Ladies and gentlemen, good day and welcome to the Q1 FY 2026 earnings conference call of Aether Industries, hosted by HDFC Securities. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nilesh Ghuge from HDFC Securities. Thank you, and over to you, sir.
Yeah, thank you, Steve. Good afternoon, all. On behalf of HDFC Securities, I welcome everyone to this Aether Industries conference call to discuss the results for the quarter-ending June 2025. From the Aether Industries, we have with us today Dr. Aman Desai, Promoter and Whole-time Director, Mr. Rohan Desai, Promoter and Whole-time Director, Mr. Faiz Nagariya, Chief Financial Officer, Mr. Kushal Joshi, Lead Investor Relations, and Ms. Shubhangi Desai, Executive IR. Without further ado, I will now hand over the floor to Mr. Kushal Joshi to begin with the earnings call for the Q1 FY 2026. Over to you, Kushal.
Yeah, thank you, Nilesh. A warm welcome to everyone. Apologies for the delay. Today, on July 24th, 2025, our board has approved the financial results for the first quarter for the fiscal year FY 2026, and the same has been filed with the exchanges as well as updated over our website. Please note that this conference call is being recorded, and the transcript of the same will be made available on the website of Aether Industries Limited and the stock exchanges. Please also note that the audio of the conference call is the copyright material of Aether Industries Limited and cannot be copied, rebroadcast, or attributed in press or media without specific and written consent of the company. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are predictions, projections, or other estimates about future events.
These estimates reflect management's current expectations on future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause the actual results to differ materially from what is expected or implied. Aether Industries Limited or its officials do not undertake any obligation to publicly update any forward-looking statements, whether as a result of future events or otherwise. Now, Mr. Rohan Desai will begin by sharing Aether's business outlook and will be followed by Dr. Aman Desai, who will share the ongoing expansions and strategy of the company going forward. And then we'll have Mr. Faiz Nagariya, who will cover the financial highlights for the period of the review. Now, I shall hand over the call to Mr. Rohan Desai for his opening remarks. Over to you, Rohan.
Thank you, Kushal. Good evening, everyone. I hope everybody is doing well, and I'm glad to connect with you all to discuss the performance of our company for quarter one of financial year 2026. Last quarter was marked by heightened geopolitical tensions and tariff uncertainties. On the back of this, I'm pleased to inform you that the demand of our products in the large-scale manufacturing vertical grew by 9% year-on-year and 8% quarter-on-quarter basis. Overall, the company has seen an increase in volume on the back of CM business model also. The demand for our products continued to remain buoyant, and we have added six new clients in this quarter. Prices for our products in the LSM business model vertical have remained stable, and this is evident by our margins remaining stable for this quarter.
With respect to Aether's business model, we have seen 51% contribution of sales from large-scale manufacturing business model, 37% coming from contract/exclusive manufacturing business model, and 10% coming from contract research and manufacturing services business model during this quarter. Contract/exclusive manufacturing is set to show a good growth, where the orders towards Baker Hughes are expected to increase, and we will also start the manufacturing for Milliken products Site 3+. Our exports revenue stood at 33% of the total revenues, and domestic sales stood at 66%. Please note, the major shift in the domestic revenues is attributable to the supplies made to Baker Hughes in the entity. On the CapEx front, we are on Site 3+, which we have dedicated to Milliken, is expected to commence production by quarter four of financial year 2026.
Site 5, which is based out of Panoli, continues to progress smoothly, and the target to commission the first two production blocks in phase one continues to be by the end of quarter three of financial year 2026. On Site 5, we plan to launch our own large-scale manufacturing business products in the first production block, which are targeted towards pharmaceutical, agrochemical, and material science sectors. The average pricing for these products ranges between $30-$40 a kilo. These products have been approved and qualified by our customers and are going to be manufactured for the first time in India. We are confident that we will be able to operate the plant at optimum level in 18 months from commercial production from the start of the commercial production.
