Ladies and gentlemen, good day and welcome to the Archean Chemical Industries Limited Q1 FY26 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ranjit Pendurthi, Managing Director. Thank you, and over to you, sir.
Thank you. Good morning, everyone. A warm welcome to all of you joining our Q1 FY26 earnings call. Thank you all for taking the time to be here with us today. On this call, I am joined by Mr. N. R. Kannan, our Executive Director, Mr. R. Natarajan, our CFO, Mr. Rajiv Kumar, our DGM Finance, and the SGA team, who are our investor relations advisors. I hope you've all had a chance to go through the financial results and the investor presentation available on our website and the stock exchanges. I will start with a brief overview on the recent developments and market trends. Post that, Mr. Natarajan, our CFO, will give you a financial overview for the quarter. To start with the market overview, we are witnessing mixed trends across the chemical industry, with early signs of recovery in select segments.
Enquiry levels are steadily improving, indicating a more favorable business environment in the coming quarters and years ahead. However, the recent tariff uncertainties have obviously held many global MNCs from making decisions while reevaluating sourcing and investment strategies. The Indian specialty chemicals industry, nevertheless, is poised for significant long-term growth, supported by rising domestic consumption, supply chain diversification, and government-led incentives, etc. Recently, NITI Aayog has released a report in July 2025 outlining a roadmap for India to become a global chemical powerhouse with potential to reach $1 trillion by 2040. Despite mixed signals and industry challenges, Archean Chemicals has demonstrated resilience and agility while overall improving its operational performance despite volatility in the market. We began FY26 on a strong note, delivering a 30% year-on-year revenue growth in the first quarter with a steady product mix. Coming straight to our performance, we'll start with Elemental Bromine.
We continue to be India's largest manufacturer and exporter in this space. Elemental Bromine contributed approximately 30% of our total revenue in Q1 FY26, with overall business performance remaining broadly stable as compared to the previous quarter. We are confident, and we are seeing consistent demand and expect gradual improvement in volumes over the coming quarters. We're also seeing more traction from domestic clients at the same time. Just to reiterate again, any sharp movements in spot prices do not immediately impact us, as most of our contracts are long-term and bilateral in nature, therefore providing the underlying resilience to our business model. While the pricing environment has been challenging from the last couple of years for the chemical industry as a whole, we have reported a steady volume as well as some green shoots and uptick in price movements helping the bromine segment.
At the same time, our strong relationship with our customers, whom many of them have been with us for more than five, seven years, continue to place orders with us and continue to demonstrate their confidence in our capability to meet any extra volume that they need, both domestically as well as internationally. Industrial salt. As you all are aware, we produce a grade one superior quality of industrial salt that is primarily exported to the Far East and to over 10 countries overall. Our end customers are chlor-alkali manufacturers, particularly those in the chlorine value chain. Purity and consistency in delivery is a requirement for most of these global manufacturers, both on the chemical side as well as the petrochemical side. Globally, only a handful of manufacturers can meet this level of purity, and we are among them and continue to be India's largest exporter of industrial salt.
During the quarter, we have maintained sales volume of 1.1 million tons. As we have indicated in previous quarters, that would be largely our run rate and maybe a little bit more in the coming quarters. Earlier operational challenges, particularly related to logistics, have been largely resolved. With strong demand visibility and, once again, with long-term contracts with end customers across Asia, we expect to maintain this run rate and also continue to work towards increasing the volumes in the segment. On sulfate of potash, our trial runs are progressing very well. We are very confident with the efforts that we are putting in now on improving the conversion ratios. We are also working closely with a technology partner to progress from pilot scale to plant scale trials.
Activities to enable this, such as plant modifications, are under progress already, and we are now preparing for plant trials in the coming quarter and are confident of replicating the pilot plant performance where the trials have proved to be very encouraging. And we continue to believe that SOP will be a mainstay business for the company in the quarters and years to come. We are one of the few very global manufacturers of SOP, and the market remains very firm in terms of demand for this specialty fertilizer, of which we are one of the very few in the world who make it. As stated earlier, we expect meaningful contributions from this vertical in the second half of FY26. On bromine derivatives, our bromine derivatives operations are up and running and currently operating between 30%-40% capacity utilization.
