Ladies and gentlemen, good day, and welcome to the Acutaas Chemicals Limited Q3 FY 2026 Earnings Conference Call, hosted by JM Financial Institutional Securities 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 the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Krishan Parwani from JM Financial. Thank you, and over to you, sir.
Yeah. Good evening, everyone, and thank you for joining us on Acutaas Chemicals Q3 FY 2026 earnings conference call. Today, we have with us Acutaas Chemicals management, represented by Mr. Naresh Patel, Chairman and Managing Director, Mr. Abhishek Patel, Vice President, Strategy, and Mr. Bhavin Shah, Chief Financial Officer. I would now like to invite Mr. Bhavin Shah to initiate the proceedings. Over to you, sir. Thank you.
Thank you, Krishan. Good evening, everyone. We are pleased to welcome you all to our earnings conference call to discuss Q3 FY 2026 financials. Please note that a copy of our disclosure is available on the investor section of our website, as well as on the stock exchanges. Please do note that anything said on this call, which reflects our outlook towards the future or which could be construed as forward-looking statement, must be viewed in conjunction with the risks that the company faces. The conference call is being recorded, and the transcript, along with the audio of the same, will be made available on the website of the company and exchanges. Please also note that the audio of the conference call is the copyright material of Acutaas Chemicals and cannot be copied, rebroadcast, or attributed in press or media without specific and rewritten consent of the company.
Now, I would like to hand over the floor to our Chairman and Managing Director, Mr. Naresh Patel, for his opening statement. Over to you, sir.
Thank you, Bhavin. Good evening, everyone. I hope you all, you are all doing well. Wishing you and your family a very happy and prosperous New Year. I will provide an overview of the strategic initiatives we are undertaking before handing over to Abhishek for detailed business updates. As you know, Acutaas is evolving into a diversified chemicals company with multiple business verticals. Allow me to walk you through each of them. Starting with our core business of pharmaceutical intermediates, our focus remain on sustaining the robust growth engine that we have built over the years. Additionally, we are actively pursuing CMO and CDMO opportunities to accelerate growth in this segment. We have developed a strong pipeline, with four products already validated, and we expect some of these opportunities to begin contributing to our top line from FY 2027 onwards.
Moving on to battery chemicals business, I'm delighted to share that we inaugurated a new block at our Jhagadia facility, dedicated exclusively to battery chemicals on 19 January 2026. While Q4 will primarily be a quarter of trial production, testing, validation, and the commencement of the commercial operations, we expect this business to ramp up significantly from Q1 FY 2027. Our third important vertical is semiconductor chemicals, where we are in the early stage of seeding business, both in BFC and Indichem. Our South Korean joint venture to new customer in South Korea, Japan, and Taiwan. We are witnessing encouraging traction from clients in both businesses. At BFC, engagement with our Japanese customer has been very promising. In other than various products at Indichem, we have already initiated discussions with various clients regarding our products offerings.
Overall, I believe that FY 2028, these three business verticals will operate as independent, self-sustaining growth engines, each contributing meaningfully to our overall top line. Coming to our quarterly performance, I'm pleased to report that we continue our strong growth trajectory. Revenue from operations came in just shy of INR 400 crore this quarter, which was accompanied by our highest ever margins, leading to our profit after tax for the quarter, crossing the milestone of INR 100 crore mark. I will let Bhavin discuss financials in detail later. To conclude, based on the strength of our current order book, we are revising our revenue guidance upwards from 25% to around 30% growth for FY 2026. With that, I would like to hand over to our Vice President of Strategy, Abhishek Patel, who will walk you through the detailed business update. Over to you, Abhishek.
Thank you, Naresh [Foreign language]. Good evening, everyone. Let me take the opportunity to share further insight into our business performance for the quarter. Starting with advanced pharmaceutical intermediate segment, this segment delivered a robust performance, with revenue of INR 351.1 crore in Q3 FY 2026, reflecting a strong year-on-year growth of 46.8%. The growth was primarily driven by our CDMO business, complemented by steady contribution from our core advanced pharmaceutical intermediate segment. Moving on to the specialty chemical segment, revenue for this segment stood at INR 42.1 crore during this quarter, registering a strong year-on-year growth of 17.2%.
...Our commodity chemical sub-segment recorded consistent growth, driven by high volume, stable pricing, which was supported by a recovery in BFC business. Now, turning to the CapEx, capital expenditure. CapEx for nine-month period stood at INR 143 crore, primarily directed towards Jhagadia site for battery chemical project and pilot plant project at Sachin site. Let me provide some additional updates on our key projects. Regarding electrolyte additive CapEx at Jhagadia, as Naresh [Foreign language] mentioned, first phase of electrolyte block is inaugurated on 19th January 2026. The second phase of CapEx is currently ongoing and is expected to be completed within next six months. Pilot plant CapEx is slightly delayed due to delay in equipment arrival. It is now expected to be completed by Q1 FY 2027.