The CapEx cost per plant at Site 5 is approximately INR 160-180 crores, and we plan to achieve an asset turn of 1.75x at maturity. The second production block will be dedicated to CM manufacturing. In terms of the sectoral split for this quarter, we have seen pharma and agro now contributing only 46% combined, while oil and gas and the material sciences segments are contributing 19% and 17% respectively. This is on the expected line as we expect the share of pharma and agro to continue to remain at 50% levels as the share of oil and gas and material sciences sectors is expected to increase drastically. Our vision in terms of revenue contribution from sectors continues to an equal share of revenues from one, pharmaceutical and agro; second, oil and gas; third, material sciences; and the fourth is sustainability and renewables.
In summary, I would like to say, despite the macro volatility or soft economic environment, in the last few months, we have had heightened client visits at Aether, with the number of projects either being fast-tracked or new client discussions taking place, whereby Aether is becoming a preferred partner or the only partner for R&D and commercialization of the products. We are encouraged by these discussions, which are being taken place. With this, I would like to conclude speaking, and I would request Dr. Aman Desai to touch upon the research and development and new client initiatives for this period. Over to you, Aman. Aman?
Very happy to connect with you all again. Just to continue where Rohan left off, I am first pleased to inform you that during this quarter, Aether Industries executed a contract manufacturing agreement with Milliken Chemical & Textile (India) Co. Pvt. Ltd., which is a wholly owned subsidiary of USA-headquartered Milliken & Company. This is a very important milestone for us and a testimony really to the CRAMS research model that is being practiced at Aether. This product is now going to transfer from the CRAMS business model to the exclusive contract manufacturing business model. Under this agreement, Aether will be the sole contract manufacturing partner for a key strategic product from Milliken. The initial duration of this contract is 10 years, for which we will be fully dedicating our new Site 3+.
We have been working on this product along with the customer over the last several years in the contract research and contract manufacturing services business model, where we were developing the process together, scaling up together, and then now this is being launched into commercial manufacturing at Aether, and we will be the sole contract manufacturing partner. During the quarter, we also participated in the ChemSpec Europe exhibition, where we had more than 20 one-on-one customers with various innovators and customers and industry leaders across sectors, and it's clearly visible that in the West, the companies are unable to manufacture in the current environment, much more so in Europe, and several companies, as you know, have been shutting down their commercial plants there, and India is really a viable option in this for an alternate. Everybody does not want to be in China, and India is really the only option.
I'm currently, right now, on a two-week work tour in the U.S., meeting various customers across various sectors in various cities and participating in an exhibition where we are exhibiting, and there is also over here in the U.S., a clear trend emerging of customers increasing their inquiries and fast-tracking a lot of the projects that we have been discussing over the last several years. Customers are indeed looking to partner with reliable partners in India and are expediting and finalizing the contracts much faster than what we have experienced in the past. We believe that Aether is extremely well placed, considering the relationships that we have already forged with these customers at the highest levels in the technical echelons of these companies and also on the basis of the world-class infrastructure that we have built at Aether and are continuing to build.
This year, we will also be expanding further our R&D facilities. The plan is to incur a CapEx of INR 30-INR 40 crores to increase the number of labs from the current 8 labs to an additional 15 labs and the current 65 fume hoods to an additional 130 fume hoods, including four engineering labs. This clearly demonstrates that the number of inquiries we are getting from our customers are increasing rapidly, and we are also trying to target new customers and also target additional products that fit into our core competency model with existing customers and new customers. This helps in increasing our wallet share with each of our customers. Currently, in R&D, we have more than 50 projects, of which the majority of them are non-agro and non-pharma. With the ongoing CapEx at Site 5, we are extremely excited about this site.
It is proceeding as per schedule and as per timeline, and we have a clear line of sight for the first four plants, in which the first two are expected to be completed by the end of this calendar year, as mentioned by Rohan earlier. We have a large number of projects in the pipeline in R&D at the pilot plant, and we are quite confident of being able to fill up the entire site with innovative and first-time made-in-India products in our LSM business model, as well as significantly increasing the number of products which are getting finalized now for this Site 5 in the exclusive manufacturing business model.
In summary, I have always mentioned that this is going to be a golden age for the Indian chemical companies, and a number of opportunities are available now to the Indian specialty companies who have invested in R&D capabilities and infrastructure, and I do believe that this is coming of age now, and this is proving to be true in the current global scenario. We believe Aether is well poised to take maximum advantage of this opportunity that exists today in the global specialty chemical industry and hopefully will be at the forefront, taking advantage of these opportunities and translating these opportunities into actual projects being executed and actual revenue being generated for the company. Thank you all again for being online with us for the call, and we are very happy to take questions.
