Q1 25/26

Aug 14, 2025

Summary

Q1 FY26 revenue from operations rose 91% YoY and EBITDA rose 118%, while management projected FY26 revenue growth above 30%. New agreements lifted the order book to INR 14,646 crore; inventory reduction and debt repayment are expected to improve the balance sheet.

Ladies and gentlemen, good day and welcome to the Anupam Rasayan India 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 touchtone phone. Please note that this call is being recorded. With this, I now hand the conference over to Ms. Krishna Patel from EY. Thank you and over to you, ma'am. Thank you, Samia, and good afternoon, everyone. Welcome you all to Anupam Rasayan India Limited's Q1 FY26 earnings conference call. To take us through the results and to answer your questions, we have with us the management of Anupam Rasayan, represented by Mr. Anand Desai, Managing Director, Mr. Gopal Agrawal, Chief Executive Officer, Mr. Amit Khurana, Chief Financial Officer, and Mr. Vishal Thakkar, Deputy Chief Financial Officer. The discussions that we may have today may contain certain forward-looking statements relating to the future events and future performance. Numerous factors could cause actual results to differ materially from those in the forward-looking statements. Please note, the audio of this call is copyright material of Anupam Rasayan India and cannot be copied, rebroadcasted, attributed in press or media without specific written consent of the company. I would like to now hand over the call to Mr. Anand Desai, the Managing Director, for his opening comments. Thank you, and over to you, sir. Thank you, Krishna. Good afternoon, everyone. I would like to welcome you all to the Q1 FY26 earnings conference call of Anupam Rasayan India Limited. During Q1 FY26, consolidated revenue stood at INR 491 crores, registering a robust growth of 89% year-on-year. We strongly believe that the sectoral trends are in our favor and we are witnessing a clear resurgence in growth. Our pharma and polymer businesses are performing well, supported with recovery in agricultural segment. The U.S.A. and Japan markets have shown encouraging trends for Anupam Rasayan, and during the Q1 FY26, total exports accounted for 58% of the total revenue from operations. During the quarter, the company signed a long-term master purchase agreement with a Japan-based multinational conglomerate, a global leader in fluorochemicals and advanced technology solutions. This agreement brings immediate as well as long-term commercial value, marking a significant milestone in our growth journey. Anupam Rasayan is collaborating with this Japanese conglomerate to supply multiple niche molecules used across diverse applications including semiconductors, data centers, and electronics. Several of these molecules are slated for commercialization this year, with production ramping up from next year onwards. This collaboration not only highlights Anupam's strength in fluorination and custom synthesis, but also reflects the trust global customers place in our quality manufacturing and integration capabilities. Additionally, during the quarter, the company signed letter of intent with E-Lyte Innovations, a European developer and supplier of electrolyte solutions for energy storage, a subsidiary of FUCHS, known for its innovative lubricant solutions. Anupam will be one of the first manufacturers to commercially produce this molecule in India, further solidifying our position in the rapidly growing EV and battery ecosystem. With the two new agreements signed with Japan and the U.S.-based multinational companies also, our order book now stands at INR 14,646 crores. On the working capital front, we have been making earnest efforts to optimize our balance sheet. We have already seen meaningful progress through receipts of advances from customers for inventory this quarter. Overall inventory levels have also begun to follow a downward trajectory, and we expect to see a considerable reduction in our working capital in the coming quarter. These initiatives will further strengthen our balance sheet and overall financial position. Building on a strong Q4 performance and a robust start to FY 2026 with this quarter, we believe our growth trajectory is firmly back on track. With improved working capital efficiency, redesigned alloys, and the continued strength in our pharma and polymer businesses, which further reinforces our confidence. We are confident and committed to delivering sustained and profitable growth. With this, I would now like to hand over the call to our CEO, Mr. Gopal Agrawal, to take you through the business and operational updates in greater detail. Over to you, Gopal bhai. Thank you, Anand bhai. Good afternoon, everyone, and thank you for joining us today. As Anand bhai highlighted, Q1 FY 2026 reflects sustained momentum across our businesses. Our pharma and polymer segment continued to gain strong traction, driven by ramped up our recent molecule launches and increasing customer demand. Speaking about segment-wise performance, life sciences related specialty chemical contributed 88% of our revenue as on Q1 FY 2026. Pharma segment revenue contributed 24% in Q1 FY 2026 compared to last year, where pharma contributed 15% of revenue. This translates to growth of 3x over last year on the back of ramping up of new molecules launched in 18-24 months. Performance material contributed 12% of total revenue as on FY 2026, Q1 FY 2026, compared to 10% in Q1 FY 2025. This translates to growth of over 2x over last year