Due to spillover of second phase of battery chemical CapEx, as well as the pilot plant CapEx, total CapEx for the FY 2026 expected to be around INR 220 crore versus INR 250 crore, which we guided in our previous call. Apart from this, another major cash outlay during the year will be our investment in South Korea joint venture, Indichem. Till now, we have invested close to INR 130 crore in this joint venture. The total investment we announced for this joint venture was around INR 200 crore. We have sufficient cash on hand, as well as strong cash flow generation to fund this cash outlay. Now, coming back to the business updates. Starting with pharmaceutical intermediate segment.
For ex-CDMO business, we have a couple of new products that have already started ramping up, and we believe they will continue to drive the growth. For some of our top products, we have been able to deliver higher single growth, higher single-digit growth. Now, you might look at the numbers and observe that this business is not growing as strongly as it used to. This is because we have carefully taken strategic decision to review our product portfolio and let go low-margin product. That's why you see, that's why you see now quality growth is coming. Coming to CDMO business, as Naresh [Foreign language] mentioned, four products which have been validated in the current financial year should start contributing to the top line from FY 2027. Additionally, we are expected to complete sampling and validation batches for some more products in coming quarter.
This shows our CDMO pipeline continue to grow strongly, which will take us swiftly to our CDMO guidance of INR 1,000 crore by FY 2028. On battery chemical side, we already have order in hand with a good revenue visibility for FY 2027 for VC and FEC. As mentioned in earlier calls, we have added two more products to this business, and these products are expected to start contributing to top line from mid-FY 2027. On semiconductor, conductor business side, Naresh [Foreign language] covered most of the important update in this remarks. The only thing I would like to add is the CapEx for the Indichem JV is progressing as per the plan. Finally, on a note of corporate excellence, we are proud to share that our founder and CMD, Mr.
Naresh Patel has been recognized amongst the IDFC First Private and Hurun India's top 200 self-made entrepreneurs for the Millennia 2025. This prestigious ranking celebrates the visionary behind the most valuable companies founded in India since 2000. Our stakeholders, this recognition is powerful validation of the entrepreneurial grit and the leadership that has shaped our company's trajectory. As we continue to redefine our place in India's economic future, we remain committed to the same spirit of innovation and value creation that is awarded owners. To conclude, as Naresh [Foreign language] guided, we expect revenue from operation to grow by 30% in FY 2026. We also upgrade our EBITDA margin guidance from 20 to 30, uh, to 32 to 35% range for our full year.
With that, I will now hand over our floor to Chief Financial Officer, Bhavin Shah, who will walk you through the financial update. Over to you, Bhavin [Foreign language].
Thank you, Abhishek [Foreign language]. I would like to briefly highlight the key performance metrics for the quarter and nine months of FY 2026 before we open the floor for questions. Let me start with the quarterly performance. Revenue from operations for the quarter reached INR 393.2 crore, representing 43% growth YOY. Gross profit for the quarter was INR 224 crore, reflecting a 26.1% increase compared to the same period last year. The gross margin expanded by 1,073 basis points YOY to 57%. Gross margin was driven by improved product mix. EBITDA for the quarter was INR 150.7 crore, which represent more than twofold increase compared to the EBITDA of the same period last year. EBITDA margin were at 38.3%, up 1,335 basis points YOY.
EBITDA margin was driven by expansion in gross margin as well as operating leverage. Tax for the year - Tax for the quarter was INR 106.2 crore, up 133.7% year-over-year. Tax margin for the quarter were 27%, which show an expansion of 1,049 basis points year-over-year. Moving on the nine-month FY 2026 performance. Revenue from operation for the nine months were - nine months of the year, reached INR 906.6 crore, representing 29.8% increase year-over-year.
... EBITDA for the 9-month FY 2026 was INR 296.9 crore, which was 2x compared to the same period last year. PAT for 9 months, FY 2026 was at INR 222.1 crore, which more than doubled compared to the same period last year. Moving on to the balance sheet item. Net cash and cash equivalents were at INR 129.5 crore, as on 31 December 2025. Our working capital for the quarter improved to 111 days. This mainly on account of higher debtor days, whereas inventory and creditors remain stable. With that, I request the moderator to open the floor for questions. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Rikin Shah with Boring AMC. Please go ahead.
Hi, sir. Congratulations on a blockbuster performance. So-
Thanks.
First, I wanted to ask, you know, the overall direction of the semiconductor chemicals, both the verticals. So in the last call, we have mentioned about some new product launches and trial batches for Baba. And also, if you can shed in, you know, the same question, shed some light on the, what do you say, the guidance of the facility in Korea coming up.
On Baba Fine Chemicals, business side, as we discussed last time also, as our endeavor is to promote our products ex of various business, which we were not marketing earlier at the time of acquisition, that we have started marketing in a newer geography, and that has shown a very good result. You can see the Baba Fine Chemicals business has started turning around in terms of revenue. I think the last quarter was more of a kind of bottom line, bottom point for us, from where we have started positively from this quarter onwards. Going forward, we are expecting some more traction coming in business. It will be a slow process, but we are already on that good part of growth, so it's an encouraging result for us.
