Ladies and gentlemen, good day and welcome to the Privi Speciality Chemicals Limited Q1 FY26 earnings conference call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the day of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal to the operator by pressing star, then zero on your touchtone phone. Please note that this call is being recorded.
Today, from the management side, we have with us Mr. Mahesh Babani, Chairman and Managing Director; Mr. R. S. Rajan, President; Mr. Narayan S. Iyer, Chief Financial Officer; Mr. Sanjeev Patil, Senior Vice President, Strategy; Ms. Ashwini S. Shah, Company Secretary and SGA, Investor Relation Advisor. With this, I now hand the conference over to Mr. Mahesh Babani, Chairman and Managing Director of Privi Speciality Chemicals. Thank you, and over to you, sir.
Thank you. Good evening, everyone. We began the year with healthy growth, reaffirming our beliefs. What a mind pursues a man cannot please. The mindset drives our innovation, resilience, and future readiness. This quarter, we are proud to share that Privi has earned the Platinum rating from EcoVadis, placing us in the top 1% globally for ESG performance. This is indeed a very big thing in this world. I think because of a dream we committed last year. This reflects our deep commitment to sustainability and efficient business practices, thanks to our team's efforts across sourcing, manufacturing, and energy management. We've also proposed a stream of organizations involving Privi Fine Sciences and Privi Biotechnologies and Privi Speciality Chemicals Limited with your company. This strategic move will simplify our structure and enhance efficiency and unlock new growth opportunities.
This will enable us to achive about, INR 5,000-INR 1,000 million, that is INR 5,000 crore and INR 1,000 crore EBITDA in the next three to five years. Further efforts of the last 10 years in Privi Biotechnologies have significantly increased intellectual property, which will also convert into a number of billions in the next couple of months. We hope that this will create a lot of intangibles for the company and also pave the way for many more products in the years to come, or we could even franchise this technology worldwide. Our products continue to perform well with strong demand across domestic and global markets, reinforcing our position as a trusted partner to leading fragrance houses and FMCG brands.
Looking ahead, our strategy remains clear to continue building a world-class aroma chemical company on number one position that grows sustainably and delivers value through innovation and precision. Thank you to our employees, customers, bankers, shareholders, and stakeholders for your continued trust. With that, I now invite Mr. Narayan to present the financial highlights of the quarter. Thank you. Narayan, please.
Thank you, sir. That was a great beginning to this quarter. Good evening to all my fellow stakeholders of the company. It's been a great quarter for us, going and rolling over on a great 2024-2025 year where we had in Asia just a couple of days ago, and reinforcing our position on a sustained growth journey that we have started, and we expect to continue this journey going forward. The quarter gone by has really reinforced our confidence in entire Privi with a steady and sustained growth. With continued operational execution and a favorable product mix, we are confident that Privi is well-positioned to sustain healthy growth and deliver robust profit margins going forward in the years to come. A few recent developments that have happened in the last quarter, which we have been sharing with all of you.
Our products and demand for the same have been good, and all our products are working at an optimal capacity. Our plan to expand our production capabilities, which was informed, are on track, and we expect this expansion to complete by past 2026. Several super Speciality aroma chemicals have been developed at the lab at pilot levels successfully, and which will propel future growth for the company with the current capacity expansion of the existing products. Let me give you a few financial highlights. The investor presentation has already been uploaded on the website and available with the stock exchanges. A synopsis of the performance for the quarter of one of the financial year 2025-2026 is as follows: the overall income on a consolidated basis was around INR 568 crore, which is a growth of about 22% on a year-on-year basis comparing to the Q1 of financial year 2024-2025.
The EBITDA numbers have been very healthy, INR 141 crore, which indicates a 45% growth over the previous year, same quarter. EBITDA margins have been an impressive 24.8% for this quarter, and we expect to maintain EBITDA margins at these levels going forward in the near future. The EBITDA margins have also grown substantially as compared to the Q1 of the previous year. Profit after tax on a consolidated basis is about INR 61 crore as against INR 32 crore, which was delivered and performed in the Q1 of the previous year. Overall, our revenue mix continues to be almost at similar lines, with exports contributing close to about 70% in this quarter also. Those were a few highlights on the financial remit. With this, I would like to ask the moderator and open the floor for any questions and answers. Over to you.