on the back of commercialization of product under recently signed contracts. We expect this segment to contribute further in our growth. With this, I would like to hand over the call to our CFO, Mr. Amit Khurana, for a detailed update on financial performance. Over to you, Amit bhai. Thank you, Gopal Bhai, and good afternoon, everyone. Thank you for joining us on our earnings call today. I will share the financial highlights for the quarter. An update on the CapEx. All plant projects have been completed with plants commissioned and fully operational. Two plants have been commercialized with trial runs ongoing in one plant. About working capital, as Anand sir mentioned, a sharp reduction in inventory and consequently in net working capital days is expected in FY 2026, starting from this quarter. This improvement will primarily be driven by execution of a substantial number of orders in Q2, which are being fulfilled using the existing inventory. Another significant development is the receipt of INR 277.5 crores from preferential issue in July 2025, out of which INR 175 crores has already been used to repay term debt. With this, the company is long-term net debt-free. Over to our Deputy CFO, Mr. Vishal Thakkar, to share detailed quarterly and annual financial performance. Over to you, Vishal Bhai. Thank you, Amit Bhai. Good afternoon, everyone, and thank you for being with us today. I would like to share some key financial performance highlights for the quarter before we open the floor for the question and answer session. I hope you have had the opportunity to review our detailed presentation and the results that were submitted to the exchange and posted on our website as well. Kindly note our numbers for the quarter are on consolidated basis, and they include Tanfac as well. The consolidated financial highlights for quarter ended 30th June 2025. Revenue from the operations was at INR 486 crores as compared to INR 254 crores in Q1 FY 2025, up 91% YOY. EBITDA, including other incomes, was at INR 129 crores as compared to INR 59 crores in Q1 FY 2025, up 118% YOY. This translates to 26.3% EBITDA margin for this quarter. Profit after tax was at INR 49 crores as compared to INR 12 crores in Q1 FY 2026, up INR 297 crores, 97% YOY. This translates to a 10% PAT margin in this quarter. If you look at the standalone financials for the quarter ended 30th June 2025, company's revenue from operation was at INR 316 crores as compared to INR 164 crores in Q1 FY 2025, up 93% on a year-on-year basis. EBITDA, including other income, was at INR 99 crores as compared to INR 43 crores in Q1 FY 2025, up 133% YOY, translating to an EBITDA margin of 31% for the quarter. Profit after tax was at INR 29.7 crores as compared to INR 1.4 crores in Q1 FY 2026. This translates to a PAT margin of 9.3% in this quarter. Our top 10 customers contributed 79% of our revenue from operations in Q1 FY 2026. With this, I open the floor for Q&A. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone 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 will wait for a moment while the question queue assembles. The first question comes from the line of Meet Gaya from Emkay Global. Please go ahead. Hi. Congratulations, team, on great set of numbers amid all these geopolitical events. I have couple of questions. Firstly, I wanted to ask that U.S. has announced 25% additional tariffs on India, plus some additional penalties, which have come into effect by last week of August. So wanted your perspective, Anand Bhai, on how is that impacting the Indian chemical industry in the near term, and what is your exposure to the U.S. geography, and how are you strategizing to mitigate those risks? I believe last couple of LOIs in Q4 were with U.S.-based customers. What is your take on the execution of those LOIs or contracts? Meet, this is Vishal. Let me take this question. Meet, thank you for the question, and thanks for the appreciation of the effort of management in performance. If we look at the situation in terms of tariff from the U.S., one, I think today lot is fluid, I would say, and I would wait before make a conclusive statement. But today, if we look at it, we believe that whatever the tariffs that have been mentioned today and right now into place, I personally feel that those numbers will be reviewed and corrected. However, if you look at from any angle in terms of the competitive landscape, in terms of alternate supply chain geographies, I think India stands fairly stable in terms of its situation and in terms of its competitive strength that there would not be any major meaningful impact coming in, is my current assessment. Also, if you look at it from Anupam's specific perspective, last year our revenue from U.S. was around in a lower single digit. We have signed an LOI and a contract. If you look at them, I think we have a very fairly robust order book, order from the customer with the pricing agreed. To that extent, we don't see that. Also, some of the products are already in the exempt list, which we are planning to supply. To that extent, we are far more comfortable, and therefore we do not feel much of a challenge there. Some of the other suppliers will have an anti-dumping duty which may be the case, but for us at least, that is fairly comfortable from our perspective. Okay. Thank you. Second question I have. Can you help me understand more on that long-term master purchase agreement with Japanese conglomerate in terms of business segment, value of the contract on an annual basis, and how