From Indichem side, the CapEx has started, almost four months back, and it is progressing well as per the plan. We have already invested INR 130 crore towards the CapEx, and hopefully by end of this calendar, we should be able, we should be able to complete the CapEx and start the business.
Got it, sir. All right. So, okay, so last quarter also, we had mentioned in non-CDMO business, and you also mentioned again, a change in the product mix. Also, you mentioned there is some conversion to flow technology. So my question is that, you know, some of the legacy molecules, they could have been transferred to flow tech much, much earlier. So what has essentially changed? And, you know, why has this, you know, increased this much right now? Just trying to reason with, you know, what is happening.
When we talk about the changing to the flow chemistry and all those things, that is not related to the CDMO business. CDMO business is a completely with close connection with the customer. We cannot right away change to any of those things-
Right, sir. I mean, I meant the non-CDMO business only, sir.
Yeah, sorry. For our CDMO business, this is a very standard process for us to look at every product on a monthly and quarterly basis. If there is any threat related to margin or any cost pressure, we do the cost improvement, margin improvement measure for this. So this is how we keep on upgrading our product, working on our cost on a regular basis. And those are the permanent kind of things which get ensured, which is the margin improvement. More of a margin improvement for this quarter is again because of the product mix only.
If you look at it, the gross or material margin level, it is an improvement of 1.2%, which is where you see the product mix shifting, and rest of the margin is coming from the operational efficiency.
Got it, sir. So what utilization would we be in at in Ankleshwar? And around the same line, sir, what is the plan for incremental pharma intermediate CapEx, post Ankleshwar is at peak capacity utilization?
At Ankleshwar plant, the utilization has been 40% for the quarter. Slowly, because, see, once the plant gets ready, which was completed last quarter only, so it's a time for products to get validated from the newer side, and slowly so it will start ramping up from that side. So newer products which are coming into the basket from our product portfolio and R&D line, that now we have started a shift. We have, we are doing with the Ankleshwar side, as well as some of the existing product, which we are just slowly transferring to the newer side. In terms of CapEx for this site, it is still premature to announce anything, but as we mentioned, this largely covers our growth requirement in FY 2028.
So before 1.5 year, we may come up with some CapEx plan based on the market condition and future growth requirement.
Got it. So you mean, 40% for block 3 or for the entire site?
For entire site, covering now the all block, available time for for availability of all block, whatever time it was.
Got it. You have mentioned three new CDMO manufacturing, you know, projects in H1 FY 2026, and you had also guided that they will ramp up in H2 FY 2026. So how has been the movement of these new CDMO projects, ex of, you know, other core CDMO molecules?
Example of first CDMO of which we are talking about, we have validated in total four number of CDMO projects have already been validated, for which we are expecting meaningful. These are already commercial products, but meaningful revenue we are expecting from next financial year onward. Meanwhile, there are many other products which are going for validation on a continuous basis, expected from in this quarter also.
Got it, sir. Just the last question from my side, in terms of sustainability of margins, gross margins, where, you know, what would be your outlook for that? For at least if you can't say for a few years, then maybe for FY 2027.
Actually, we are not guiding for any of our margin, but we can discuss at a relevant time for FY 2027.
All right, sir. Thank you so much. Good luck.
Thanks.
Thank you. The next question comes from the line of Sudarshan Padmanabhan with ASK. Please go ahead.
Yeah, thank you for taking my question. Actually, taking forward from the previous participant, I mean, now, two things. One is we know that the oncology product itself is doing well. You know, if we go by, you know, Orion's commentary this year, and also there is a lot of product life cycle expansion happening. So if I look at three years, and you're talking about, you know, the INR 1,000 crore, you know, target, how is, you know, the contribution from non-oncology products going to be? If you can give some color on the dependency of oncology and how are the other products in the pipeline.
So as mentioned, as we mentioned, we have already validated four more products, and during my commentary, I have mentioned this gives us the confidence that we'll be able to cross INR 1,000 crore mark for the CDMO business by FY 2028. So apart from that, already going oncology product, we have a good, very good, pipeline of CDMO products, in our product basket. In fact, that has been very encouraging, seeing as the kind of growth we are seeing for all those product development happening at our end.
Sure. And sir, then coming to the electrolyte, you know, the business that is on the battery chemical side, you know, now we are looking at vinylene carbonate and fluoroethylene carbonate, couple of products. But if I take two, three years down the line, you know, are we looking to expand this basket? I mean, what is the strategy here, in terms of growing the basket of products?
