Ladies and gentlemen, good day and welcome to the Galaxy Surfactants Limited Q2 H1 FY 2026 earnings conference call. As a reminder, all the participants' 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. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. K. Natarajan. Please go ahead.
Hi. Good morning. This is K. Natarajan here. Good morning, ladies and gentlemen. Thank you all for joining our second quarter earnings call of financial year 2025, 2026. If Q1 was about resilience laced with optimism, Q2 has been about navigating short-term turbulence while keeping sight of long-term opportunities. In our conference call for the first quarter FY 2025, we had highlighted three key attributes which have influenced our business in FY 2026. Number one, the risk of U.S. tariffs and uncertainty surrounding it, which we then felt could be inflationary and have an adverse impact on demand. The fatty alcohol prices, which remained elevated. The India growth story with respect to which we were cautiously optimistic. Before we get into the numbers and details for this quarter, it is very important to understand the context and appreciate what has played out in Q2 of this year.
Starting with imposition of tariffs by the U.S. government on exports from India, this had an adverse impact on our business. One needs to understand that additional 50% tariffs not only had adverse impact on our existing businesses where tariff is applicable, but also had a contagion effect on our projects in pipeline. During the last conference call, which we did sometime in middle of August, we are very clearly in a situation of assessing the impact, okay, since the tariffs were announced on August 1st, and we were looking at how do we try to minimize impact in the short term by shipping certain material much before the tariffs kick in. We also said that we're preparing, okay, to see which of the products we can service the demand from our Egypt plant.
We have made good progress, okay, but we are still in the process of ensuring that all the customer approvals are available. As regards India, while we welcome the rationalization of Goods and Services Tax rates and believe this is structurally a positive move, temporary headwinds on account of inventory adjustments impacted this quarter adversely. The effects of the same continued even during the festive season. Lastly, the elevated fatty alcohol prices have now started hurting the business in a significant way. While the risk of reformulation is always there, the significant spread between fatty alcohol prices and crude petroleum has never been so high for so long over the past three decades. Unfortunately, this risk has played out and this quarter adversely impacted our volumes in India.
We will be dwelling on each of these areas region-wise subsequently at length, but understanding the business context will be the key in understanding the performance that we have delivered. It is one of the rare quarters where perhaps all the risks that we had envisaged has played out and continue to do so even into Q3. Moving on now to the numbers. Consolidated volumes for the quarter remained flat year-on-year and quarter-on-quarter. While Performance Surfactants registered a high single-digit decline, Specialty Care , despite tariff-led uncertainty, clocked double-digit volume growth driven by non-U.S. geographies. H1 FY 2026 consolidated revenues grew 2% year-on-year, driven by the double-digit growth for Specialty Care products and flat performance by Performance Surfactants.
Our EBITDA declined by 5% year-on-year at INR 251 crore versus the INR 265 crore in H1 FY 2025, and consequently, H1 FY 2026 EBITDA for metric tons stood at INR 18,700 for metric ton approximately. Moving on to the regions. India, our domestic growth engine encountered a distinct set of challenges this quarter. The recent Goods and Services Tax rate reduction on FMCG products, while a welcome structural reform, prompted inventory adjustments by several large FMCG players. This recalibration led to softer offtake and subdued volumes for the quarter. Additionally, persistent high feedstock prices have accelerated the shift towards reformulation within the performance segment, further impacting our tier one category volumes. Despite these headwinds, non-tier one customer volumes grew robustly to compensate the tier one volume decline, resulting in overall flat volume performance for India on both year-on-year and quarter-on-quarter basis.
While this short-term disruption came as a surprise given that nobody was anticipating rationalization of Goods and Services Tax rates, we remain confident of a gradual but steady recovery once the adjustments get done with. We are seeing the first signs of the same in November, and based the discussions with our large customers, we do expect the same to continue. As far as the risk of reformulation is concerned, your company has undertaken the required capacity readjustments and developed the ultimate surfactants commercial capability. We expect the required approvals to come in this quarter and business to commercialize from Q4 FY 2026. With both these steps, we believe we should see steady improvement in India numbers starting from Q4 2025, 2026.