many molecules are covered within this agreement? Right now, if you look at we are working on more than 5 to 6 products with them. They're largely in the polymer segment. Values right now, they are under evolution, and right now it may not be the right time to share the value. The only thing we can share is the kind of potential. There is a significantly large potential coming from these molecules as they are in the specialty polymer segment that are there. As we mentioned, this is one of the very large MNC in this segment, which is into fluoro side of the business. Got it, sir. Next, pharma revenues have been growing quarter on quarter from INR 25 crores in Q1 last year to INR 75 crores now in this quarter. Are these revenues part of LOI or they are non-LOI based? Also, the products which we are supplying are going into patented or non-patent products? What are the therapies which those intermediates cater to? Okay. If you look at our pharma strategy, the pharma strategy for us is more looking at import substitution in India and specifically addressing the KSM market, KSM space, which is the space which is right now not catered by the Indian players. India, in terms of pharma, if you look at it, largely Indian players are more active in the formulation, so branded generics, and also in the API space. But on the KSM side, very handful of people would be operating, and that's the market space that we are focusing on. Two, if you look at these are not the LOI. These revenues are not of the LOIs revenue. These are additional revenue that we will see from here. In terms of list, last year we had launched over last 18 months, we had launched now about 17 new molecules, which are now ramping up to give us this revenue. This is across segments like your CNS segment, it is across your statins, it is across your infectious disease. So it is broadly across multiple therapeutic segments. But key thing that you have to appreciate is that these are all raw products, which are really extension of our value chain. So what value chain we have today in terms of our chemistry and supply chain and manufacturing capacities, we are leveraging those. Anyways, for agro, we have agro polymer, and the similar ones are being utilized to an extension to use that similar supply chain to address the pharma market. We come from more chemistry and processes and ending up our finished product into the pharma segment. Got it, sir. One question if I can squeeze in. Sorry. Your performance material segment should be growing considering the revenues which you have signed recently. What should be the contribution mix from this segment going in FY 2027, FY 2028? Today also, if you look at the performance segment, it is around just about 12%, and we expect that that number would be around 15%-20% this year. As we go further, this should grow and end up around 20%-25% at least in next 2-3 years' time, similar to what we will see for the pharma as well. Okay, sir. Thank you so much for the questions. Thank you. Thank you, Mihir. Thank you. Thank you. The next question comes from the line of S Ramesh from Nirmal Bang Equities. Please go ahead. Good evening, and thank you very much, and congratulations on your results. First is a housekeeping question. In the presentation, the export share was mentioned as 48%, but I heard Anand saying the export share is 58%. Can you clarify that? It is a typographical error on the presentation. 58 is the right number. Okay. When you talk about the debt coming down, there is an increase in the interest expense. If you look at the reduction in long-term debt, what would be the run rate for interest expense from the second quarter for FY26? If you look at your working capital reduction, how much is the existing inventory value term that is being used for your new orders from second quarter? So let me answer the interest rate question or the debt question. Yes, my debt will be in the range of INR 1,000 crores by now. As we go, that number would, on a net basis, tend to reduce as my operating cash flows kick in. For now, you can look at around about for the quarter years, it will be in the range of INR 26 crores-INR 27 crores a quarter kind of a number or little less than that also will be the possibility. Yes. Right now it is this and let's see from there. Okay. So when you talk about using the existing inventory for the new orders starting this quarter, can you quantify the value of the inventory so that we get a sense of how much the inventory will come down relative to the ramp-up in revenue? Are we talking about this quarter, or are we talking about the year, or we are talking about the No, you made a mention that you are going to use existing inventory for ramping up a new order, right? So whatever revenue you get will be on the existing inventory, so your inventory days will come down. So if you can quantify the value of the inventory to be used and what is the kind of revenue you expect on a steady-state basis from these orders, that will help us understand how the working capital looks like. So, by the year end, we are looking at, let's say, around about the kind of a working capital cycle that we saw for 2024. Is that? In terms of net working capital. In terms of days. Okay. When you talk about the new order using existing inventory now, you have several orders to start being executed this year from over FY 2025, FY 2026. These orders will be executed in the next few quarters. How is the receivable and inventory cycle compared to the existing business? In