Yes, of course. This has been two pioneer settings, stepping stone kind of product for us, through which we get into this business. But as we discussed last quarter also, we have already commercialized, two more products in this space. CapEx phase two is already been announced, which is already under implementation and expected to get completed by Q3 FY... Q1 FY 2027. And there are additional furthermore products which are already under development and for, and for which business development is also going on, for which we, you can find our list of product at our website also.
Sure. And this will largely be towards the OEM, right? I mean, the battery cell OEM partner.
Yes.
From your side. Okay. Okay. Sure. Thanks a lot, sir. I join back to you. Thank you. All the best for the future.
Thank you. The next question comes from the line of Krishan Parwani with JM Financial. Please go ahead.
Yes. Hi, sir. Congratulations once again on very strong results. Just a couple of questions from my side. First, have you signed or are looking to sign any new CDMO contract for the four products that you have bought that have been validated, you mentioned?
Yes, of course. Those are already with the originators, and
A relevant contract will be signed as a relevant time.
Okay. Would you be, let's say, I know you will not be giving out the names of the products, but would you be, let's say, signing the contract or no?
Sorry, I didn't get you.
As and when you sign the contract, would you be announcing the same?
We will update, as and when some material update is to be provided, as per the-
Sure.
regulatory requirement.
Sure, sure, sir. Just one clarification. Indichem investment, you said INR 150 crore will be in FY 2026. Basically, INR 370 crore cash outlook in FY 2026, correct? INR 220 crore, the CapEx, and INR 150 crore investment.
... We have invested INR 140 crore by this year.
Okay.
With the completion of CapEx electrolyte, it should be 220.
Okay.
Indichem investment is INR 130 crore for the full year.
Okay. So basically, that INR 350 crore-INR 370 crore is a cash outflow in FY 2026, correct?
Yes.
Okay.
Next round of CapEx, there can next round of investment for Indichem part may come in this quarter also.
Okay. No, that's and did you mention the battery chemicals incremental CapEx for the new two new products that you have added? What would be-
Yes, we have one. That is what the second phase is.
Okay, okay. And revenue contribution you said will begin in the mid of FY 2027 from these two new products?
Yes. Yes.
Okay. VC and FEC has already begun, I think Naresh mentioned, from 17th January or so.
No, let me clarify on this.
Okay.
On the 19th of January, plant inauguration was done.
Now we are in the process for validation, trial batches, and then commercialization will happen probably by end of this quarter.
Understood. So basically, when FY 2027 is, we can assume the contribution from VC and FEC.
Yes.
Got it.
As you, yes, you rightly said, as you know that we have already orders in place, so-
Yeah
By quarter end, we should be able to hopefully start commercial supply.
Perfect. And last bit, so which cost overheads, let's say, they contribute to reduction in other expenses this quarter? Because other expenses declined quite a lot and this quarter. So just wanted to understand the reason there.
I mean, it's only a INR 3 crore reduction. Yeah.
So, Krishan, it was, largely on account of, savings on energy cost. Then there are a few consumable and repairs item, and we have improved, many of our internal processes. And, so those has all, thing has helped us to, reduce on, other overheads, for this quarter.
Understood. And the energy savings is from the solar plant that we had installed, correct?
Largely from that.
Yeah. Okay, okay, okay. Thank you so much for answering my question. Wish you all the best, sir. Thank you.
Thank you. The next question comes from the line of Abhijit Akella with Kotak Securities. Please go ahead.
Yeah. Good evening. Thank you so much for taking my questions. First, on the battery chemicals piece, you know, if you could please just remind me what new capacity addition is from the two new products coming up, by one, one, one each, I guess. And what is the CapEx that's being invested into those?
Actually, we have not announced any capacity number for this CapEx. The CapEx plan is INR 40 crore.
Okay, okay. Got it. And with regard to Baba, you know, given that the business has started to turn around, is there a revenue, you know, sort of guidance that we could, you know, look at for FY 2026 as a whole?
So as of now, we have not given any guidance on this. Obviously, this is the season for budget also. We may give the guidance at relevant time.
All right. Just, one last one from my side. With regard to the product concentration, you know, it does seem like maybe the top CDMO product is, you know, driving a lot of the growth, for the company over the last year or so. We have a lot of other growth projects coming up in the next year to 2 years. So if we look out maybe 3 to 5 years, you know, what sort of product concentration would you, expect to see from the top product just over that time frame? I mean, how, how significantly can we de-risk ourselves from, you know, that concentration risk?
So as we already discussed, we are working, and, as we mentioned, four products are already validated, and there are many more products in pipeline for, CDMO business, apart from the traditional, business. And then another growth engine of electrolyte and, semiconductor is coming up. So obviously, idea is to de-risk, product concentration going forward. But I will not able to give you any guidance on this, the, on the product mix, for, in next, three-year times.
Got it. No, thank you. Thank you so much.
But on the generic side also, the products like Apixaban, Rivaroxaban, are already progressing well. So those are also kind of engine for apart from this, the CDMO space.
Okay, thank you so much. All the best.