One important point that I would also like to share with you is that the fact that when the reformulation Goods and Services Tax price adjustments adversely impacted our India volumes by single digits, we entered H1 and this quarter flat due to market share gains were registered in this quarter with our non-tier one accounts in India and globally. This has been a major positive for us. I now move on to our AMET region. The AMET region recorded a modest single-digit volume decline quarter-on-quarter, and a high single-digit decline on a year-on-year basis.
This was primarily driven by continued market share erosion in Egypt by the tier one segment due to intensified competition from aggressive local players who are backward integrated. On a more positive note, Turkey delivered strong double-digit volume growth on both quarter-on-quarter and year-on-year basis, helping to partially offset the slower-than-expected recovery in Egypt and other AMET markets.
To address these challenges, our teams are actively engaging with customers to mitigate headwinds, restore market momentum, and reinforce strategic partnerships across the region. Coming to rest of the world, rest of the world region delivered a mixed performance this quarter. Latin America and Asia Pacific maintained their strong growth trajectory, posting double-digit year-on-year gains fueled by robust demand across both Performance Surfactants and Specialty Care product segments. In contrast, North America saw a decline primarily due to reciprocal tariffs that impacted demand and margins in the Specialty Care segment. While within this, the segment of specialty products was particularly affected, the super specialty masstige segment led by TRI-K Industries continued to perform well, helping us to sustain momentum and partially offsetting the margin pressure. Despite these regional variances, we remain focused on capitalizing on growth opportunities in high-performing markets while proactively addressing the challenges in impacted geographies.
Coming to the supply side, there were few encouraging developments alongside persistent challenges. Freight cost eased compared to previous quarters, offering some relief. However, shipment delays continued due to ongoing port congestion and blank sailings. Raw material availability showed signs of improvement, yet pricing pressure remains, particularly in the oleochemical segment. Despite the harvest season, lower than expected palm oil production has kept feedstock prices elevated, and this trend is expected to continue and persist into October and November as well. Before we close this call, I would like to take this opportunity to share the adverse cumulative impact on our EBITDA due to the reciprocal tariffs imports by the U.S. government. For the full year, we do see that certain businesses have been put on hold, as well as certain projects in pipeline, which are expected to fructify this year, have now been delayed.
Cumulatively, the impact for the whole year works out in the range of 3%-5% of our FY 2025 EBITDA. We are assessing the impact as to what would be the implication due to the inflationary effects of tariffs of consumer demand. We are in touch with the customers, or they are going slow in terms of commercializing the projects in pipeline because they too are wary of the impact that the inflation there would have on their demand. Essentially, all of them are going slow in terms of building the inventory in the pipeline. To conclude, while volumes remain stable, the near-term outlook appears muted, reflecting global business challenges and margin pressures across both segments. Despite these headwinds, our core fundamentals remain strong. Succinctly, we still believe and are confident that despite these headwinds, the compounding story remains intact. Growth will never be linear, but always exponential.
To prepare for the same, as we navigate through the troubled waters, steadying our ship, sharpening our strategic focus, implementing targeted tactical adjustments, enhancing operational agility, and strengthening our portfolio to ensure resilience and sustained relevance in the market will be the key. Yes, it has not been easy, but we believe after eight quarters of sluggish performance due to multiple global headwinds, we as a team are fully prepared to take these challenges head-on and are extremely positive in terms of achieving our strategic vision. Thank you for the continued trust. I now open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 Sanjesh Jain from ICICI Securities. Please go ahead.
Good afternoon, sir.
Good afternoon.
Good afternoon, sir. I got few questions, and thanks for taking them.
Yeah.
From the India-
Yeah.
There is an issue on the demand side and there is an issue on the reformulation side.
Correct.
On the reformulation side, can you help us understand what could be the potential impact that will have cost on our Performance Surfactants volume? Or what percentage of the customer's requirement of LA has moved to something else? Is it material? Have they reached high single digit in terms of reformulation? Where are we in this cycle? Do you think this is more structural or it is- Because we have never heard reformulation in the past now. It appears more structural in nature. Would that be a fair assumption?