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 the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands up when asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Garvit Goyal from Nvest Analytics Advisory LLP. Please go ahead.
Hello. I'm all good. Very well. Very unique and congrats for a decent set of numbers. My question is on the demand outlook itself. Like we are catering to the global demand and looking at the kind of service situations we are having. Can you put some color on that? Like how do you see the outlook in the terms of customer delays or anything like that happening in the near to medium term? Do you anticipate anything like that?
As we have said on many occasions, about 70% of our business is contracted. In terms of looking at this financial year, we already have 70% and more of business contracted. The other thing that we always say is that the products that we make are essentially N minus one to essentially B products. To that extent, whatever happens in the overall economy doesn't really significantly impact our product demand because every day you'll at least take a shower, you'll wash your clothes, you know, brush your teeth, all of that. Therefore, we continue to assume that the growth for our products is stable. On top of that, the region in which we are operating and the nearby countries also are going through a whole transformation in terms of consumer demand and demand for essentially products.
That also we see as a significant factor which will result in sustained growth for our company. That's where we see. We believe that going forward, we have a sustained demand. The other aspect is that whatever products we make are consumed by the F&F industry. Within the F&F industry, we cater to all the customers who are from number 1 to number 15. When we make a new product, it has to go to one of these customers only. To that extent, our job is easier. That's how we continue to grow. Beyond our existing products, beyond the products which are going to come into play, we see that we are going to have demand coming in for a long time to come.
I'm sorry, you— I just have to follow up on... Yeah, understood. I just-- Follow up on your reply. You mentioned about some regions are going through some transformation in terms of the consumer demand is what you are witnessing. Can you put some more color on it? What is driving that? What kind of transformation it is and what kind of quantum effect do we see because of this kind of transformation? That was really helpful if you put some color on that.
As we have said in many of our presentations in person, a long time back, maybe 25, 30, 35 years back, a family would probably have one stove. I don't think there was any concept of deodorant then. Now, today, we have probably a stove for every person, probably a shoe for every individual in the family. We have deodorants there. We are just in the process of building the quarters for our staff members. These are, I would say, officer-level staff members. This is an example as to how life is changing. One of the requirements that have come about is that every customer will have a washing machine. I go back 20 years, and having a washing machine was only a rich guy's privilege. That is what is changing, and that's happening in the fastest-growing economy in the world, which is India.
Similarly, they're happening in the countries around us, and also in China. This is where we see a significant advantage because we have local presence and local manufacturing facilities. That's how we see significant growth here. We believe that the demand for our products globally grew by about GDP plus, maybe 1 or 2%. Within India, it would grow by between 8% - 10%, somewhere there. That's what we believe. That's the potential of our products. As I said, when we introduce new products, the other difficulty that you must understand is when we introduce new products, we have to only give them a share of the wallet of the same customer. Let's say we introduced Galax musk about three years back.
We were the last one to enter this philosophy, but because of our sustainability practices, because of being very competitive and being very within the art plan, we are very, very competitive. That's how we are now able to get our plan to almost 85% - 90% usage. That's the way Privi operates.
One more thing I want to understand. As you mentioned, because of the necessity, our product demand is already there irrespective of the tariff situation. Do you see any likely impact on margins because of this?
Yeah. One thing is that our export to the U.S. is only about 7% of our overall revenue. To that extent, you know, that is in case of a tariff situation also, we do not really foresee a significant impact on our margins because it's only 7% of our overall revenue. Obviously, some of the increase would be borne by the customers there. I mean, all the economists in the world are talking about that there will be inflation in the U.S. Some would be borne by our F&F partners, and some would be borne by us. Our impact would be fairly limited.
Got it. The guidance for the period index, right? 20% growth.
Yes, that's true. 20% growth has been our past, and that is how our future is also looked for, for sure.
Got it. Thank you very much, sir. All the best for the future. Thank you.
Thank you.