Thank you. The next question comes from the line of Pratik with Union Mutual Fund. Please go ahead.
Yeah. Many congratulations, Abhishek [Foreign language], Naresh [Foreign language], for great set of numbers. Couple of questions from my side. On your ongoing CDMO, how's the outlook looking in terms of new indication, new geography additions? What sort of outlook are you envisaging based on your interaction with the customers for your ongoing CDMO?
See, for this business, as you know, this is a CDMO business. We are completely driven by whatever projection has been given by our end customer. So obviously, as you read in the market and related to product and market expansion, but we are giving the INR 1,000 crore guidance based on whatever the customer expectation is there for FY till FY 2028.
Got it. And in terms of this recent EU FTA, will we benefit in any ways?
So, let's say, for EU FTA deal, obviously, it will be a welcome deal for the—not only for us, it's for whole industry. So, we may also be the beneficiary of whole as a industry cycle.
Are any of our products under tariffs?
So it's a, we are supplying on a more product on CIF basis, CIF basis, and it's a customer's requirement to get it custom clear at their end. But for us, it has not been any time matter of concern earlier also.
Got it. Yeah. Thanks a lot, and wish you all the best.
Thanks.
Thank you. The next question comes from the line of Rohit Nagraj with 360 ONE Capital. Please go ahead.
Thanks for the opportunity, and, congrats on very strong set of numbers. The first question on CDMO front. So during the first nine months, how many total commercial products that we are servicing on the CDMO? And what could be the mix between pharma and agro? And an allied question to that, when we see FY 2028, INR 1,000 crore, what is the kind of mix that we are looking at from pharma and agro? Thank you.
No, no. When we talk about INR 1,000 crore revenue, it is for the CDMO business only. So it's not, fa-
Sorry.
When we talk about ... It's not about split between pharma and agro.
I'll reframe my question. So-
No, no, there is no agro business in CDMO. All the CDMO is only from pharma. Rest, Abhishek will give the answer.
Okay. So, so all, all CDMO business is to, pharma only, no, agro business is there. And in terms of, product mix or, that we are not, guiding, or that we are not disclose, anywhere because of the confidentiality, confidentiality nature of the CDMO contracts.
Sure, sure. I'll just reframe the question. How many molecules are currently being commercialized? And when we'll reach, say, INR 1,000 crore, what is the number of molecules that will be commercialized and those will be serviced?
As on date, we have already 5 commercialized product, as we mentioned. Going forward, obviously, the number will be higher. It is difficult to say the number of products which will be contributing till at the end of FY 2028.
Sure. That's, that's clear. Second, on the Indichem venture, when do we expect the commercialization of the facility? And probably the first year of operation, and any visibility in terms of how the revenues are likely to be scaled up, and what kind of arrangement in terms of product offtake that we are currently looking at. Thank you.
For the Indichem project, as I mentioned, our planned CapEx should be completed by calendar year 2026, and next year, on a new calendar year note, we should see revenue coming up in this business. In terms of the number or the size or scale of this business, largely, you can expect that for the semiconductor business, the asset turn will be in the range of 1 to 1, and with a bit higher EBITDA margin as compared to pharma business.
Sure. Just one clarification: for the first nine months, what could be the CDMO contribution in our total revenues?
No, that we are not... I'm afraid I will not be able to...
Sure.
-give you this specific number.
No worries, no worries. Thanks a lot for answering all the questions, and all the best, sir.
Thanks.
Thank you. The next question comes from the line of Jason Soans with IDBI Capital. Please go ahead.
Yeah, sir. Thank you so much for taking my question, and really congratulations on a very strong set of numbers. So first question, just wanted to understand, I mean, of course, I understand that the CDMO piece is doing really well, but around two quarters back, you did give some color on how the CDMO piece is doing and the non-CDMO piece is doing. So CDMO, yes, doing very well. Just wanted some color on the non-CDMO business as well. How is it shaping up?
Non-CDMO, as I mentioned during my commentary also-
-the non-CDMO, the pharma intermediate business is also growing in a higher, single digit number. You may feel like it's a lower number, but as I mentioned-
Now we are more focusing towards the quality growth, as compared to the commodity intermediate products. And in terms of growth for this business, as I mentioned, some of the generic products, a couple of generic products are already doing well in this.
In this financial year and last quarter also, and some of the new products are expected to join in this business on coming quarter also. So these are the products which are driving growth for us in non-CDMO business also. But because the pharma CDMO business is growing exponentially, it has become-
the most highlighting point for all of us.
Yes. Sure, sir. Sure. And so just, I mean, you usually do give the EBITDA margins for the segments. So, sir, just for the API business and for the specialty chemicals, what are the segmental EBITDA margins, sir, for this quarter?
For the quarter, EBITDA margin for pharma business is around 41%, and specialty-
is around 12%.