And now, before that, I will request Faiz, our CFO, to give you an overview of the financial results for the first quarter of FY 2026. Faiz?
Yeah. Thank you, Dr. Aman, and good evening, everybody. I am glad to present the financial results of Aether Industries Limited for Q1 of FY 2026. The total consolidated revenue of the company stood at INR 2,595 million in Q1 of FY 2026, as against INR 1,920 million in Q1 of FY 2025, which is a 35% increase year-on-year. This resulted in EBITDA of INR 772 million in Q1 of financial year 2026, as against INR 402 million in Q1 of financial year 2025, which is an increase of 92% in the comparable periods. EBITDA margin stood at 30% in Q1 of FY 2026, as against 22% in Q1 of FY 2025. The PAT amounted to INR 470 million in Q1 of financial year 2026, as against INR 299 million in Q1 of financial year 2025, which is an increase by 57% year-on-year.
The PAT margin stood at 18% in Q1 of FY 2026, as against 16% in Q1 of financial year 2025. We have always been trying to reduce the working capital cycle, and we are happy to inform that we have been able to reduce the working capital cycle more to 190 days, which was 195 as of 31st March 2025, wherein inventory days, which was 175 days, have come down to 165 days. We are planning to do CapEx of INR 350 crores in financial year 2026, which will be broken down into Site 3+, Site 3++, and Panoli. That is the Site 5. The remaining claim for the fixed assets for the loss has been put up to the insurance surveyor along with the loss of profit claim, and we are confident to get the same settled by the insurance company by or before Q2 of financial year 2026.
In fact, the FLOP claim is submitted by the surveyor to the insurance company, and we are hopeful to get the same within July 2025 or August 2025. Thank you once again, and we look forward to a good growth story here onwards. Back to you, Kushal.
Thank you, Faiz. We request the moderator to open the call for questions and answers.
Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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 is from the line of Abhijit Akella from KIE. Please go ahead.
Yeah. Good evening. Thank you so much for taking my questions. Just a few to understand the numbers a little bit better. The CM revenues seem to be up somewhat modestly this quarter on a sequential basis, so just sort of wondering how much of that is attributable to Baker Hughes, and if there was a significant ramp-up in Baker, then were there any other contracts that kind of maybe softened a little bit sequentially? That was one, and then on the other hand, the LSM business seems to have shown fairly good growth sequentially, so if you could please just help us understand what specific projects might have driven that growth. Thank you.
Yes, I'll take the question if required. Rohan can pitch in. Actually, the growth factor for contract manufacturing is Baker Hughes, which started from the last quarter slowly, and then we have capitalized in that, and we have got a revenue of around INR 410 million from them, and that is the driving force. Of course, we are also taking up various other contract manufacturing, wherein the Aramco material has also been sold to a couple of customers, and we are ramping up on that. I hope I have answered your first question, Abhijit.
Yeah. So just the INR 41 crores that we booked this quarter, what would the number have been in the fourth quarter for FY 2026?
It is only INR 25 crores, I think so.
Okay, so sequentially, it's an increase of about INR 16 crores, and yet the LSM revenues are up by only some INR 4 crores.
Yes.
So just trying to understand what happened. I mean, any softening in the remainder of the business?
No, sir. See, the LSM is also going up thereby as Rohan said in his commentary. Also, there is a volume growth which we are witnessing since last few quarters, and this time also in LSM, there is a volume growth itself. The prices are still subdued because of the Chinese dumping, and all the three models are seeing growth, and we see a growth trajectory in the future as well.
Fair enough. Thank you. I'll take it offline for anything more.
Sure, sure.
And just one other thing on the outlook for this year. If you could please just help us with your outlook for the major growth projects, Baker Hughes, Milliken, Site 5. How much could we expect in terms of contribution in this year, fiscal 2026, and then in fiscal 2027?
Yeah. Abhijit, we would not like to give a forward-looking statement for the revenue potentials, but of course, with the names which were spoken, will all be the driving forces for us, and we look forward to a good growth trajectory. I'm sorry for the same.
Sure, sure. No problem. And just one last thing from my side. On the insurance front, how much is the amount that you're expecting to collect?