Yeah. I will first answer the second question first. We do not see this as anything structural, because in my last 32 years in this business, this is probably the fifth time that we are going through this situation. Elevated fatty alcohol prices, okay, people looking at reformulation. Even when we speak to our customers, okay, they are very clear that this is not something they would like to do structural, because you are trying to put a petrochemical ingredient into a personal care formulation.
This is more in terms of the demand environment for all our customers not being so healthy in India, coupled with the inflationary impact. They are all trying to see as to how they are able to manage the short term, and that is why very clear that this is not structural. With regard to the impact, if you see, most of the reformulations really started gaining pace, say, probably from August of this year. Probably, I think we see that in India, we could have done, in the quarter, about 3,000- 4,000 tons higher volume if this reformulation had not happened.
Got it. On the demand starting in the Q3 and Q4, do you think that GST thing is largely behind and from the reformulation we should be starting few new products should help us? What should we look at, say, Q3 and Q4 in terms of the India growth rate?
See, with regard to Q3, the way I see it is that I am looking at from a positive side, it being almost similar to what Q3 would be because all our customers, in fact, even if I see their commentary, all of them are saying that even into October and the festive season got impacted because of the GST. Essentially this festive season demand is something that has created more demand in the pipeline in addition to relabeling and all those issues that they have. So when you speak to customers, most all of them are indicating that things should start looking up from Q1.
There is also the added issue which all of them are sharing with us in terms of a very severe and external winter, and that does have impact in terms of volumes of your FMCG products. We are in dialogue with customers, but as of now, we do see that the pain continued even into October. So I would be very happy if we are able to end our numbers on similar lines as Q3. Q2, sorry.
Clearly, the recovery does not look like Q3, certainly looks like to be a third quarter and then probably hopeful from Q4 and Q1.
Yes, correct.
In the AMET side, we are already 30% lower in terms of our annual volumes from the peak, which was four, five years back, and we are still continue to decline a high single digit. Is there any base there in terms of can it get down? I thought now the base will catch up and the growth should come back. What is really happening in Egypt there?
See, what also is happening is that if you look at all these markets, essentially Africa, Middle East, Turkey is majorly a home care market in terms of end use application that we cater to. Personal care does form a, we cater to. But if you see in AMET market, that is a significant part that we are participating. Now, these high prices of feedstock, mainly fatty alcohol, is also prompting some of them to be looking at whether they reduce the active ingredient in the formulation, whether they can add little bit more of a petrochemical ingredient into the formulation. This is something also that is happening because in Africa, Middle East, Turkey, all of them are still continue to ravaged by inflation, and all of them looking at various ways to be keeping cost under control. The reformulation is something that is being done there as well.
That is the only reason why we see that this has been a quarter where we have had a degrowth. Otherwise, essentially, it has bottomed out in terms of it not going further down from here from a demand side. But the high fatty alcohol prices is prompting people to look at certain reformulations even in the AMET market.
In AMET, I thought we were already engaging with the products, right? It was India that we did not manufacture, I think.
No, in India, there are two, three things. One is we are making certain of your petrochemical base. We make LABSA there. But even in LABSA, the major issue when I say reformulation in AMET, it is in terms of reducing the active component. So it is not about replacing whether any of are into. Even if they replace an organic chemical with a petrochemical ingredient. Because even if you look at, it is a combination. You have organic chemical and petrochemical ingredient. So if there is a cost inflation there, they like to look at reducing active content. So if they reduce active content, say from 10% to 9%, talk about a 10% degrowth in terms of our volumes. That is the way it is.
We are already down 30% net present from the peak.
It is correct. That was essentially, which we said was due to the loss of share by all our tier one accounts in the markets to the local integrated players. That is what has caused that particular demand, which obviously demand has gone out of our basket.
Got it.
Yeah.
The ROW-
Mr. Sanjesh . I am sorry to interrupt, but may I please request you to follow back in the queue?
That's fine. Thanks, Natarajan sir, for answering all.
Yeah, please come back. No problem. Thank you.
Thank you. Bye.