Brine Fluids and catalysts for purified terephthalic acid PTA synthesis has contributed in the Q1 FY26 performance. We expect the utilization to gradually improve to greater than 50% before the end of this financial year. Once again, here, we are encouraged by the response we have received from clients both domestically and internationally, primarily in the Middle East, where the oil fields are based. Both products have been received well and have started engaging with ongoing certifications. Regarding the flame retardant FR project, as I told you on the earlier call, we have initiated work on this project, and this initiative is being actively pursued now, and we will provide an update in the coming quarters once the finalization has been done at our end.
As you're aware, FR is a very important chemical that's used primarily in electronics, and with the recent government initiatives on PLI schemes, etc., and the thrust for the electronic sector, we believe the scope for FR continues to remain robust domestically and continues to be so internationally. On Oren Hydrocarbons, which has been renamed as Idealis Mudc hemie, we acquired this company in 2024 and, as you're aware, took possession of the assets in the last quarter of that year. For the past six months, we've made steady progress in reviving and refurbishing the units. The trial runs have commenced in two units, and product qualification has also commenced. We have started receiving acceptance from certain customers domestically and internationally, and we continue to focus on starting the commercial production soon and starting to contribute meaningfully to the top line and bottom line this year.
On our new strategic initiatives, semiconductor, the land acquisition is completed for this project in Odisha, and we have also tendered out RFQs for running the project management office last month, and we expect to commence groundwork post-monsoon. On energy storage business, as you're all aware, we have invested in Offgrid Energy Labs, a zinc-bromide battery innovator with a robust IP portfolio of 50 patents and more across cathodes, anodes, and separators. In May 2025, we successfully acquired an 18.14% stake, with the remaining commitment expected to be fulfilled over the coming quarters. Offgrid Energy Labs has finalized the pilot site and vendor selection for the pilot plant in the U.K., marking a significant milestone. Upon successful pilot execution, we shall plan to scale up to a gigafactory, which is expected to take 18-24 months to materialize. On closing remarks, to sum up, our business fundamentals remain strong and robust.
We maintained healthy margins, deepened our relationship with clients, and laid a strong foundation to invest in high-potential sectors like bromine derivatives, semiconductors, and energy storage. We continue to be a net debt-free company backed by a robust balance sheet and disciplined capital allocation. This financial strength and business robustness ensures healthy cash flows and provides the strategic flexibility to invest confidently in long-term growth opportunities. With that, I would now request our CFO, Mr. R. Natarajan, to share the financial performance for Q1 FY26.
Thank you, and a very good morning to all the participants on the call. We are pleased to report a notable performance for the quarter gone by. To give you a summary of Q1 FY26 on a standalone basis, total revenue for Q1 stood at INR 2,915 million, 30% growth on a year-on-year basis. Our business mix is as follows in Q1: Bromine contributed around 30% of the total revenue, whereas industrial salt contributes around 70%. Sales volume of business is as follows: Volume sales of bromine for the quarter one FY26 stood above 4,000 ton level. Volume sales of industrial salt for Q1 FY26 stood around 1.1 million. EBITDA for the company stood at INR 958 million in Q1 FY26, a 13% growth on a YOY basis. EBITDA margin stood near 33% for the quarter.
Increase in other expenses during the quarter was largely due to an increase in packing, dispatching, and freight for higher salt sales made under ECL provision. Net profit for Q1 FY26 stood at around INR 518.5 million. On a consolidated basis, Q1 FY26 performance stood as follows: Total revenue for Q1 FY26 stood at INR 3,005.9 million. EBITDA for the company stood at INR 863.2 million in Q1 FY26. Net profit for Q1 FY26 stood at around INR 401.4 million. With this, we conclude the speech and open the floor for Q&A. Thank 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Sanjay Jain from ICICI Securities. Please go ahead.