Okay. And, sir, related to that, just wanted to understand, I know additives hasn't started yet, but, you know, it will start, it will soon start. So just wanted to understand, initially, what kind of margin are you baking in for this additives business? And so first start and then at optimum utilization, is a 20% margin safe to, you know, basically incorporate at an optimum utilization scale?
See, we have not guided any,
... any margins expectation for this business as of now?
But what I can share is the margin profile will be below the traditional pharma intermediate business and above the existing parabens, the commodity chemical business. Obviously, at the beginning, the margin-
... will be lower because of the synergies or the scale of the business, but it will get-
... better. But as you know, we have a good contract in hand, so the scale-up should be much faster to get the operating efficiencies.
Sure. Sure. Sure, sir. So just to clarify, just to, you know, the CapEx for the electrolyte additives was INR 177 crores when you mentioned it. Now you're adding INR 40 crores more to it. Is the understanding right?
Yes.
That's right. Okay, that's good. So INR 177 crore and INR 40 crore you'll be adding more. And again, again, another clarification which I had, is you said that the CapEx is INR 220 crore for 2026. So INR 220 crore plus your INR 130 crore going to Indichem, that kind of totally becomes 350. Is that, that also understanding should be right? Correct.
No. So for full year, INR 220 crore in full.
... will not get completed by March 2026, but when it gets completed, total for electrolyte, total CapEx will be INR 220 crore. And for at the full company level,
... the total CapEx, total CapEx will be, INR 220 crore, including, including all the segments.
Okay. So even including the Indichem investment, it will be INR 220.
I am talking about CapEx.
Okay.
So it will be by end of the year, CapEx
-towards electrolyte will be in the range of INR 170 crore for this-
Financial year. 20, maybe towards the pilot plant, and the remaining will be maintenance, some portion of the solar CapEx, totaling to INR 220 crores.
Okay, okay. And 130 is over and above this. The Indichem is separate, separate from this. That's what you're saying.
Indichem investment is up over and above this.
Over and above this.
Your understanding is right, 220-
Yes.
Plus one that,
Yes, yes.
Overall, will be around INR 350 crore.
Yes, yes, yes. Sure, sure. Sir, just lastly, wanted to understand, sir, you know, I understand the BFC and Indichem are basically focused on the semiconductor space. Just, sir, if you could give us some understanding on, some color on how complex, how high margin will these products be? Probably, you are saying 2028, by 2028 you'll see meaningful revenue from these set of businesses as well. So if you could give us some color on how complex, how high margin these products can be, or what potential these products can contribute.
What I can share to you-
... is you already know about the margin profile of BFC, because it's already our existing business. You-
... you can refer our financial also.
On top of that, I can add that at Indichem in South Korea, we are going for further value addition in this space. So these are, these are what I can share to you on this.
Sure, sir. Okay, okay. Thanks, thank you so much for answering my question. Thank you.
Thank you. The next question comes from the line of Sajal Kapoor with Antifragile Thinking. Please go ahead.
Yeah, hi. Thanks for the opportunity and fantastic work, Acutaas team, moving, not just looking at this quarter, I mean, moving gross margins from 40%-45% to upwards of 55% now, in just about two years is a clear testament to your focus on efficiency and smart execution. So well done on that. Coming to my questions, three years from now, what would convince us that Acutaas successfully transitioned from a diversified specialty chemicals company to a sort of scientifically differentiated electronics-grade chemicals platform? And what would failure look like three years out?
So as our Chairman, Naresh brother already mentioned during his speech, for him, in next three year, he expect all his three verticals, standing, not only standing on its own feet, they would be contributing meaningfully, and generating a good amount of profit in all those segments. This is what we would like to see in next three years' time.
... Yeah, so in terms of some of the critical capabilities, I mean, be it talent, purity control, you know, customer trust or capital, what out of these will be the hardest to scale, and how are you positioning yourself just to, you know, protect the downside?
Okay. Sajal, when we started this journey, we designed the plant and everything, all the timelines and requirement of the project is designed, and accordingly, we are having successful installation of the plant as well as parallelly recruitment of the people, talent, and also technology implementation. Everything is as per the program and timeline, we are doing that. So we don't see any hurdle in this kind of technical people available or... Second thing is that whatever the processes are there, that is in-house design. So we have a strong knowledge about our processes. And wherever we don't know the strongness or then we do a JV kind of like an Indichem, where we are doing an operation, but the knowledge is coming from our partner.
So this is how we solve our problem or any issues which is coming in that. So I hope this will help you to understand.
Yes, it does. Yeah, thank you. And lastly, beyond absolute R&D headcount, which I think is currently about 130 odd scientists, so beyond the absolute headcount, how has our effective scientific throughput changed over the last sort of 12-18 months? I mean, be it, I mean, you can measure it in terms of projects per scientist, time to qualification, or, you know, successful tech transfers to manufacturing. So I'm just trying to understand the rate of change, and that has happened in the organization above and beyond the R&D headcount, which we keep publishing over the last 12-18 months.