Thank you. The next question comes from the line of Arun from Avendus Spark. Please go ahead.
Good afternoon, Natarajan. Thanks for the opportunity. My first question, we seem to be increasing our volume contribution from the rest of the world. But at the same time, our gross margin per kg has also sequentially dropped. Typically, our rest of the world volumes comprises of more premium and masstige products. What is the reason for this dichotomy?
What you're saying is that, with the specialty growth happening, the gross contribution per metric ton is down. Is that what is the question?
Yes, sir.
What is also important is that it's a question of the composition. If you look at, say, in the rest of the world, we also have a combination of Performance Surfactants and Specialty Care. That's what we see when I told in my speech that the tier one impact due to reformulation that has happened majorly in India, we have recouped to our tier two, tier three customers by being aggressive with them in terms of our getting higher share of their business. It's also that we are more in attack in terms of seeing how do we bridge the gap in terms of mitigating the impact of the Performance Surfactants as well. Specialty Care, if you see, rest of the world is not entirely driven. In fact, the growth that has happened even in this quarter, we have had Performance Surfactants also contributing to the volume growth.
Okay. What I understand is the offset coming from the India impact is not completely offset by the rest of the world volume growth.
Yeah, correct. It is not enough to be offset in the full volume. Okay? Because that's something that will happen in the month, because it's not that you can adjust immediately. We are working on that. Okay. And we should see things getting in place in the coming months.
All right. Now that we have fairly good visibility, would you like to update your guidance on both EBITDA per kg and volume growth for the year?
I said in the last call also that we don't want to be giving any guidance. Although I said, I don't want to be changing the long-term that we had talked about 6%-8% growth in this, because in the current one, I don't want to be either revising or stating any guidance. But I would say that, if I can probably look at Q3, I don't want to be assuming any guess for Q4. Okay, because things are still pretty volatile in terms of the external situation. Because there can be some tailwinds in case there's a deal that U.S. reaches that can have a good impact for us in Q4. Okay. There is a possibility that your fatty alcohol prices can correct. The Goods and Services Tax impact can be better for us from Q4.
I don't want to be assuming any guess there, because I do see Q4 can have a lot of positives. But if I look at Q3, I would like to restrict my listening to Q3. As I even responded earlier to Sanjesh, I think I'd be happy if I end Q3 on the same lines as Q2. And I should be in a better position to talk about the full year when I'm going to be into the call for Q3.
Understood, sir. Sir, earlier you said we have seen high instances of where the reformulation happened in the past. This is the first one. Typically, what is the duration for the reversal to happen in the past and should we expect similar timeline this time also?
Yes. The reversal, typically, what I have seen is that those reversals happen probably in about 12-15 months. That's what we have seen earlier after the reformulation has happened. Okay, but obviously, the reformulations start happening after the original prices start correcting and the customers do see that it is going to sustain. And based on the last five experience that I've had, it's been anywhere from 12-15 months. And the first indication-
This will be the function. Sorry. Yes, sir.
This will be a function of how the palm kernel oil prices start coming down. There are some indications of it coming down in the last two weeks. We need to wait and watch.
Understood. Sir, my second question is on tariffs. U.S. tariffs you mentioned, you also elaborated on the impact we had. My worry is that after a prolonged period of Galaxy not supplying volumes to U.S. customers and U.S. customers getting used to the other suppliers, do you see the risk of we permanently losing some of this business even if the, say, tariffs reverse back?
In fact, the first question is when we talk to our customers, they are not happy with this tariff coming in because you know that every customer would want to have a diversified vendor base and also more dependable vendors. They are not in a good situation where they are looking at the earliest opportunity where they can get back to business with us. This tariff of 50% is only making it very difficult. Even as we are talking about this, we also need to know, as I even explained last time, and I did allude to that in the speech of mine, there are some products that we are looking at how we can shift that to Egypt. We are working with customers on approvals. We have already started, some of it being shifted there.