Approximately, we expect that we will still receive approximately INR 50-INR 60 crores more.
Okay. Understood. Thank you so much. I'll come back in the queue for any more.
Sure. No worries.
Thank you. The next question is from the line of Amay Sharda from Purnartha Investment Advisers. Please go ahead.
Hi. Am I audible?
Yes, sir, you are. Please go ahead.
Okay. Thank you for the opportunity, sir. Since I just had some basic questions. I'm relatively new to the company. So just wanted to understand when you first set up a plant, what is the minimum utilization level at which a plant becomes profitable for you?
At maturity, these.
Yeah, for sure.
Yeah. So at maturity, these plants are expected to have a capacity utilization between 70%-75%.
Okay. But then below 70%, they are not profitable, or are they still profitable?
Can you just repeat your question because there is some disconnect in your questions?
So my question was that when you first set up a new plant, let's say you're setting Site 3++, so what is the minimum utilization level that the plant needs to get to, 30%, 40%, 50%, at which it becomes profitable for you to maintain these 20%, 30% of margins that you're having?
So when we select the products, we initially select the products which are giving us an EBITDA margin of at least 25% plus. So then only we take up, and it's not that the margins start coming after the capacity or the capacity is reached to some extent. We start getting the profits from the day we start the sales. And the only thing is we give a trajectory of the ramping up. So the full capacity utilization, which is approximately around 75%-80% or maximum 85% of a plant, it takes approximately two years.
Okay. So let me try to answer this question differently. On the CM side, what really happens is that the pricings are built up in a way that if the first year you are utilizing only 40% of your capacity and you are developing that product and streamlining that product, the product will be at X price, and then once the product is stabilized, the price will come to a commercialized price of Y price. So usually, the capacity utilization is not a concern over here when you are talking about CM projects. And if you're talking about the LSM projects, if you reach 40%-45% of your capacity levels, you start generating profits out of it.
Okay. Got that. And, sir, one more question I had was that Site 3+ and Site 3++, these are two different sites, or is it one and the same site?
So we Site 3, and then we Site 3++. That is adjoining land. So we just named it Site 3++ just for the stakeholders to understand, I mean, very clearly what we are doing. But both the sites will be joined together and will be amalgamated, I mean, merged together to Site 3 in future, which will make a notification of at the proper time. So it's just an adjoining part of land, Site 3++.
Okay. Got that. So one more question was regarding the electrolyte additive segment that began some time ago. So this question was how is it ramping up so far, and what kind of scale-up can we expect further, and what were the revenues in FY 2025? If you can help with that.
On the revenue-wise, we are not seeing any major revenues coming out of electrolyte additives for this current year. We will be seeing close to INR 10-15 crores of revenues at max coming out from electrolyte additives. But we are currently involved in a few CRAMS activities with regards to additives, which we'll announce at the proper point in time.
So I want to ask you, with the rates at which the current electrolytes are trading at, it does not make any economic sense of any commercial production at current levels. So we are not manufacturing any electrolytes as we speak to you.
Okay. Okay. Sure. And sir, regarding the Otsuka Chemical contract, so has the ramp-up been good in FY 2025 for that, or will it expect it from FY 2026?
Yes. It is going as per the plan, so there are no problems in that. It's going as per the timelines mentioned in the contract and as per the projections which we had decided at the time of signing of the contract.
So we expect it to ramp up fully in FY 2026? We can expect the INR 510 million revenues for FY 2026?
26, no, 27. 26 would be 30, yeah, would be approximately INR 35-40 crores.
Sure. And one last question was regarding the Polaroid contract. So when do we expect supplies to begin for the Polaroid MSA that you signed for CRAMS business?
We are already doing Polaroid since quite a few years. I mean, so it's ongoing. The contract is working out very well, and we are delivering the products to them.
But you signed a new MSA in FY 2023, right?
So after that on Polaroid?
No.
Yeah. In CRAMS, there was something for Polaroid, right?
No.
Okay. Okay. Sure. That's it from my side. Thank you so much.
Thank you.
Thank you. The next question is from the line of Krishan Parwani from JM Financial. Please go ahead.
Yes. Hi, sir. Thank you for taking my question from my side. First, wanted to understand what led to the degrowth in the agro and pharma business?