Yeah, good morning, sir. Thanks for taking my question. I got a few of them. I'll list them. First, can you give us the bookkeeping exact sales volume and revenue for all the three segments? That's one. Number two, there is a purchase of goods, which is a very unusual item in our P&L. Can you help us understand what is the purchase of goods we have traded in this quarter? Number three is on the gross profit margin in the accounts, which is standalone minus consolidated. Last quarter, it was 25%. This quarter, it is 5%. There's a steep deterioration in that. Now, it is just because trial and hence volatile, or how should we see this gross profit margin on a steady-state basis? Number four, on the bromine guidance, you mentioned 22,000-25,000 metric tons for FY26 and 4.5 million for salt.
Does that hold good for the year, seeing how the quarters are unfolding? These are my questions. Thank you.
Yes, so for sure. Product-wise revenue for Q1 FY26 is totally INR 279 crore. Out of it, industrial salt is INR 194 crore, and bromine is INR 84 crore, and sales metric ton is 1.1 million of salt, and bromine is 4,054.
₹54?
Yeah.
And SOP?
SOP is 52 metric tons.
And revenue?
Total is INR 279. SOP revenue is INR 26 lakhs.
₹26 lakhs, not material. Got it. Thank you.
Thank you. Our next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Yeah, thank you, sir, for the opportunity. Sir, my question is onto the bromine side. Sir, when we look at the global players commenting, so whether it is in agrochemicals, pharmaceuticals, and on electronic side, most of the companies have stated that the demand is weak, and their Capex, what they are planning for the next two years, that has been also cut by roughly 40%-50%. So structurally, it seems like the demand will remain weak. But, sir, our guidance of 20%-25% in bromine. So, sir, just want to know this guidance which you have given, what is the confidence you have got in terms of data, if you can just mention? And what is the outlook in the bromine segment in the global market?
So thank you for that question. I'm also going to answer Mr. Sanjay's question from the previous segment, which I think was I think one of them was left unanswered. So on the bromine and salt volumes, there was a question if they will hold good. I think to answer that question, Sanjay, they will hold good. As you are all aware, these are long-term contracts that we have in place, and I think customers continue reposing faith in both the supply side with us as well as their own operations where they continue to consume. So at the moment, both remain strong for us, and the offtake continues almost at 100% of what we make, we're able to sell. So that is answering the previous question.
Coming to your question on the market itself, I think bromine on the pricing in the last few months, we are seeing a little bit of an uptick, as I mentioned. I think the readjustment of product portfolios by various agrochemical companies across the globe as well as India and the chemical companies in China where we sell and export bromine to, I think they have been quite resilient, and there has also been an uptick in some volumes in some of these chemical companies in terms of sales, whether it be within Asia or whether it be exports from India. I think we are starting to see that during conversations with some of these manufacturers. Now, obviously, each company is unique in how it operates, what are the strengths, what are the constraints within that environment.
So however, I think our history has shown that even in a tough market, I think our company has continued to be very resilient in volumes for sure, and we've also tackled pricing in a very methodical manner because most of these, again, are locked into contract.
Okay, got it. So sir, these long-term contracts which we have signed, ideally, sir, from next quarter, if we look at what guidance you have given, this quarter, we have got some 4,000 tons of a run rate in bromine. To achieve that number, what you've said of 20%-25%, ideally, the next quarter bromine run rate should be around 5,500 tons. So are the long-term contracts in place so that these numbers would be achieved?
I will answer that question in a different way. I think our order book is full, and like I said, today, and it has been in the past the same way, whatever we're able to make, we're able to sell.
Okay, got it. Sir, coming to the other businesses of so like the bromine derivatives, sir, the difference in top line, like INR 292 crore on consolidated, and what sir has given, so the revenue from bromine and salt, they are INR 278. So the difference is into the bromine derivative?
Yes. We are going about INR 25 crore, close to INR 23 crore to be exact, but for the first quarter, and as the capacity utilization keeps going up, that sales will keep moving up to the rest of the year, but at the same time, we'll also be introducing two, three other products in the bromine derivative space.