There's some of it where we are looking at how we are able to create some ways to engage with customers to see as to how we are able to participate despite these particular headwinds. We are trying to accelerate or gain momentum in certain projects in pipeline because all customers, when they started, they obviously had a local source, but they were looking at how they diversify their vendor base with someone like Galaxy where we have a local supply chain, and they also have a good experience in terms of the relationships that we have with them. I do see that it's not as if when tariffs do alter, things will be extremely positive for us. That we are very clear. Customers are not happy only being with certain few vendors locally.
Understood, sir.
The other thing that we also said, other thing also in terms of countering this, we are now going aggressive in terms of our special ingredients business, how we are going to quickly convert and build pipelines in Latin America, APAC and Europe. We are seeing good amount of momentum that's gathering in terms of building more projects in pipeline. So we have started diverting resources in terms of aggressively building projects in pipeline in the other geographies, that is Europe, LATAM, and Asia Pacific. That's another way to ensure that we stay prepared in case there will be some time by the time customers come back in U.S.
Understood. Thank you very much, sir. Wonderful.
Thank you.
Thank you. Ladies and gentlemen, before we move forward to the next question, we request you to restrict your questions to two questions per participant. The next question comes from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Thank you, sir, for the opportunity. Sir, just wanted to reconfirm, this reformulation has led to loss of volumes in tier one, but our aggressive marketing strategies in tier two and tier three has somewhat recouped the volume. But complete volume hasn't been recovered. So which is the reason for the volume loss? Is this correct, sir?
It's correct.
Okay. Because, sir, this reformulation, how difficult is it for any other competitor other than Galaxy Surfactants to just supply in time and even for Galaxy Surfactants, because we have the largest capacity. How difficult it would be for any other player or competitor to reformulate and give the supply in time to the customers?
See, the issue is different here. We are actually the largest player of surfactants derived from the oleochemical source. We are never into surfactants in India from the petrochemical source. When people are replacing the oleochemical surfactants with petrochemical surfactants, we did not have that. We did not have it because that is not a market we want to be building our capabilities on. People who are essentially focused only on petrochemical surfactants obviously had an advantage when the reformulation happened. We are now working and getting ready by this quarter end in terms of our commercial capability on the alternate surfactant which is petrochemical-based. That is what it is. When the reform happened, our loss was an opportunity for our competition who are essentially majorly into petrochemical-based surfactants.
Okay. Sir, onto the raw material side, the raw material price. I think, sir, they started the raw material prices going up in Q2 of last financial year, and currently also it is going one way up only. Any particular reason why the RM prices are so sticky? We have said earlier that RM prices will go down, but it does not seem any respite.
Essentially, it is because I think the lower yield that has happened in Malaysia and Indonesia is what is impacting. But then there is also a situation in terms of certain positions the market takes. We now need to wait because the underlying demand, okay, really world over, the way we see it, is not really keeping pace.
Whether you look at Europe or you look at U.S., with all this coming in, obviously the demand side is what is now going to be. Because in agital commodities, major, this thing is driven by what happens on the supply side. The supply side has not been to this thing. It has not been supportive in terms of bringing the prices down. But we do see as we move forward in terms of all these headwinds on the demand side, the demand side will start bringing the required corrections, but we need to wait and watch.
Sir, just last two questions. Sir, first on to our EBITDA trend, I think, sir, we are standing again at a low. How you see this could be the bottom and despite some lower RM prices to support EBITDA, sir? First question on this. And second, sir, how are we looking at the growth? I think because of muted demand, how you are recalibrating the growth for FY 2026 and FY 2027?
First of all, that's what I said when I had to answer that to the earlier question. I was very clear that I am restricting my listing to Q3, where I said I would look at Q3 ending the same as Q2. So I don't want to be asserting any guess on Q4. It's suffice to say that Q4 should present us some positives, but it's too early to comment on that. I don't want to assert any guess. So that sort is something that I would like to mention here with regard to Q3. I don't want to get full year this year and next year. I think for that, we need to wait for at least two, three more months when we meet again.
Outlook on spreads also, sir, that would be similar, like we would be waiting for something.
Outlook on?
Spreads. EBITDA spreads, gross spreads.