There is no degrowth in the agro and pharma business. There is a growth in oil and gas segments and the other segments. Hence, you're seeing the degrowth.
Yeah. So I mean, because last quarter and the previous year's similar quarter, our agro revenue was in the range of INR 40-INR 46 crores. This quarter, I think we are what, INR 28 crores? If I'm not mistaken. And then pharma also is INR 90 crores. Yeah.
Yeah. So quarter one, we renewed the contract basically. So it has been deferred by two months, but it's well in control. So I think it's just phasing from one quarter to another.
There is no.
So we don't see any problems with.
Pricing pressure.
No. We do not see any pricing pressure on pharma and agro as of today. All the prices are stable, bottomed out, and the demand is there. On the volume side, we are seeing an increase in the demand, in fact. So I think everything is well in control in pharma and agro side.
I will add to it that, Krishan, last quarter, we did approximately INR 920 million in pharma, which is INR 900 million. So there is no degrowth. It's almost flat. And in agro, we had approximately INR 400, which is around INR 300. As Rohan said, that there are the first quarters, and the things ramp up in the few quarters. So there is no degrowth as such. The volumes are going up.
Maybe just contract timing. Got it. In the large scale, good to see the revenue going up. So what has led to this growth in the large scale? Because I think pharma is flat. So which other segment has contributed in the large scale manufacturing growth?
So we have material science, which I think has grown. Faiz, correct me if I'm wrong with the number.
Yeah. Yeah. Correct. No. And also, apart from the large in the large scale, Material Sciences, there is also a bit of increase in other sectors wherein we are supplying some small quantities to the new entrants also. Those are the pharma is in line with the last quarter itself. No much changes. Material Sciences has grown side. Otherwise, there is an approximately flatish for the LSM, which is where it is.
Understood. This is good given we have significantly seen a ramp-up in the sales. So on the balance sheet side, I just wanted to understand how much of the gross block is expected to be capitalized in the current fiscal and CapEx outflow for this year?
The CapEx outflow for this year, as I've spoken in my committee, is approximately around INR 300-INR 350 CR, and we will be capitalizing approximately Site 3++, which is approximately INR 200-INR 250 CR.
Okay. And in this fiscal, are you looking to pay off your debt? Just wanted to understand the interest outflow from that.
Can you just repeat your question?
I was asking, do you intend to pay off your debt? I think you had INR 180 crores of debt. I know you are on net cash side. Just wanted to understand the interest expense part because I think you are paying quarterly INR 5 crores or so. So.
Krishan, all this is working capital, and working capital debt will continue because we do not have any long-term debts. These are all short-term debts for the working which we are using, and we would continue this, and I think so it will continue for our next couple of years unless we have good internal approach to pay this off because we are not doing any kind of other fundraise going forward currently.
No, no. Fantastic. This is great, sir. I wish you all the best. Things are looking good for the company. Yeah. Thank you.
Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead.
Thanks for taking my question. So when we look through the remaining part of the year, from a growth perspective, do you see growth largely coming in from the existing kind of contract scaling up, or do you expect any newer sort of specific contracts which will get commercialized as we go along, which can be a meaningful driver for the growth in the remaining quarter of the year?
Yeah. So we are looking at Baker Hughes in a big way. So that's Site 4. Then we are looking Site 3++, which is a Milliken contract, which will be commercialized in this financial year, and then it will be ramped up in the next financial year. And then we are also looking to start Site 5 to production blocks in this financial year, which will be ramped up in the next 18 months period. So we are looking at this. This is all new molecules which we will be launching, and also some of the businesses will, I mean, the top line of the existing molecules will also increase over here, but the major drivers will be these new sites and then these new projects.
Thanks. And on the contract manufacturing, the CM contracts, like the Milliken one that you announced recently, given the current environment, how much time does it take for you? Typically, how long are the negotiation cycles with clients like? And how many contracts do you think, I mean, how many such conversations would you be in advanced stages where maybe something can close over the next few quarters?