Got it. Sir, we have seen some news has been floating in the global market that so toxic flame retardants, so there are chances that some of the countries might look to ban for it. How do you see this changing in our business? Like when we set up a plant, are we also manufacturing a similar set of the flame retardants?
I think the flame retardant portfolio, I think we'll come back to it when we finalize the plan because there are different kinds of flame retardants. And so I think there is regulation around certain categories of them. But at the same time, I think there is also, like I said, a large arena of products in the flame retardants. So as I said in my comments earlier, when we finalize the flame retardant portfolio, I think we will come back and answer that question with a little bit more clarity for all of you.
Sir, just one last question.
Sorry to interrupt. A request to all participants, please restrict your questions to two per participant. The next question is from the line of Krishan Parwani from JM Financial. Please go ahead.
Yeah, hi sir. Good morning. Thank you for taking my question. Two to three from my side. Firstly, when will our bromine price move up from current $2.4 per kg that we've been seeing from the last two to three quarters?
So I think we've moved, so thanks for the question, Krishan. So I think we've moved past that number. So we are closer to 2.5 and a little bit more, in fact, in some cases.
Okay. In July, you mean?
It will come through. I think it started already in May, June. So it's a mix of old orders and new. So you may not see the full impact of it. But as the old orders get extinguished and the new ones fully kick in, you'll see that come through this quarter and the next quarter.
Got it. And so only some clarification on the derivative business. Did you mention INR 14 crore for the derivative business or INR 24 crore this quarter?
INR 23 and change for this quarter. It's primarily come from the brine fluids, clear brine fluids, and the other products will get introduced over the next couple of quarters.
Okay. But when I do the math, like let's say INR 194 from industrial salt, INR 84 from bromine, and you have done INR 292 on a total top line basis. So it just comes to INR 14 crore from the bromine derivative. What am I missing?
No, the combined top line is INR 3,000 consolidated, INR 3,009, I think, or INR 3,005.
Okay. Okay. You mean with the other income?
It's INR 3,005.9 total revenue on a consolidated basis.
But that includes the other income, right?
No, no. Okay.
Product.
Yeah. This is a consolidated basis in which intercompany sales are set up.
Got it. Got it. Anyway, I'll move to the last question, which is, are we still on track to deliver INR 150 crore revenue from Oren Hydrocarbons in FY26?
I think that is the end of the product certification. Like I said, it is taking a bit of time, but at least we've actually started getting some local approvals, the local offices of MNCs. Certain Middle East customers who sell these to oil companies, I think, have tested it and approved. So the endeavor is to kickstart the sales in this coming quarter. I mean, I would like maybe to make an observation largely on the market. So I think the market for those products still continues very healthy. So it's just a matter of time for us to start and be able to sell. So I think we are getting there, and we are still hopeful of that.
So you don't want to lower your guidance of ₹150 crore revenue from there?
I think if I were to look at it conservatively, I would possibly lower it. I think is INR 150 realistic? I think we should aim for that.
Okay. Great. Thank you for answering my question, sir. Wish you all the best.
Thank you. Our next question is from the line of Rohit Nagraj from B&K Securities. Please go ahead.
Yeah. Thanks for the opportunity. Sir, we've had faced certain logistical challenges in the previous quarter. So in the recent quarter, I mean, recent past, are those challenges have been completely taken care of? And incrementally, that should not be a challenge from our growth perspective for the exports market. Thank you.
So thank you for the question. So yes, we have largely resolved them. We've added a lot more equipment, both owned and leased, and third-party equipment, both on the transportation as well as on the operation site. So as you can see, the volume has picked up, and we are hopeful that this run rate will continue. And we'll try to expand that a bit more.
All right. And on the salt side, generally, how the pricing behaves, I mean, has it been relatively stable over the last few years or on a year-on-year basis, at least, there is some price increase based on the operational increase and operation cost increase or how structurally it moves? Thank you.