Because a lot of material change has happened on the gross margin, as I said, and, and I've seen many chemical companies struggle with the gross margin, you know, 40%, 35% in that range. Clearly, we have broken out, so something must have happened beyond the absolute numbers, right? I mean, so if you can just give us some sort of a qualitative understanding. Thank you.
As when I started this journey in public, we always say that we are a company with a chemistry-driven company, R&D-driven company. So our core strength is our R&D, and our team, core people are very well knowledgeable about the chemistry, what chemistry we do. We are very expertised in that. We have more than 680 molecules developed in our R&D. So, I, that will help us to understand the chemistry. USP of incremental margin is not only R&D, but every, all the sectors, there are several parameters which is contributing to make the margin improvement, which is not only including the process improvement, but also energy, technology, operational efficiency. These are all, utility. Everything is a combinedly work on that, and that's how we, we had improved our margin.
Also, the product mix lay off some mature products which are almost old age and no margins remain in that. So these are all things which is cumulative effort done by the team, and accordingly, we improved our margin. So the R&D point of view, our run rate of developing around 50-odd molecules annually, and which is we are doing very well. So sooner or later, we go for the expansion of our R&D also. As and when we require, we will announce that as well.
Right. Because I was coming to that, so currently we are at 130, 140. You expect that number to bump up over the next 12 months or so, right?
Yeah.
Yeah. Yeah. Okay. No, understood. Thank you so much for answering all my questions, and wish you guys the very best. Thank you.
Thank you.
The next question comes from the line of Bharat Shah, an individual investor. Please go ahead.
Naresh, I didn't have any question, but I just wanted to congratulate you and the team. From a small firm with patchy businesses to specialty and multiple products, plus much more on the unveils, from a kind of commodity businesses in API and intermediate to specialty and developing CDMO, where semiconductor and battery chemical specialties, I think the firm has come a fantastic way, and all of that in a relatively short period of time. So hearty, hearty congratulations to you and the team. This is a dramatic performance.
Thank you. Thank you, Bharat [Foreign language]. All blessings of you and all investors. Thank you. Please keep us vigilant and more vigilant to work on projects that encourage us to perform more and more better way. Thank you, Bharat [Foreign language], for keeping trusting us.
No, no, thank you. I've also seen that interaction with your team members is never about numbers, but about the business and how well, for example, Abhishek invariably deals with all business-related issues and how things are progressing.
... It is very heartening. Otherwise, many of these discussions end up being very mundane. But, this has been a refreshing exchange of views while talking to your team.
Thank you. Thank you, Bharat [Foreign language].
Thank you, Bharat[Foreign language], for admiring my team. I'm really happy to hear this, kind of, acknowledgement from a very veteran, person like you from industry. Thank you. Thank you very much, sir.
Thank you.
Thank you. The next question comes from the line of Vignesh Iyer with Sequent Investments. Please go ahead.
Hello, sir. Congratulations on excellent set of number. So my first question is on the working capital part of it. I wanted to understand what was our working capital days in quarter three, net working capital. If you could give us a split of the inventory, receivable, and payable, if possible.
It is 111 days. DSO stand at 100 days, inventory at 55 days, and payable is at 44 days.
Okay. I mean, so what is the standard? I mean, I think the inventory days are a bit higher than usual. Any specific reason for that? Or will you see that the days, you know, go down in quarter four...?
So, sir, traditionally, we said that 110 days are the standard for many quarters. And what we try to always see that we should reduce and come it down to 100 days. But 110 days is a very standard period and comfortable for looking at our business. Fifty-five days of inventory, I believe, that is a good benchmark in the industry also. So 55 days is a comfortable standard for working with our kind of business.
In fact, there will obviously, there will be a many scope for improvement for inventory or working capital days. And we are working and we have... In fact, if you see, we have not only gone beyond our growth for the revenue, we have always kept our eyes on the balance sheet item and the cash flow. And if you see, in last three year also, we have always sequentially improved our working capital days. Obviously, there will be a room for the for the improvement of inventory days or debtor days anytime. But we have always been a good cash flow generating company, if you see, in the last three years' performance.
Definitely. Definitely. So, that was my question. Thank you.
The next question comes from the line of Vivek Gautam with GS Investments. Please go ahead.
Sir, congratulations on a consistently good set of numbers. Sir, my question is about the opportunity size for our different segments. Number two is about the Chinese competition threat in any of the segments, sir.
For Chinese competition, see, we are into the business of chemical and intermediate, so we cannot ignore this Chinese competition. We have been dealing with all those competition for almost more than a decade. What I can say is that, we are very good at chemistry, that is our strength. We do multiple chemistry for any of the product at a large scale, which is a key or USP for us, as against any Chinese competition. That's the reason you can see, you can see that, for majority of our top products, we are the leader, covering more than 70%-80% of the market share. It's nothing or something which we are dealing day in, day out.