Currently, we have a lot of balls in the air. So approximately 12-18 projects which we are discussing, which are almost in the works of finalization or the talks are ongoing. So the negotiations currently are very fast tracked because of the reasons which what Aman spoke about earlier in his commentary. I think the timeline now is less than four to six months for finalization of the contracts, which was earlier one, one and a half year, which usually take from the completion of the transfer activities and moving it into CM business model. So it has been shortened, and it is very fast now. It's moving in a very, very rapid pace.
That's great to hear. But the point associated, given the where our capacities today are, assuming you sign any such new contracts, you would have to necessarily create capacity in Site 5 to cater to these requirements, or do we have capacities in the existing units to take care of some of these things which can potentially get signed up?
So if the quantum is less than, let's say, assuming 100, 200 tons, we can accommodate it Site 3 or Site 2. For Baker Hughes, we have Site 4, which is dedicated, so we can expand that and modify them and add in that site. And if there are CM contracts which are bulk in nature, which are big in nature, about 200 to 500 tons or above 500 tons, then we have to go into Site 5. But we already have a good insight of which projects are going to be qualified in Site 5, so we will not be delayed in terms of setting up the plans. If you see the presentation and if you see the image of the site, you will see the other two production blocks are already up. It's already constructed.
You just need to install the equipment and the pipings, and it takes usually six months to nine months to get the whole production block online now, which was earlier 18 months for the greenfield sites.
That's helpful. And secondly, on the two commercial blocks that you have, two blocks that you will be starting in unit five this year on the two LSM, which are dedicated to LSM projects, by when do you see commercial revenues coming in from these LSM molecules for these two blocks?
I think quarter four of this financial year, we will be, how do you say, streamlining the site and this production block. But from quarter one of the next financial year, I think we will be seeing a good inflow of revenues coming out of this LSM model and the CM model also.
These two LSM blocks, the product that you're looking to make in these blocks, like earlier in the past, used to indicate some sort of addressable market for the products. I mean, the product you identified for these two blocks, what would be the potential market size for these products be?
In terms of the value, I think we are looking at INR 1,500 crores of market size of all three products combined in LSM model, and on the CM side, I would not like to comment on it at the moment.
LSM is for one block or two blocks for LSM in unit five?
One block. One product.
Okay. You said, okay, one for LSM, one for CM?
Yes.
Okay. Thank you so much.
Yes. Thank you.
Thank you. The next question is from the line of Uttam Purohit from Monarch Networth Capital. Please go ahead.
Yes. Thank you for the opportunity. So as working capital days are different for each segment, if you could help me with what standard inventory days and debtor days we aim to maintain in each segment and what's the figure right now?
So as I told in my commentary, the current working capital cycle is approximately around 190 days. And for the three models, LSM is always on a higher side, CM is on the lower side, and CRAMS is the lowest one. And we just try to maintain, try to make an equilibrium and try to reduce the working cycle as much as possible. And our target is to reach around 165 days or 70 days by the end of this financial year. And the target in the next two to three years is around 150 days of working capital.
Okay. Thank you. Currently, out of the exports, U.S. is around 5%-6%. Could you help me with what the other geographies are and how much they contribute?
Other geographies are Europe, wherein we have Germany, so we are selling to Netherlands. We have China also. We have Japan. We are selling to the Middle East also. We have sales to Korea. Various countries are there. Europe is approximately 6%-7%. Sorry, 10%-11%. China is approximately 4%-5%. Japan is also approximately 3%-4%. We are exporting to approximately 19 countries. Mexico is one of them.
Okay. Thank you. And last question on the CM side CapEx. So generally, when we establish a plant, so are those plants specifically designed for that product, or there are plants that are generally in standard, and they require some bit of complexity to cater to that product?
I'll try and answer this question. The plants are designed in a multipurpose manner, and they are fitted with the specific requirements of these particular products. But what we usually say is that our plants are true multipurpose plants, which can be shifted from one chemistry to another if required be with some re-jigging in the equipment and the pipings.
Okay. So we would require only INR 10-20 crore kind of CapEx for a INR 100 crore kind of plant to just change the product type, right?
Not INR 15-20 crore. That's a very high number. I mean, that's 20% of the CapEx which we are talking about. We are talking about less than INR 50 lakh to move from one chemistry to another chemistry.
For the CM also, again, on the CM CapEx side, so generally, we establish the CM line after we get the confidence out of a CRAMS product which can be converted into a CM, or we establish, or we generally start keep up capacity already for any product which can be there.