Thank you.
Thank you. The next question comes from the line of Vivek Gautam from GS Investments. Please go ahead.
Yeah. Congratulations on both set of numbers. Are we seeing some hesitation, some sort of capacity constraint so that the numbers which we got in the last quarter may not be sustainable in the coming quarters? The same would be the case of peak margin sort of also, which we are facing?
Hi. Good evening, Narayan here. No, not at all. It is not that there is any constraint on the high production capacities. Historically, the first quarter for our company always remains the lowest. As you go from second quarter, third quarter, you will see that the revenue and the quantum also going up. Now, don't ask me why, but it has been historically that it is in fact. We expect that, you know, with all the expansion and the augmentation that we have taken since the de bottlenecking that we have done, the capacities will keep increasing. As you are aware, we have highlighted that there is an increase in the capacity. That is also being taken care of. You will see more volumes as well as the revenue going up. Mahesh, I want to add something.
In short, we've converted our plants into continuous plants, and we've seen capacity augmentation because of that effect. In fact, if you've seen our margins improvement, it is also because of that. We want to continue the same plant continues with little augment. You get a lot of augmentation by changing the plant continues. You also get automation. You will see less labor and more production. That's what we've done in the last few months or maybe nine months. That is seeing the color from last quarter. This quarter will be, I think, it will be quite better than the past ones. In the coming quarter, we should find.
Okay. Can you just highlight the company USPs and the differentiating factors, what is the competition and which we have evolved? We have got a very good client list. What has helped you come to that level? How is the potential over there also for further penetration there and the new clients as well? Thank you.
It will be a long answer because it is actually efforts of Mr. Babani for the last two decades. To give you a point-wise answer in a few instances, the first and foremost is that we are a sustainable company. Whenever the chemical company, which is zero liquid discharge, we are a large chemical company and we are zero liquid discharge. In terms of ESG goals, as they say, we are right there at the top. We have platinum rating in terms of EcoVadis. We've seen these two things. The other thing is that for about 2/3s of our product, almost 70% of our product, we are fully backward integrated, which makes it extremely competitive in terms of cost factor. We never had any quantitative failures in the last two decades, in fact, from the family company.
That is, all the products that we make, they are also approved by all such essentials. We have a team which works on that. We never had any quantitative failures. Why wouldn't the customer prefer to buy from us? When they are looking to buy significant quantities of products that we make, they always want to have a supplier whom they can depend on and who is competitive. It doesn't have to be L1, but it can be L2 or L3, not the lowest one, but one who is very, very dependable. That's what we found. We honored all our contracts in Pickens Inn. That's what has given a huge amount of edge to Privi.
Okay. I am basically new to the company, sir. Recently invested, so don't mind the question. I was just thinking of searching about Mr. Babani. He's coming from a real estate background and not an engineering background, commerce background. I think he has been able to build up the company at such a level. How come and what helped him, and how has it, as you can highlight the investment journey on his and also about the second generation or the next generation who is there to there because that is also very important for all the investors, sir.
We have a team of great professors who are committed to us. In fact, I would say I have the best team in the industry or in the chemical trade. We have undoubtedly faith in them. That's how we could do it in a running plant, expansion, because they know every nook and corner what safety is. Converting a company into continuous production is probably the toughest goal. One can plan a new one very easily, but to convert the present one into continuous is probably the biggest challenge. Secondly, you said about the construction plan, we have groomed actually 15 new professionals, not 15 existing professionals. Below there is a 40 right now. In the next couple of years, they'll be groomed. They have been sent to the best business schools like the International School of Hyderabad, IIM Ahmedabad, and several others.
Two of my colleagues are also going to Harvard for training. We are grooming a team which will convert this into a proper profession in our managed organization in the next three to five years max. I'm also not going to get old. I'm getting younger. By energy, I don't know how God gives energy when you plan right. We are not so worried. We have a great set of people managing the business.
What attracted you to such a risk factor, sir, coming from basically a commerce background? How come you landed up here?