In terms of market opportunity, let's say for our, some of the products like, anti-cancer, which is already, going well, you can refer the some of the presentation of our customer and end customers, which can give you the insight about these things. And in terms of, this product like, electrolyte additive space, wherein VC and FEC, we have a very humble capacity of 2000 metric ton in terms of as against whatever the, as against the total VC and FEC market, in the. So as of now, we are very small as against the opportunity size, available. Both for the VC, FEC kind of, electrolyte additive, product, as well as the semiconductor space, where we have only just started in this, business.
So 2,000 metric ton for VC and 2,000 for FEC, it's a very small size as of now as against the full opportunity size.
Sir, lastly, how much is the exposure we are having for the U.S. market, and any impact of tariff and other things?
We have very small amount of direct export to the U.S. market. Largely, it is from our subsidiary called Baba Fine Chemicals only. So we do not have much of the impact for the U.S. tariff.
Thank you, sir. Keep up the good work, sir.
Thank you. The next question comes from the line of Akshay with AK Investment. Please go ahead.
Hello. Thank you for giving me the opportunity. And first of all, congratulations on very great, strong set of number. Sir, my, all, all my questions has been answered, but my, only question is that after FY 2026, can we grow, sustainably by, 25%-30% YoY till next four to five years?
... for consolidated business.
Sir, we have been growing for more than 25%, not for last 2, 3 years. We have grown more than 25% for more than decades, and that is what we have already guided the market, that for next 3 years also, we would be growing more than 25% at the revenue level.
Yeah, that's right and very promising. All the best for the future. Thank you so much.
Thanks.
Thank you. The next question comes from the line of Jason Soans with IDBI Capital. Please go ahead.
Sir, thanks for taking my question. Again, just a small question I had. I mean, you have a 2000-ton capacity of VC and FEC both, right? Now, I just wanted to know, you also have a contracted-
4,000 in, both 2.
Yeah, 4,000 in total. Correct. Yes.
Yes.
So, sir, with the contract in place, any capacity utilization you are looking at going ahead, I mean, how much would that... With the contract in place, how much of that capacity, you know, of the 4,000 it would take?
So because of confidentiality of the agreement, we will not be able-
-to share the utilization, otherwise people, will, figure out the contract details.
We are not disclosing it.
As I mentioned, we have good visibility in terms of.
... contract for FY 2027 and going forward also.
We are expecting fast scaling up of this business.
Okay, okay. And, sir, just also, you know, with all that happening in China, with the anti-dumping and things, and with lithium prices, electrolyte prices, and additive prices also going up, you know, with lithium carbonate and all, do you think... I mean, whatever you're seeing, that bodes very positively for the additives business going ahead?
So for the additive business, as I mentioned, we already have-
... contract in place, which is-
... more of a fixed, pricing contract with-
... variability is there in terms of key raw material as well as the currency pricing. So we believe in long-term supply or long-term relationship with the customers.
Obviously, we earn our margin based on those already signed contracts.
Okay, okay. So, so this contract is in place probably for future contracts; it would be beneficial. Correct?
So, as I mentioned.
We believe-
not on the short-term
-gaining of this-
market movement. We-
more driven by the long-term supply contract.
Good. Sure, sure. That's all from my side. Thanks, thanks for answering my question.
Thank you. The next question comes from the line of Chandra Rampuria with Arya Finvest. Please go ahead.
Hello. Can you hear me, please?
Yes.
Yes, sir. Please go ahead.
Yeah, yeah. First of all, thank you, Naresh [Foreign language]. Superb results and very well done. And I have been following your growth for some time now, and I'm really impressed. A short while ago, you mentioned in the context of the anticancer CDMO, that the projections are from the customer are in place till 2028. So just wanted to get the clarification, is it the projections are there till 2028, or is the contract till 2028?
We never said that, we have up to 2028, we have some projection or something like that. We always say that we have a long-term supply contract for this anticancer.
Because, short while ago, you mentioned about the revenue guidance till 2028, and that is based on-
Yes
customer projection. So that's why
Yes.
Just this clarification.
No, no. So for 2028, we announce INR 1,000 crore CDMO business. So that CDMO business is not only belongs to anticancer, this is the community of several, other, CDMO as well. And that will be, we will be complete by 2028. We reach to this milestone. This is what I said. But that milestone, INR 1,000 crore, is not belongs to the, CDMO of anticancer, but this is, is a bundle of several CDMO business.
Oh, that, that's fine.
I hope-
That's fine.
I hope this will clarify your doubt.
Sure, sure, sure. That's helpful. Thank you.
Thank you. Ladies and gentlemen, due to time constraint, this was the last question for today. I now hand the conference over to the management for closing comments.
Thank you to the JM Financial team for hosting our conference call. We appreciate everyone's patience and hope we have addressed most of your queries. If we missed any of your questions, please reach out to our investor relations team, and we will get back to you promptly. And so again, thank you very much, and have a good evening.
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.