Yeah. So if you just go through investor presentations, earlier presentations, we are talking about eight chemistries and eight technologies which are our core competencies. We operate out of these eight chemistries and eight technologies. And so moving from this, we are not moving from eighth chemistry to the ninth chemistry, right? So we know what we are going to do, and that's how we fit the plants, and that is how we are able to move from one chemistry to another chemistry with the least amount of modifications and CapEx required. Does that answer your question?
Yeah. Yeah. Thank you.
Okay.
Thank you. The next question is from the line of Rohan Shukla from Anand Rathi. Please go ahead.
Thank you for the opportunity. Am I audible?
Yes.
Yes, sir, you're audible. Please go ahead.
Yeah. So I just had one question. So when we say that the CapEx target for Aether when it exceeds INR 350 crore, how much do we expect it to be infused in Site 5 and what could be the asset turnover?
INR 350 crore from INR 250 crore, yes. Yeah.
Yeah. Fair. Go ahead.
Yeah. On the INR 350 crore, we will be approximately putting up approximately INR 100-INR 150 crore in Site 5. And the asset turn on maturity will be approximately 1.5x-1.75x.
Okay. That answers my question. Thank you, sir.
Thank you.
The next question is from the line of Rohit Nagraj from Batlivala & Karani. Please go ahead.
Thanks for the opportunity and congrats on the performance and models. First question is to Dr. Aman. So since you've been speaking to some of the US customers, normally, what is the timeline from which we get some confirmations from the customer to our R&D and pilot and to commercialization? I mean, historically, the timelines could be different, but in current circumstances, what is the expected timeline that we are looking at? Thank you.
Yeah. Just a second. I'll just repeat this question to Dr. Aman because he's on another line. So he's asking that what is the timeline which you take to finalize the customer and what is the timeline in which you finalize the commercialization with them?
Yeah. It depends on the product to product and the project to project. But typically, we are finding that what was earlier a timeline of between, say, one year to two years to go towards commercialization with various customers or even one year to three years, depending upon the advancement of the commercialization on their end, it is now being fast tracked to within one year. And so a lot of the people that actually I am talking to in these two weeks over here in the U.S. and the various customers we are discussing with, they're all portraying a sense of urgency to translate their products into commercialization, either because of the problems they are having over here or because they want to expedite the launch of their products.
It really depends upon the process, the complexity, the number of steps, and the advancement of their own internal pipeline. Anywhere between six months to two years is what we are seeing currently.
Sure. That's helpful. The second question on the Milliken contracts. So have you shared in terms of what could be the size of the opportunity over a period of 10 years and in terms of the margin profile, will it be similar to the existing business margin profile?
I'll take this question. Thereafter, Aman can speak. We have not given any revenue projections because we cannot comment on that, and the margins will be in similar or better than what we have at the company side.
Perfect. And does this also open up more opportunities with Milliken in terms of other projects where we are currently working on, and there is a greater likelihood that those projects will also get commercialized in the next possible future?
I will take this question. Yes. We are working on multiple projects with various customers, including of Milliken. And yes, the answer to your question is yes.
Yeah. That's helpful. Thanks a lot and all the best.
Thank you.
Thank you. The next question is from the line of Atishay Malan from Fortress Group. Please go ahead.
Yeah. Hi. I have a few questions pertaining to the Milliken contract. Firstly, can you maybe provide some insight into the application this product is used in?
This is used in the material science polymer industry specifically. That's the best I can tell you about this product. We cannot tell you more than this at this moment. In the due time, we'll let you know the applications and the product name if the client gives us permission.
Yeah. No, I appreciate that. That's helpful. And just, is this a fairly new product for Milliken, or is this a fairly established one?
This is a new product for Milliken. We will be the only manufacturer and the first manufacturer of this product and to commercialize this product in the world.
Okay. Just last one from my side. Any specific geographies this will be used in, or is this fairly widespread?
Again, I cannot comment on it. It's under confidentiality, and I cannot give you more information at this point of time.
Okay. No worries. Thank you. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to the management for their closing comments.
Yes.
I would like to thank everyone for attending the conference call. Apologies again once for the delay from our side. And we look forward to seeing you on the call on. Thank you, everyone.
Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.