So I think over the last year, well, let me correct that. Over the last six months, there has been a little bit of weakness, but that's largely made up by the efficiency improvements at our end because you have to also remember that on a global scale, right, the petrochemical business and the chlor-alkali business has not had the easiest of times. But nevertheless, some of the customers that we sell to are very large and very strong operationally. So we look for more continuity in the offtake, which has happened. All the customers continue with their offtakes. And I think the price has been, I would say, given all that's happened in the market, has fairly been resilient.
Yeah. Thanks for answering all the questions. Best of luck, sir.
Thank you.
Thank you. A reminder to all participants, a request to all participants also, please restrict your questions to two per participant. For more questions, please rejoin the queue. The next question is from the line of Pratik Tholiya from Systematix Group. Please go ahead.
Yeah. I thank you for the opportunity. Sir, our standalone entity reported a PAT of INR 18 crore. While our consolidated PAT was substantially lower at INR 1 crore, sir, if you can provide a precise breakdown of the difference of the INR 3 crore loss between the subsidiaries, that is, Acum Chemicals and Idealis Chemicals?
Sorry, but you'll have to repeat that question with a little bit more clarity because we could not hear you very clearly. We can hear you, but it's not very clear.
Yeah. Yeah. So what I was referring to, your standalone entity had a PAT of INR 518 crore, and consolidated PAT is substantially lower at INR 401 crore. So there is a negative difference of about INR 170 crore. So I just wanted to know the breakdown of EBITDA loss for the subsidiaries of Acum Chemicals and Idealis Chemicals. I just, our subsidiaries must have posted a loss, and that had impacted our consolidated PAT.
Okay. So your question is, at standalone, it's INR 500 crore, and why is it sorry, INR 50 crore, and why on a consolidated basis, it's lower?
Yeah, yeah.
Okay. Yeah. Okay. Understood.
That is because of the subsidiaries' initial losses being the first year of full operation. The few M&As, we have some small losses after setting off. That is the net, the total net profit.
Okay. So when we start a business in a new subsidiary, generally, the first few quarters, you buy raw materials and all more than your production for next one quarter or two quarters. And then you expense them out. So that is the difference.
Okay. And sir, how are things shaping up now for the subsidiaries? I mean, given that in the last quarter, you have said that the derivative business would achieve that positivity in this fiscal year. So how are things panning out?
I think, as I said earlier, I think despite the challenges globally and with all this tariff uncertainty, etc., I think the products that we sell, there continues to be a good demand for them, and we continue to have encouraging feedback from clients who we are approaching for approvals and technical certifications, so I think our only job is to now make the product, and I don't think sales is a problem.
Got it, sir. Thank you. Thank you for answering.
Thank you. Our next question is from the line of Archit Joshi from Nuvama. Please go ahead.
Hi. Good morning, sir. Thanks for the opportunity. Sir, just one question. I wish to get your thoughts on what we have been hearing about the anti-dumping policy that China is trying to implement or rather in the stage of implementation.
Sorry to interrupt. Archit sir, can you please keep your device close to you because the voice is breaking?
Okay. Is this any better? Am I audible?
Yes, sir. This is better. Yes, yes. Please go ahead.
Yeah. Sure. So sir, I wanted to get your thoughts on the anti-evolutionary policies that China is trying to implement. I believe there is a significant.
Hello? Hello?
Yeah. Archit, sorry. We couldn't understand. Archit what policy?
Sir, I believe that China is trying to implement certain policies to limit the capacity addition in the view of subdued pricing that is seen in the chemical industry. And I believe flame retardants also is one of the products where there is a significant bit of overcapacity in China. And they are trying to do something on that account with regards to creating a level playing field possibly or to cut down this deflationary pricing that we are seeing over the last maybe 18 months. So anything that we hear on that account, your thoughts on that?