Yeah, we need to wait because I think there are too many moving parts now, so things have to settle down. That is why I do not want to be giving any listing, which I clearly do not have today. I want to be as transparent as I can be, but that is based on what information I have as of today. So I do not want to assert any guess. Suffice to say that Q4 should give us some positive tailwinds, but I need to wait for that.
Got it. Thank you, sir.
Thank you. Before we take the next question, a reminder to all the participants to limit your questions to two questions per participant. The next question comes from the line of Rohit Nagraj from 360 ONE Capital. Please go ahead.
Thanks for the opportunity. Sir, first question is on Egypt. We have seen that in the last few years, AMET has been grappling with some of the other challenges. Despite having our own facility locally in Egypt, we have again said that during this quarter, there has been intensified local competition. What is the strategy that we are looking at from a volume growth perspective in Egypt and for the entire AMET region incrementally? Thank you.
First of all, one is we need to look at Africa, Middle East, Turkey as a market, and one is Egypt as an entity, our Galaxy Chemicals Egypt. The first thing that needs to be understood is as an entity, Galaxy Chemicals Egypt is doing very well in terms of its product portfolio. It has actually been a great move for us in terms of going into Egypt. We continue to stay positive and remain focused on how do we start enhancing our capabilities in our Egypt entity. Now, coming to the market, that is the region of Africa, Middle East, Turkey.
We do see that most of the economies are ravaged by inflation, and this is something that we have seen that as things get better for one year and it also with all the geopolitical tensions and everything, you have two to three years of a very muted situation. The way that we are working on is how are we going to be looking at the markets, other than in the rest of the world, look at how do we enhance things in Latin America, in Asia Pacific. For Egypt entity, Latin America is a very good market because in terms of your logistics supply chain capabilities, I think that is the best place. That is how we are working.
As we are looking at how we enhance business in some of the countries, because we have to also be careful in terms of the volatile situation that happens in terms of demand. You cannot be basing all your listing in terms of the way things would happen in AMET. It is a two-pronged approach as we continue to remain focused and look at how we enhance our presence in the geographies to the extent that we can within AMET. Given all the constraints, we are looking at how we use our relationship and our presence in other parts of ROW to be enhancing our volumes there. You see that that actually has shown results even in the last quarter in terms of Latin America and APAC really doing well.
Sure. Thanks. Sir, second question is on the EPC contract. Is there any possibility of recognizing any fees during FY 2025, and when will we be able to recognize the entire fee? Maybe toward the timeline.
I think my looks here for Abhijit will answer this. I think he is better positioned to answer this. Yeah, Abhijit.
Yeah. Hi. The project is progressing well that we have currently. But again, as this is a sort of a construction type of a project, we will be only able to recognize revenue based on certain minimum completion of the project percentage. Currently, we will not be able to give any number as to what we will be able to recognize towards the year-end. But it will be sufficient to say now that it is progressing well and as per the timeline.
Sir, just a clarification. The entire recognition will happen maybe in next two years' time?
Yeah. It is a more than a year project, so it will be spread over a period of more than a year.
Sure. And just one clarification. I probably missed the number of EBITDA per metric ton during this quarter and any specific reason for omitting it from our press release or presentation. Thank you.
EBITDA for the quarter. We have given for H1.
EBITDA per ton for Q2.
EBITDA for the quarter was INR 17,300 per metric ton.
Sure. Thanks a lot and all the best.
Yeah, thank you. Bye.
Thank you. The next question comes from the line of Keyur Pandya from ICICI Prudential Life Insurance. Please go ahead.
Thank you. Hi, team. Sir, my first question is on the volume discussion you are having. So keeping aside the reformulation part, overall industry growth point of view, are you seeing demand recovery for, say, India volumes considering the entire industry, both tier one, tier two, tier three, all the clients at the industry level, is demand reviving? And second, on the rest of the world, and possible slowdown as you're talking about because of the tariffs and high base for us for last couple of years in rest of the world. As a direction, should we see lowering of the volume growth in rest of the world? So basically, industry trend for both India and rest of the world, let's say in next two, three quarters.
