question.
For FY 2026, if you can like just onto the direction wise, if you can say like compared with the base business, margins would be lower.
Compared to the base business, structurally it has been lower. Yes. That's the question I didn't answer. Compared to the base business margins, they have been lower, but catching up. Again, I don't exactly know what will happen for the rest of the year, but I expect structurally it'll keep catching up, and eventually it should reach the base business. I don't know when that will happen, but it that's what will happen.
Sir, the contribution of nitrile latex in top line for FY 2026 and on EBITDA also, sir.
You mean in terms of revenue?
Yes, sir. Revenue and EBITDA both.
Don't have the EBITDA number. Overall percentage revenue of nitrile latex will be probably, I'm guessing 15%-20%. Vivek, do you have a number approximately of how much we expect nitrile latex revenue to be as a percentage of the top line? I know none of our sort of product lines are more than 20% of our total top line. It'll be probably 15%-20% is what I expect. Vivek, do you have a number?
Yes, sir. Around those levels.
Yeah.
Got it. Thank you.
Thank you.
Thank you. The next follow-up question comes from Sajal Kapoor from Antifragile Thinking. Please go ahead.
Yeah. Hi. Thanks for the follow-up. I just wanted to understand your overall R&D approach and thought process around innovation. I mean, how can we structurally transform this business over the medium to long term to make it more sort of value-driven rather than volume-driven? Any initiative that you are currently very positive about as far as the R&D innovation approach is concerned. Thank you.
Absolutely. Great question, Sajal. Two, three things we are doing. Number one is, we are in eight different business industry verticals, largely. Paper, carpet, construction, textile, rubber, footwear, tire and gloves. These are our largely eight different industry segments. In each of these industry segments, we have multiple grades of products. Some grades are what people would call commoditized, where, you know, sort of me-too products. There are some grades within each segment that are fairly specialized, where we are certainly for two or three customers, we're making this grade that nobody else in the world makes, for example. Specifically around, I can give you some examples. Technical textiles are a couple of grades.
There is a few grades in oil and gas, specific application of oil and gas, which broadly falls under construction segment, but it's actually a specific oil and gas segment. Within paper as well, we have for certain specialty paper. That's how we look at it. There will be parts of the business which will be what we call commoditized. Even I feel that you can't call it a commodity product because a commodity is, you know, something like cement. None of our products are like cement, right? None of our products are like steel. It's not as commoditized. Sure, there are multiple competitors or two, three competitors, we don't have that much differentiation as far as product is concerned. Therefore those are commoditized.
For each of those segments, we look at which are the where can we move up the specialty value chain and do something for our customers wherever there is a demand. Another new thing is, you know, for batteries, we are developing something for battery binders, which is very specific for a few customers. Those kinds of things will happen. Second thing we're doing is we're building a new R&D center this year, for which we've got approval from the board, and we're gonna spend somewhere between INR 20- INR 25 crores building a new R&D center where not only in our current industry segment, but even in different types of polymers, we'll be doing new research, new molecules. As and when that is commercialized, we will of course come back.
Nitrile latex is a good example of something that came from our R&D. These other examples that I gave you for technical textile and oil and gas all came from our R&D. There are many other examples, for example, in the NBR space as well. I feel passionate about it, so it's a long answer. We are developing a new R&D center, and we plan to spend, as I said, INR 20- INR 25 crores only on infrastructure. In our kind of business, it's very hard to get this kind of talent. We have to actually get some raw talent and groom them and retain them to ensure that they add value, and they can add value to our customer, not only in India but globally. That's a few things that we're doing.
In addition to that, we are looking at obviously brand new areas that we can that have low competitive in-intensity, that are, you know, future, you know, something that would be required more in the future and obviously where we have that polymer capability and expertise and where we can develop that. I hope that answers your question. Those are the few things we are doing in R&D.
Definitely. Such long comprehensive answers are so very helpful. Thank you so much. Very comforting.
Thank you, Sajal.
Thank you. The next follow-up question comes from the line of Mehul Panchwani from 40 Cents. Please go ahead.
Sir, how do we see our export business? Is it sustainable what we are seeing in FY 2026 or are we trying to grow up better than this year?
A great question. It's been a challenge, especially in the Middle East, obviously, last two months. That remains a concern while the war is going on. Look, we built a large chunk of our export business is exports to UAE, Kuwait, Saudi, Egypt, Turkey, those whole areas. While Egypt and Turkey are not affected by the war, but freight rates have gone up. That our cost of certain raw materials that we were getting from the Middle East are now coming from China. That's gone up. That's one of the concerns for us in the coming year is how One is if those customers themselves are running at lower, what would you say?
Demand.
You know.
Demand.