To be honest, we have not really heard anything because we do exports every month, so none of us, in fact, just this morning, someone has said, "Can you please speed up the consignment?", and I think so I'm not aware of any such thing, so it would be hard for me to comment, but one of the things that you mentioned, what they're trying to do, I don't know what it is they're trying to do domestically, but obviously, there's a lot of policy reviews going on within China, but at the same time, they still need the bromine, so in that context, I think we are not concerned from at least what our customers are telling us.
Got it, sir. That's it from me. Thank you. Thank you. All the best.
Thank you. The next question is from the line of Dhruv Muchhal from HDFC AMC. Please go ahead.
Yes, sir. Thank you so much. Sir, if I look at the breakup that you gave of the derivative segment, so it seems the differential is because of the bromine sales that you do internally, which if I do the rough math, it's about 10% of your bromine segment sales, which roughly assuming 10% of your bromine volumes also you sell internally. That would mean, and last quarter, there was no internal sales of elemental bromine. So that would mean the elemental bromine external sales have declined quite a bit. So just trying to understand, was it just a timing issue or you're focusing more on your captive versus the exports or external?
Dhruv, thanks for the question. I'm just going to repeat it so that we understood you clearly. What you're saying is that you're asking us about the internal sale of bromine from Archean Chemicals to the subsidiary Acum, is it?
Yes. So okay. Just to clarify, sir, the bromine sales number that you have given, is it the overall sales or is it just the external sales? So what you sell to the subsidiary, is it recorded as sales?
It's the overall sales.
Okay. So the subsidiary sales are also given in the volume numbers, 4054 that you have given, that includes the elemental bromine sales to the subsidiary?
Yeah, so in the last quarter, we had about 400-odd tons sold to the subsidiary.
In 1Q ?
Yes. Q1 , yeah.
Yeah, so sir, that's what I was trying to understand. In the previous year quarter, your external sales were 4,700 tons, 4,700 tons. And this year, excluding your internal sales, it's about 3,600 tons, so there is a decent decline in your external sales of elemental bromine.
Sorry to interrupt. Dhruv sir, could you take your device a bit away from you because there is a lot of.
Yeah. One second.
Yes.
Hello. Is this better?
Yes, yes, sir. This is better.
Yeah. So sir, I was saying that your external sales of elemental bromine has come up from 4,700 tons last year quarter to about 3,600 tons this year quarter. So just trying to understand what's driving this.
So as you're comparing it to last year's same quarter.
Same quarter. Yeah.
Yeah. So we would probably have to come back to you. Mr. Natarajan, our CFO, will reach out and clarify that.
Okay. Sure. No worries, sir.
Yeah, and sir, we don't have that figure in front of us.
Sure. And sir, the second question was on the potash commentary. So if I'm not wrong, your commentary was incrementally more positive. So, have the pilot trials been successful, and now you're starting the plant-scale trials at your site, if I understood that right? And how do you see the progress? I mean, how does it happen? What are the timelines or what are the milestones that you will have to cover for it to scale up?
Sir, no, you're absolutely right. The pilot trials have been done, and they've been successful, which is now why we're moving to plant-scale trials. At the plant scale, we've already ordered the equipment that's required to be put into place, so that work is going on on the ground. And in the next couple of quarters, we will get that up and ready. And we are confident that we will be able to well, we have also harvested KTMS, which is our mixed salt, which is our raw material for the SOP plant for this year, already done. So that stock is also already available. So that will be also available to be used when the plant is up and ready. So in terms of raw material, we have it in place.
The plant-scale equipment is being put in place, which is why we said that we expect meaningful contribution to come this year in SOP.
Right. That's nice. And sir, this should also if I'm not wrong, this should also aid in ramping up your bromine volumes, elemental bromine volumes, once this plant is up and running?
Not directly, but you do have a point. There is an indirect correlation because the more KTMS we get, it would imply that there is enough brine available for more bromine as well. But that will be gradual. It won't be I mean, unfortunately, these things have to evaporate over a period of or a large area of land. It doesn't happen instantly. So I think.
Yeah. I mean, over a period of time. Yeah.
You're right. So the most important thing is, as you rightly observed, are we in place and are we doing those things? We are in place and doing those things. So you'll see that improvements coming over the next few quarters, much more than you've seen in the last two, three quarters.