First of all, India, this I have to answer in two parts because the market growth rate is relevant as far as India is concerned because we obviously have a significant share. So in India, if I read all my customer con call and their investor presentations, all of them have talked about the Goods and Services Tax being impacting their results. In fact, few of our big customers even gave an interim guidance saying that it will be lower and the impact, and they all said they expect the pain to continue into October. But they also added, saying that since it is structurally good, we do see that this really helping demand getting reactivated.
I do see that that should start happening from Q4 of this year, because anyhow they are all saying that Q3 is going to be a problem because we missed the festive demand. Second is they do see an extended and a more severe winter. That answers so now we will have to wait. That is what I said, we need to wait for Q4 to understand whether in India the industry demand growth rate is picking up.
If you look at it for last 6 months, all of them have reported either flat or most of them have reported close to 1% or 2% growth. Okay. In underlying volume growth. Now I come back to rest of the world. So rest of the world, what the market growth is do not bother us because it is not that we have a very high share there. So it is all about how we hunt for new customers and farm more share with our existing customers.
Okay.
That is what is happening and that is what showed results in Q2 and we do not see any reason why it cannot do that. Even suppose you have structurally the market there does not grow as well as it is supposed to, that is not something that will be a concern for us, okay, because we will be able to start progressing certain developments. It is only that the customer's outlook, okay, has to be positive on Specialty Care because they would start looking at approvals, okay. But on Performance Surfactants, we do not see there is an issue because we are not having any great share in those markets.
Okay. Fair enough. Sir, second question, either say specifically to say oleochemical based effect and peers globally or basically whosoever are your large competitors globally. Any, say, financial challenge because of such prolonged slowdown? So any supply side or supply cut possible or financial deterioration in health of any of your peers? That is first point, which either leads to lower supply or which either provides us opportunity to acquire or to have some kind of inorganic opportunity.
Yeah. So essentially, this I can say will only happen if structurally things are going to be different and it is going to be a continued situation. I do not see that being a structural situation now. So I think all my peers would have the ability to go through with this short-term situation. But it is a different story if structurally it remains to be so. But I think, as I said, we need to wait at least for the next one year to be able to understand these implications.
Understood. And sir, just last question based on your analyst meet where you mentioned, say, diversification into personal care or skin-related products. Any update on progress on, say, organic or inorganic opportunities that you have? You may not have finalized, but any progress either organically or inorganically if you have shortlisted some or have seen
I will say organically, in fact, the recent in-cosmetics in Bangkok, we launched five products, all in the sun care range, the latest second generation sunscreen molecules, which was essentially in November first week. So that is as recent as now. Also with regard to what we said on the beauty segment, we said we will be onto more on the leave-on skin formulations. So we have added a good range of products also that we have launched on that front and I am happy to share that a very healthy pipeline products in pipeline is being built across say, APAC, Europe and U.S. in terms of these molecules. When we launched these sun care ingredients, five of them in Bangkok, I think we received a very fantastic response from all our customers and probably I think we are seeing that essentially is going to be taking off well.
I can have much better view on them in the next quarter when we talk. Inorganic, so we are obviously on the lookout, but there is nothing that we are currently working on. We know what needs to be done. But that is something that we are reviewing, but it is not something that we have anything on hand where we are going to conclude something.
Noted, sir. Thanks and all the best.
Thank you.
Thank you. The next question comes from the line of Umang Shah from Banyan Tree Advisors. Please go ahead.
Hi, sir. Thank you for the opportunity. Am I audible?
Yeah, you are.
Okay, great. Thank you so much, sir. Our first question was, we mentioned that we have gained some market share in India. From what our understanding was, we already had a very high market share. Can you help us understand in which segment or in which vertical were we able to gain this market share?
We did not say, and then I need to correct you. What I said was, we gained largest share of our business with tier two and tier three customers.
Oh.
Because in tier one, we did get impacted by the reformulation. That is what I said, but that to a large extent mitigate, but not fully the sort of volume impact. It is not an overall market share. Yeah.
Okay. Got it. And sir, second question was, now that there are these tariff headwinds and globalization itself isn't under consideration, are we looking to expand capacity in TRI-K and the revenues that have not grown as much as the other entities? What is the plan there?