Lower demand, lower capacity. That's a concern. The customers in Egypt and Turkey that are running are getting competitive products now because our costs have gone up significantly, maybe compared to some of our Chinese competitors. For the first time, we are seeing in Turkey and Egypt, for example, Chinese latex coming in there. That's something we're sort of watching closely. Again, that structurally we feel that will completely reverse again. While there are some structural benefits that we have got from the war, there's also been some temporary benefits, not structural. Temporary benefits we've got. There have been temporary disadvantages as well from this war. This is a big one. We think that will correct very quickly once the war ends and things normalize in the state of normal.
You know, there are some positives and some negatives because of this war as well.
Yeah. Yeah. Sorry, one follow-up on this. How much does Middle East contribute to your top line?
Probably around, I mean, when I say Middle East, I'm looking at Egypt, Turkey, UAE, Saudi, all these countries all put together.
Right, sir. Yes, sir.
As I said, the business is good, but the margins have been affected. About probably, Vivek, 7%, 8% of the total top line.
12%.
12%. There we go. Okay. 12%. It's definitely a significant number. We're trying to make that up from other geographies and, you know, including India. So far in the month of March and April, we've been able to do a good job. We'll see what happens in the future.
Sir, if the Middle East situation was absolutely normal, then would we increase our exports from this region? I mean, all the countries which you mentioned.
Of course.
Can, I mean, would we, because, you know, do we have any incentive to do, like higher margins from this, region or?
No, no, that's not. This is a strategic region that we've developed over a few years, and we'd obviously like to make sure we keep the market share and make sure, hope the customers also are healthy and do well. Some of it is out of our control. Whatever is in our control, we'll try and do our best.
Right. Sir, are we exporting anything to the?
Sorry to interrupt, Mr. Panchwani.
Okay. He can finish the last question, and then he can ask the next.
Yeah. Just this is a related one. How much is the % from Europe and U.S.?
No, Europe and U.S. is very less. I would say less than 3%-4%. 2%-3% maybe.
Thank you so much, sir, and wish you very best.
Thank you.
Thank you. Your next question comes from Hiren Boricha from Sequent Investments. Please go ahead.
Yeah. sir, I have a clarification question. You mentioned we are looking for 5%-10% growth. That's a volume number or the revenue number?
No, I didn't mention 5%-10% growth, no. I meant compared to, I mean, we expect the growth to be more for the whole financial year compared to last year, but compared to Q4, which is a very strong quarter in terms of volumes. Yes, I mean, value-wise, very difficult to say because we don't know what the prices are gonna be. Yes, volume-wise is what I meant.
Let me rephrase, sir. Almost all our capacities are running at full utilization. Are we looking for same kind of double-digit, high double-digit volume growth this year?
In Q4, I'm talking about Q4, we were running at 90%-100%. Q1, Q2, Q3, we were not, right? We were at lower capacity utilizations.
Yeah. What kind of volume growth we are looking for this year, sir? I mean, for FY 2027.
As I said, the whole world is a little very uncertain right now. If the demand is there, and we do have capacity to grow by another in double digits, low double digits in volume terms.
Okay. The realization growth will be over and above that double digit, right?
It will depend. If the raw material prices crash, then it may not be, right? It just depends. If you see this year, FY 2026 compared to FY 2025, as Vivek mentioned earlier, we have the 14% growth in volumes but only a 4% growth in revenue.
Correct.
It's just April, right? We've just 1 month in the year, so it's very hard to predict what will happen to revenue. I can talk about volume.
Good. Yeah, understood. Thank you.
Thank you.
Thank you. The next question comes from Omprakash Dutt, an individual investor. Please go ahead.
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Thank you Omprakash ji, [Non-English content] it's all about the team. [Non-English content] That's only disagreement that I have with you. Thank you very much for your kind words. Thank you. Okay, any other question Sagar, or should we end the call? Hello.
We will take the last question from the line of Aditya from Securities Investment Management . Please go ahead.
Yeah hi sir, thanks for the opportunity. Just one question on NBR. How is that product performing for us? Because with freight cost increasing, have the imports come down and which is helping us?
I think in the short term, yes. Short term, yes. I think we are also seeing a pushback on because the prices have also been the highest in a very, many years or probably the highest I've ever seen. I think overall, yes, imports are down. Demand is also quite challenging in the current context. Things are margin wise better for the last couple of months. Overall also things are okay. NBR is okay, doing well, steady. We don't have capacity, so we're running at full capacity and our main endeavor is to ensure that we run at full capacity every month from now on. Yeah.
Understood sir. Thanks sir.
Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to the management for closing comments.
Thank you, Sagar. We thank all the participants and investors for attending the conference and for the continued trust and engagement. We also look forward to your continued participation in the next quarter's earning call. Thank you and have a good day.
Thank you. Ladies and gentlemen, on behalf of Apcotex Industries Limited, that concludes this conference. Thank you everyone for joining us. You may now disconnect your lines.