If you see the risk factor was with an HQ for 10 years. I've read always challenged or for the next five years also to a challenge. In the last five to seven years, I think there's no better business than Speciality chemicals. There's no risk factor. We are a company now with all risks at a time. Very risk to, you know, risk is part of every life. I'm saying we are on an excellent journey. That's all I can say in a few words.
Thank you, sir. Thank you very much. Keep up the good work.
Thank you.
Thank you. The next question comes from the line of Rohit Sinha, from Sunidhi Securities. Please go ahead.
Thank you for taking my questions, and congratulations for a good set of numbers. Sir, first question is if you can give us just brief breakup on value and volume growth which we have yet in this quarter. I think from the last few quarters, we have been getting a benefit of price increase, which we have taken context revisions. One is on that. Any specific product which has contributed to a higher margin in this quarter, or it's just a, I mean, raw material benefit gains?
Hi. Good evening. As indicated in our previous couple of quarters, we have stopped giving you quantitative information, and we continue to do so in order to keep some of these in-house secrets within the company. Second, there has been a growth, definitely a growth in terms of the revenue we have indicated. We continue to grow broadly. What we have indicated at the beginning of the year is about a 20% growth, which is consistent of both volume as well as value. This quarter also, it is a culmination of both volume as well as value as compared to the previous year's same quarter. First quarter for our company always remains the lowest of all the four quarters. Having said that, this quarter, there is no such individual product which has contributed more or less.
It is a culmination of all the factors together because, you know, at the end of the day, on a very lighter note, if I just talk about any blend that a consumer has to make, he can't isolate one particular product to the other. He will require a batch of all the products. Only if all the batches of products sell, finally, the aroma chemicals can be sold around and which you and I consume. That continues to remain so, sir.
Lastly, I would also say that the efficiency improvement has been of great news while converting our plants to continuous, which is giving the profitability and not the price increase. Price increase, rather, I would say we are lower on price compared to last year, but we have better profitability, to be honest.
Okay. Got it. Secondly, on the camphor side, we are also working on pharmacogenic products if I am not wrong. Where have we progressed in that and what's the outlook there?
Camphor, we are doing extremely well. When there is so much of demand locally, we have no place for any other camphor to be sourced. Our focus, but as you know, it takes some time when we have to enter into pharma grade. Very shortly, I think progressive various studies are going around. I believe that should also flick around in five years. Our capacities are doing very well with regards to the entire camphor plan.
Okay. Great. Lastly, sir, if you can just highlight the contribution from the JV side in this quarter and probably the guidance for this year if at all possible.
Okay. On the joint venture, it's like this.
Yeah.
We are working with the largest F&F companies globally. Understand that these are extremely specialized proprietary molecules, so the quality standards are extremely high. Also, in terms of logistics, it takes some time between when we do a batch and then getting some approval. It is taking some amount of time, but it is on course in terms of number of products. In the coming time, you will see there's some sort of AWAC, you know, when the product gets approved. It takes some amount of time for products to really move through. The traction is very good. We will see this year, this quarter, actually, since it's in a very nascent stage, it is yet to break even. In the years to come, it will do more than that, and there will be growth also. We are also contemplating a bigger growth going forward in the same joint venture.
I'll tell you, the protocols are very severe to supply the fine products that we are making because several are going to flavor and several are going to very high-value perfumes. The protocols are very severe. We hope that this will be a hope. We are sure it will become better. It's a closed closet. As the company has got this, there are some systems where we have to qualify internally also, though it may be a joint venture. They treat it as a separate entity. We have to live with those systems. We are confident in the coming year, this will be a great success. In fact, to be honest, we are talking about expansion. Today, we have done only one. We are talking about 1.1, 1.5, and 2. They have already planned three more expansions where they are wanting to compensate the debt.
We've requested them for a lower price debt and rework the debt. We are in constant talks with them. Long-term prospects are far excellent. At the moment, we do face challenges because it's a huge project and the turnover ratio is pretty low compared to the size of the investment.
It's a great learning process for all our technical teams because these are really complex molecules.
Okay. I guess for a year also, it would be less than INR 100 crore kind of contribution, less than INR 50 crore?
Yeah, yeah, that's about it.