Oh, yeah. We are looking at how we respond to this, because on the tariff side, to take any investment decision, you need to have clarity in terms of how sustainable those tariffs will be. We also have to work out in terms of how the demand is going to get impacted. Already there are some murmurs in terms of inflation rearing its head in the U.S. So we'll have to wait. As we are preparing our plans on the drawing board to be ready, okay.
We also are very clear that we need to set up capacity that can be cost competitive. Okay? Because we know that U.S. as an economy is when you set up any investment, it's going to have its own cost implications. So we are reviewing all that, and we are getting ready on the drawing board. But right now, we are not looking at moving on that. Once everything falls in place, okay, we have the balance sheet to move on there quickly, so that's not an issue.
Sure, sir. Thank you. I'll get back in the queue.
Yeah.
Thank you. The next question comes from the line of Divyansh Gupta from Latent Advisors PMS. Please go ahead.
Sir, am I audible?
Yeah.
Just one question with respect to your opening comments where you said in, let's say, U.S., because of tariffs, there is a project delay and product approval delay. Is it specific only to Galaxy and 50% tariffs in India, or is it in general? Because if it is general, even if the tariffs go back, then the challenge of customer demand in U.S. or inflation will remain. Just wanted to get a sense on that.
If you ask me, just to underscore what I'm trying to communicate, if one of the biggest players and our customers in the U.S. market has very clearly talked about U.S. being a cause of concern for them, and they're looking at China as their way to be able to compensate that. That tells you currently what people are seeing in the market. I have every reason to believe that it's not only specific to us, it's to everyone who has got an impact because of tariff, because there is a tariff even the local players. But from India, the impact is much higher because we are at 50%, whereas every person, even for their feedstock, the local players have to be bearing a tariff.
The delta between the tariff implication is what is. The other thing is, the reason is all of them are reviewing their supply chain. When someone is in the process of reviewing, all my customers are reviewing their supply chain. What is coming from where? What we need to do? How can I make it sustainable? How do I manage the short-term? What should be my plan for the medium-term? When all this is happening, their ability to focus on currently building projects that we are working with them, it is not that they have shelved it, they are saying that we need some time. That is where the impact has happened.
Got it. Understood. That is all, sir. Thank you.
Thank you. The next question comes from the line of Umang Shah from Banyan Tree Advisors. Please go ahead.
Hi, sir. Thank you again for taking my question. Just to understand, when we are looking at Specialty Surfactants, we had various types in that, right from mild surfactants to other segments also. Would you like to call out any segment which has had either a disproportionate benefit or a disadvantage while we are going through this?
On the tariff side?
Yes, yes, both tariffs and overall slowdown.
Yeah. See, it is product-wise. I may not want to get into the specifics because we are also working on finding solutions in terms of re-engineering our supply chain for some of the products into Egypt. For the sake of confidentiality, I do not want to be mentioning in specific. Okay. But it is suffice to say that we are looking at how good portion of this impact, if it continues with tariff, can be managed through our re-engineering supplies through my Egypt facility. Okay. We are also looking at if these tariffs are going to be sustaining, how do we look at building certain capacities in Egypt? Okay. But as of now, we will not be able to discuss in specifics on the product categories.
No, sir. Not a problem. Second question was, our CWIP is around almost INR 260 crore as of FY 2025. Can you help us understand where will this new capacity be put in?
Yeah, most of them will be in India, some of it in Egypt, but most of it will be in India in terms of what projects we initiated a year and a half back. They are coming to fruition. So those are all what was there in the CapEx, capital work in progress.
Okay, sure. Thank you.
Thank you. As there are no further questions, I would now like to hand the conference over to management for closing comments.
Thank you, ladies and gentlemen, for your interest in our organization and being patiently listening to us and posing certain very crisp questions and very insightful questions. Thank you so much. Look forward to being with all of you again three months from now. Thank you and all the best. Have a good day.
Thank you. This brings the conference call to an end. On behalf of Galaxy Surfactants Limited, we thank you all for joining us. You may now disconnect your lines. Thank you.