terms of number of days, what would be the reduction? Sorry, I did not get you. Can you please tell me again? Sorry. No, in terms of the incremental growth in revenue. There is an existing revenue and a working capital profile, right? In terms of the new orders being executed over FY 2025, FY 2026 as per the LOI schedule you have given. For the execution of the new order, what will be the receivable day, the inventory day, in terms of incremental impact on the balance sheet? Incremental impact, as I am saying, I am talking the net basis. If you look at it, as we go forward now, I will be able to use my part of my inventory to liquidate and convert it into sales, which would mean that my absolute number also should come down. Second, what will it also mean? Receivables also, which were extended, are also going to contracts in terms of days. If you look at it, the cycle of my cash conversion is going to shrink and reduce. That is the first focus that I want to achieve. Second, as I mentioned, over the year, we should be looking at coming back to a working capital cycle of what we saw in 2024. In terms of absolute, yes, there will be a reduction in terms of a few hundred crores of working capital. Working capital in absolute term also is what we are looking at. It is a combination of sales increase and reduction in working capital. As we go, there are two parts, as we had discussed earlier also, that pharma will have a little longer receivable cycle compared to agro and polymer. Versus pharma will have a lesser inventory intensity compared to pharma and polymer. Net, eventually we should end up with a net working capital over next two years kind of a timeframe in the range of 180 days kind of a target that we have been having for us, 180 to 2. Okay. You mentioned the year-over-year numbers for pharma and performance chemicals. Can you give a similar number for last year, what was it for agrochem and personal care? Okay. Year-over-year. See, I am saying that agro for this quarter would be around about 56%-57% of my revenue. I think that will help you in terms of getting the balance numbers. I understand that. Since you gave the corresponding number for pharma and performance chemicals, it will be useful if you give the same number for agrochem and personal care. That is the limited point I am making. I will get you that number. Just give me a minute or two to just do the math and give it to you. Right? Yeah. Secondly, if you look at your customer offtake in agrochemicals, you are saying its performance is improving. Other companies are saying that customers are deferring orders and they are balancing their inventory requirements. In your case, are the innovators able to lift their material as per the delivery schedule? When you say agrochemicals for CSM is improving, how is it different for you compared to your competitors? We heard one peer say that their volumes have actually dropped because the customer has been reducing the offtake versus their contract. What is different in your case? Ramesh, first, there is over 100% year-over-year growth in my agrochem segment itself. If that helps the first question to answer. Second, these are all product-specific, customer-specific, company-specific situations. There were my peers which were showing growth when I was in the degrowth period last year. Making a comment on any of my peers may not be the best statement to make. What I am saying is that today what I see, that this year we are looking at a very strong revenue growth across all the four segments that I can say, which is agro, pharma, polymer, and personal care. We see personal care will remain a steady growth because it has not seen too much of a volatility and will continue to be there. Agro, pharma, and polymer will be a strong growth. We are looking at, as I had said in the last call also, this year is looking at as where we are going to grow over 30%-plus kind of a revenue numbers that we are feeling very comfortable. If you look at my last two quarters results, it gives me that much confidence and it provides a strong empirical evidence to that plan or the suggestion that I am making. Last thought. Sir, sorry to interrupt. Yeah. May I request you to join the queue for a follow-up question, please? Sure, no problem. Krishna, let one question be there, and we can take the one after. Okay. Thank you. Appreciate it. Just trying to put the order book schedule in perspective and the segments you are giving. You said pharma is out of the order book. If you look at the segment categories, how should we read the order book execution in FY 2026 and 2027 based on the LOI schedule you have given? How do we fit it into the segments? Order book, if you really look at it, largely will be for polymer and for the agrochem side. You can see LOIs are largely catering to these two segments. We expect that around INR 450 crore-INR 500 crore kind of a number will be there for this year and we expect it to go. We would double the contribution from LOI from last year to this year, broadly, and we expect a similar kind of a number of growth next year as well because a lot of LOIs and contracts are getting commercialized and getting ramped up. Okay. The polymer will be in the performance chemicals segment, right? Yes. The polymer is performance chemical. Yes. Thank you very much. I will join the queue. I will ensure all of it. Thank you. Thank you. Pleasure. Thank you. Before we move to the next participant, a reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Rikin Shah