Got it. Got it. That is from my side. I'll come back in June. Thank you and best of luck.
Thank you.
Thank you. The next question comes from the line of Shreya from Oaklane Capital Management LLP. Please go ahead.
Thank you for the question. Excuse me, sorry.
You're a bit louder, please.
Yeah, excuse me. Am I audible now?
Yes, ma'am. Please go ahead.
Yeah. My question is in line with our long-term vision that when you have said that no single product would contribute 10% of our overall EBITDA by FY 2029. Could you elaborate on the progress in the current quarter, specifically, how has the contribution from the higher margin, like Galax musk and other recently commercialized molecules?
Okay. We have a, you know, favorite phrase in Privi. It's called teamwork makes dream works. If it's not that one product contributes to everything, it is all the products together is what the story is. Please do not request us to give any further details than these because these are proprietary information. All these products together do contribute for the growth. Don't get distinct by put up by one particular quarter. Our dreams and our plans are already in place. I would invite you to come to my heart. The projects are taking shape, and the traction for 5K, 1K stories, as our Chairman just said in the beginning, between the next three to four years is in place. The products are identified. The technologies are in place.
We are at the, in many products, we are at the lab to pilot scale, and that's how we see the growth happening for sure. In, I think, almost all the products, we already are in constant touch with our customers, which is what will lead to commercialization of these products very quickly, as what happened in Galax musk and other products also, as soon as we get those into production. That's what it stands for.
So what?
Sorry to interrupt, ma'am. Your audio is breaking.
I just came from the directory. Is it the writer's office?
Sorry?
We are not. It's not audible. We are not able to hear you.
Hello? Hello? Hello? Hello? Please come again.
You may join the queue again, ma'am.
Yeah, we are on track. We are on track. I think that we are on track.
Thank you.
Yes.
The next question comes from the line of Manan Madlani from KamayaKya Wealth Management. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. My first question is, over the years, you know our gross margins were in the range of earlier 40% - 45%. Now we are shifting towards, you know, 48, 49, 50%. Is it safe to assume that we'll be, you know, in the range of at least 45% - 50% in terms of gross margin for the next two years?
Manan, what you are talking about is made a raw material friend, and it is on the gross margin level. Let me correct you here. I understand that certain investors look at RMC and say that is the gross margin. To answer your question, the RMC friend will remain at these levels, what you are seeing, even going forward in the next couple of years as we can see and foresee ourselves. We expect to grow on some of the costs on account of debottlenecking and augmentation and cashier's process and some of the savings on the utility costs, whether it is the solar or better efficiencies and all. That's how the EBITDA margin will continue.
Our business's rates are north of 20% EBITDA margins. I'm not saying that even if RMC may go up for some products that we introduce, when north of 20% EBITDA will always be our guidelines.
Fair enough. Fair enough. Sir, the second question is on Privi Fine Sciences. Earlier, if I recall, one year ago, you mentioned somewhere around INR 800 crore of CapEx for two units. First unit, INR 300 crore CapEx. Second unit, INR 500 crore, in which we will get 2X of asset turnover and a similar range of EBITDA margin that Privi Speciality is having. I can see from the press release INR 300 crores of roughly the figure that we are having. If I do the back calculation, like we need INR 500 crores of CapEx in Privi Fine Sciences. Could you please throw some color on that, like what's the vision for the next two to three years and what's the potential from that company?
Like I said in my opening speech, we are confident of making this into a INR 5,000 crore company together. Let me, three and a half, four will be from Privi and about INR 1,000 to 1,200 will come from Privi Fine Sciences. We have done a great amount of CapEx in Fine Sciences already, and we have a couple of hundred crores to be added more to CapEx. Exactly INR 400, maybe the number is maybe a little lower. We don't have the exact, but we are currently investing only in our Lote plant, and Privi will invest further. In the future, by the end of this year, it will be one Fine Sciences. The consolidated CapEx, I think, would now be to go to a level actually worthwhile, but it will be really not a highly leveraged company.