Got it. And sir, last question is just on a particular point. Your EBITDA on a YY basis has grown by about from this year to last year's same quarter is about seven-odd crores versus just your salt sales volume have grown by about salt sales revenue has grown by about INR 80-odd crores on a YY basis quarterly. I would assume a salt business does about 25%-30%, 20%-30% margin. Just that delta should have contributed to your EBITDA, which is not completely getting reflected. So just wanted to understand, is there some drag in some business which is leading to this mismatch?
So, Dhruv, see, salt, while you are aware that we don't do product-wise margin, and it is also not possible in our, but yes, there's not much pricing pressure on salt. The lower EBITDA that you are seeing more comes from the downstream derivative vacuum, etc., overall consolidated performance.
Okay. So it's just the ramp-up of these subsidiaries which is taking some cost. And once that normalization happens, they should get reflected. Got it.
Correct. Correct.
Perfect. Great, sir. Thank you so much. This is very helpful. Thanks and all the best.
Thank you. Thank you, Dhruv.
Thank you. A request to all participants, please restrict your questions to two questions per participant. For more questions, please rejoin the queue. The next question is from the line of Rikin Shah from the Boring AMC. Please go ahead.
Hi, sir. I just have one question. Are we seeing any sort of inventory build-up on the geography where we are selling at the moment?
We're not hearing that from our customers, and a lot of them actually have always not just now have always been very lean on inventory, which is one of the reasons why they continue to lift and do the offtake as per contract.
All right. Thank you.
Thank you. Our next question is from the line of Chetan Doshi from JM Financial. Please go ahead.
Yeah. Thank you for giving me the opportunity. I have two questions. One is, this Idealis Mud Chemie, it is the we are going to start trials. So when the trials will be completed and how much it will contribute for the financial year 2026? And second question is, are we exporting anything to U.S.? And if yes, what is the quantity?
So the trials have already started on certain products related to the starch chemicals and as well as liquid chemicals for oil drilling. So the end markets are the Middle East right now. We have no exposure or business with the U.S. in either the parent or the subsidiaries.
Okay. And how much these Idealis Chemicals will contribute for the full financial year 2026 in the top line?
Top line, we have given our guidance of INR150 crores, but I think someone had asked earlier, are we maintaining this guidance? So we are, for the moment, sticking to it. But I would also leave the door open a little bit because the ramp-up or the technical approvals are taking a bit more time than we anticipated. So we're already halfway through the second quarter. So I would more focus on actually getting the plants up and ready and start shipping out products because you have to also realize that most of these businesses are not done over one or two quarters. They are contracts. So the robustness of the long-term offtakes are more critical for us than be very concerned about immediate one or two quarters, especially for a business that we are trying to revive that we bought in NCLT.
So that's our focus right now, to get certifications of the products and to start the sales.
This will start from which quarter?
This should start from the third quarter.
Good luck. Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over.
Sorry, I think there was one question Sanjay's that was still unanswered. The purchase of goods is actually generally what happens is this is good for all to know. So in August and September, we generally get some rains, unexpected, unseasonal. Sometimes it moves on into September. And we always have a little bit of a difficulty in restarting shipments from our regular facility at Jakhau. And then there's a delay of another two weeks to three weeks. So what we have done to mitigate that risk because we always run at 100% on salt exports and logistics, we have purchased some extra material as a buffer, and that will allow us to kickstart the season immediately without having to wait post-monsoon from Jakhau.
So this gives us that buffer for at least two shipments with a clear runway of being able to lock in that revenue and not have to wait on that quarter. Please continue.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you. And over to you, sir.
Thank you very much. Thank you, everyone, for joining us on this earnings call. We appreciate your time and continued interest in our company. In case of any queries, please do get in touch with us or SGA, our investor relations advisors. And we look forward to meeting all of you over the next call. Thank you. Have a good day.
Thank you, sir. On behalf of Archean Chemical Industries, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.