from Bandhan AMC. Please go ahead. Hi, team. Congrats on a very strong rebound. My first question is, I want to try to understand what the inventory situation is like at the end customer's end, like who we are supplying to, for our key molecules, basically. Thank you. That helps me also explain what I was trying to explain, and thanks for this question. If you see, last 18 months has been a very concentrated effort from my customer to really reduce their supply inventory levels. If we see now, those stocks are now coming to the level, target level that they had put for themselves. To that extent, we see that now whatever the projection they are giving us for their offtake are looking more robust, more visible and more firm in their nature. To that extent, the reduction in the inventory cycle that they wanted in terms of channel inventory, they have largely covered it for now. Got it. But sir, the broad-based commentary when we see the partner meetings of any of the innovators, the comments to all the contract manufacturers, more or less the same, which is to reduce cost and work on cost structures. Do you feel that the pressure is much lesser today compared to one year ago, maybe? No, significantly less. If you ask me last year versus this year, we see far more comfort in terms of the buoyancy in terms of their projection. Also cost pressures have. Basically what has happened, that most of the cost pressure, if you really see, started in the 2023 timeframe, especially when there was a Ukraine-Russia conflict and which led to a strong inflation, very high inflationary pressures across energy and every other facet. Two things have happened from this. The energy prices have got corrected significantly and came back to a more steady state. Also, if you look at from a logistics or transportation or any other places also, the costs have become more stable and more near to the past steady-state numbers. To that extent, cost pressures are not as much. No doubt always, a customer will want to have a cheaper product and quicker. But I think everybody has seen that now we have come to a level where we need to get to business on a steady state basis, and we have to act and behave and expect in that similar range. Got it. Apologies for the next question if it's a repetition, but after the preferential and perhaps the cash flows of FY 2025 materializing in FY 2026 as there is more inventory rationalization. What kind of debt reduction, maybe short-term and long-term goals do we have? If you see first, we are today on a net basis because we have some bit of a capital, small little bit of a term debt. On a net term debt basis, we are net zero, actually. We have practically no net term debt left out, first. Second, today we have working capital lines of around INR 1,000 crores. We expect that to get corrected more in terms of reflection of the operating cash flows because today if you look at it, no major CapEx planned or necessitated. And two, working capital will release cash rather than consume cash. Got it. Even if we see working capital debt and combined gross debt long-term plus working capital related. Overall, do we have any target in our mind? Like maybe a short-term, if that's too myopic, maybe a long-term goal. I'm just saying that today if you look at my debt to EBITDA will be less than 2 and I will try and keep it around less than 2 and more pushing towards 1.5 or less. All right. Got it, Rishabh. Thank you so much. That's- Thank you. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next follow-up question comes from the line of S Ramesh from Nirmal Bang Equities. Please go ahead. In terms of the margin profile and the tax rate, how should we read the incremental growth that you have advised? What will be the margin profile and how will the tax rate move? Margin profile, we should have a similar margin profile that we have been historically guiding. I would put it around about 25%-27% margin profile is what I would really guide at incremental. And tax rate, I think steady state tax rate, what we have been historically is where we should be looking at. No, the tax rate first quarter only 23%, so will it increase over the four quarters and go back to 20%-30% or separation? Yeah. What has been the historical average, I think if you take it that level it should be the right one. The reason I am asking is how has the tax rate declined to 23% in the first quarter? There was basically some credits which were there which we have been able to use it. Okay. One request now. Tanfac is a company which is supplying the material as a group company. If you are able to get some visibility on the performance of the company and the quality of the management that will help us understand that company as well and how they fit into your plans. That is one personal request you can do. Sure. We will look into that. Thanks a lot. Appreciate it and wish you all the best. Thank you. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I will now hand the conference over to the management for closing comments. Thank you. On behalf of the management of Anupam Rasayan India, I thank you all for joining on our earnings call for today. We hope we have been able to address majority of your queries. If you may have any further questions, you may reach out to our investor relation partner, EY, and they would be happy to support you. We close this call. Thank you very much. Have a good day. Thank you, sir. On behalf of Anupam Rasayan India Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.