We could see a INR 5,000 crore revenue in three to four years for sure with at least INR 1,000 crore EBITDA. Minimum. Just like north of 20 can be 1,050. It can be 1,100, 1,020. That will still maintain. That's our guidelines we have within our internal committees.
The reason why the merger was, you know, then now was that the products that we are working on in Lote and what will happen in Gujarat also are at the stage at which they can be, you know, capitalized. Some of these products would be made first time by the route that we are making, which is a renewable route, and they would be a game-changing kind of products. We have advanced substantially in those areas. Therefore, in terms of revenue growth as well as the margin there, as Mr. Babani just now said, we are on track there.
Okay. Sir, this CapEx, this will be done through internal approval plus debt or some level of equity increase we might see?
It will be a mix of everything. You know, equity is expensive. That is the reason to see our cash accruals that we are doing and the internal accruals that we are generating. I believe most likely it will happen on a debt and an internal accrual combination because this capex that we are looking at to achieve a 5K, 1K number is over the next two to three year period. We will take the call as it goes around. It's going to be internal accrual and debt from the batch.
Okay. Lastly, sir, one suggestion. I understand due to parallel reason, we are not sharing the volume for individual products. Sir, some level of volume data would really help us. Like at least give us a commodity, I mean, not commodity, but our core products, phenol plus fine. In the second segment, you can give all the other products. It would help us in understanding future growth.
I do, because since you are an extended shareholder of mine, it's in your interest not to give me this security of ours.
Thank you for the very good report that you have actually shared around. Honestly speaking, I did not be able to share much further details on the quantitative aspect. I'm sorry for that.
Okay. Fair enough. Thanks a lot. That's it from my side. I wish you all the best.
Thank you, Mars. Looking forward to meeting you.
Yes, sir.
Thank you. The next question comes from the line of Vignesh Iyer, from Sequent Investment. Please go ahead.
Congratulations, sir, on a great set of numbers. Just one question from my side. I wanted to understand what is the net working capabilities for this quarter as of end of this quarter?
It's about 140-odd days.
Okay. We would be maintaining this number around this 135- 140 days because for the last two years. Okay, sorry. Please.
Okay. We have done, we'll be bringing it down. Our aim is to get it down to 120 - 125 days, and we'll work towards that.
Okay. Fair enough. That's all from my side. Thank you.
Thank you very much.
Thank you. The next question comes from the line of Dhara Ganatra from ValueQuest. Please go ahead.
Thank you for taking my question. Am I audible?
Yes.
Yes, ma'am. Please go ahead.
Coming back to the gross margin question, apart from what you have mentioned about capacity augmentation-related benefits, what are the other drivers for the gross margin expansion that you're seeing from almost 44% - 50% now?
Basically, you know, as you are aware, a few quarters ago, we have stated that we have been manufacturing certain Speciality products from the by-product streams and by-products of our products, like for instance, from Galax musk, a few such products. Then CSC by-products, we have started converting and making value-added products like 1,4- Cine ole, 1,8- Cine ole, Terpinen- 4- ol, all this Limonene and DDTO. These products, what used to be sold at a much lower price than the price of a conditory lot as a by-product, you know, they are starting churning and giving us a good margin on this. This is one part of the increase on the Speciality products using the by-products and by-streams. Secondly, as indicated, a lot of savings on the utilities and internal churning. With the production capacity completely being utilized, your fixed cost gets spread over.
That's how these margins have been improving. We expected this in the past. We are working towards this. With that, as our Chairman happened to indicate, with all this debottlenecking that we have done, you are able to see it. Now we are believing that our EBITDA margin will continue to remain at this upwards of 20%, which we have demonstrated over the last 10 quarters. Thank you.
I had another question as well, which is more on the capex plan that we've had. One is investment towards Privi Fine Sciences. The second is increasing the capacity from 48,000 tons - 54,000 tons. If you can help us break the number for the CapEx that are planned for the next two years.
Okay. In order to achieve a vision of 5K, 1K, broadly as indicated in our last call also, there's an overall CapEx of about INR 1,100 crore we expect. The first phase we have started within a CapEx amount of about close to INR 280 -INR 300 crore. That is on. This is what we have also indicated in our presentation, which has been uploaded. I believe you would have seen that also. This is on track. Some of the expansions have started giving results from this second quarter, the next couple of months, and more so from the first. The entire phase one should be completed by this year-end, which will enable us to maintain that 20% growth even in the next couple of years.
Meanwhile, as we keep talking about, with regards to various new products that you have talked about on the phase two, phase three, we have already made applications for the EC, that is environment clearances, etc., wherever it is applicable because these are new products. That will take some time. Parallel to what we have done, as you are aware that in India, sometimes EC permissions and all may take some time. We have gone with the first phase of expansion. Parallely, looking at the expansion of the phase II, somewhere around from second, third quarter of this year, get those permissions, which will enable our company, your company, to maintain the 20% plus growth for the next three to five years for us to work and achieve the 5K, 1K vision.
Sure, sir. The last one that I had is Privi Fine Sciences' pipeline. If you could throw some more light on what kind of products are we looking at there.
One of the key products that we are working on is called Cyclopentanol, which is currently available in the market from petroleum source, usually making it from a renewable source from almost the West. That is a huge product which has applications in aroma chemicals, as well as applications in the pharma industry, but also applications in the electronic chip industry. That is the major product that we are working on. We are also working on other products at Lote facilities. That is what we have done, wherein we make flavors, which are used in making toothpaste and all that. Those are the kind of products that we have. That is key to give you some color about these products which are being planned for the next three years.
Sure, thank you so much.
Thank you. Before we move to the next participant, a reminder to all participants, you may press star and one to ask a question. Thank you. The next question comes from the line of Kush Shah from Niveshaay Investment Advisory. Please go ahead.
Hi. My first question would be, like we mentioned earlier in the beginning, that we've been manufacturing a product for courier. Can you provide us the details, like what would be the additional capacity, what would be the revenue and the margin after preparing for the courier?
[audio distortion]
Kush, if it's this product you've talked about, because there was some sound behind you, it got completely subsided.
Sorry, since I lost her, there is some background noise. May I request you to move to somewhere quieter?
Hello. Now I am audible?
Now it's better. Please go ahead.
Sorry, if you would like to repeat your question.
Yeah, sorry to go ahead. I heard you had mentioned in AGM that you will be manufacturing a product for Colgate. Can you provide us a detail that how much would be the additional capacity and what would be the revenue and charges further after catering to Colgate?
Yes. I am not going to talk about as to how much is going to be the quantity and all. That is the first product that, as you just now stated, to the question as to Sahana with regards to, you know, the product manufactured in Givaudan facility here. One of the products is a product known as Anethole, which is being used in various toothpastes, etc. That definitely we are on track, and we should be fast selling it, you know, going forward. Very strongly.
Okay. Thank you. My second question would be, you had also mentioned that in upcoming three to four years, we will be doing INR 5,000 crore revenue and around INR 1,000 crore EBITDA, which would be implied around 20% margin for the company, for our company. Now roughly we are doing the INR 450 crore EBITDA, so it's around 22% EBITDA margin. Is it the margin would be sustainable in the coming three to four years, 20% - 22% around, or is it?
Yes, we have been stating this and indicating. We also heard our Chairman mention that we expect to maintain and manage these so-called margins that we have achieved.
Okay. Thank you for that. That's from our side. Thank you.
We are committed to it. Of course, world goes, we do better. If there are challenges, we come back to you. I don't think there are challenges. We don't see no challenges.
Okay. One more question. Last question would be the U.S. FDA site. Is there any particular sticker price you are?
Sorry to interrupt, sir, you are sounding very low.
Hello. Am I audible now?
Now it's better, sir. Please go ahead.
My last question would be around camphor U.S. FDA site. At which price are you selling? To whom are you selling? What would be the uptick from a major player?
I think I already answered it to our earlier question. There is so much of demand domestically that, you know, our plates are full. We're not being able to cater to the overseas thing. However, the feasibility studies are on. As and when it finishes, I believe we will, you know, we should be in a position to start catering to the overseas market too.
Okay. Okay. Thank you so much. Thank you so much. That's from my side.
Thank you. The next question comes from the line of Nikhil Porwal from Perpetual Capital. Please go ahead.
Yeah. Hi. Thank you for the opportunity. Again, congrats to the whole team for a great set of performance. I just have one question. Most of them have been answered. The gross margin expansion roughly year on year is around 7%. While we've seen only 3% of that convert to EBITDA margin expansion. From now on, how do we look at other expenses as a percentage of sales going forward?
See, it all depends on the overall product mix that we do. For that, if you break it up into quarterly, you may see one to the other happening around. Otherwise, primarily, over the last two years, our gross margin, that is the R&D front that we are trying to talk about, has been in that level of about 55% or 55% - 57% or so, which with various augmentation and process evaluation, we have been able to bring it to between 53% and 55%. I expect the momentum to be continued and will remain at this level going forward also. With regards to some of the other expenses that have happened around, you are aware that there has been a savings on account of various utility expenses, which has also led to a 100 basis - 200 basis point on the overall EBITDA margin.
Last year, there was an increase in the telecom distribution expenses, primarily because of various stoppages on the U.S. port, whereby we had to ship quite a few quantities. This was also addressed by us in some of our investor calls and more so specifically in our March call. This led to an increase in the selling and distribution expenses. We broadly expect that expenses over a larger day will come down going forward also, sir.
Okay. Second, to the particular product Prionyl, anything on how has that shaped up since you started the plan three years ago? How do you look at the demand for the product? Do you have a competition that is coming up with the plan for the single product?
We have a, first and foremost, we have a unique process because you know it's a green process compared to what other shadow finite processes are doing. We are a unique process. We've been doing that, number one. Number two, we also economize our scale in terms of it being located within Mahad and resulting in lower cost. That's how we see that you know we will be able to withstand the competition and also you know excel it. Last and most important thing is the quality that we make is also among the best, or I would say rather the very best in the industry, which is what is helping us in surviving this and also thriving. That's how we expanded the capacity of triangle.
Yeah, that's right. We are on track. We have increased the capacity also to answer your very first phase of the question.
Okay. Okay. Both of you are best. Thank you and all the best.
Thank you.
Thank you, Nikhil.
Thank you. The next follow-up question comes from the line of Garvit Goyal from Nvest Analytics Advisory LLP. Please go ahead.
Hi. My question is already answered. Thank you.
Thank you. The next question comes from the line of Vikram, an individual investor. Please go ahead.
Good afternoon, and thank you for the opportunity. I just had a couple of questions. One is with regards to the float in terms of your equity. Do you think it's a good idea to look at a split or some other way to increase liquidity given the promoter share being as high as it is and the float being so low? The second question also related to equity is I see disclosures that the promoters have sold some shares recently. Just wanted to understand the rationale and if there's anything else coming down the line. Thank you.
To answer the first question, it's a good idea. We are thinking about it because we want overall participation from almost every individual and to benefit from business growth. That's about the first question. The second question, you know, Mr. Rao is now over 80. At some point of time in life, one has to capitalize on whatever he has put in. That's where it stands. All that he has sold is only a fraction of what he owns. It's about 3.5% - 4%. That's where he stands. He is at age, commitment to children, family, and all of that. That's where it's at.
We will surely look at a split like you suggested. We are currently getting a lot of requests come from certain. We also want to consider this maybe in the coming times.
Got it. Thank you.
Excellent. Thank you. Ladies and gentlemen, due to time constraints, we'll take this as the last question for today. I would now like to hand the conference over to the management for closing comments.
Thank you. Thank you, every one of you, for joining this earnings call of Privi Speciality Chemicals Limited. It's always great to address you, to speak to you, to be amongst you. We definitely appreciate your time and show and definitely I am the interest zone in our company. For any further queries that you have or any additional questions that you want to, you can always get in touch with us at the Privi team or the SGA team. From the management side and from all the senior management side here on behalf of the Privi team, we thank you and look forward to meeting all of you over the next call. Thank you very much.
Thank you.
Thank you. On behalf of Privi Speciality Chemicals Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect.