Fairchem Organics Limited (FAIRCHEMOR) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q4FY26 conference call of FairCam Organics Limited. As a reminder, all participant lines will bend 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. I now hand the conference with Ms. Prarangi Jain from Valorum Advisors. Thank you and over to you, ma'am.

Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Prarangi Jain from Valorum Advisors. We represent the Investor Relations of Fair Care Organics Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. Before we begin, a quick cautionary statement. Some of the statements made in today's concord may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management team joining us on today's call. We have with us Mr. Naush Rariwala, Managing Director and Chairman, and Mr. Bhavesh Shah, Chief Financial Officer. Without any delay, I would like to hand over the call to Mr. Bhavesh Shah to begin with the financial highlights. Thank you, and over with you, sir.

Thank you. Thanks, and good afternoon, everyone. Welcome to the earning call for Q4, and 12 months has ended FIF 26. For the quarter under review, the revenue from the operation stood at Rs.117 crores, reflecting a 3.2% year-on-year decline from the corresponding quarter. EBITDA for the quarter was 8 crores with EBITDA margin of 6.9%. The adjusted net profit after tax for the quarter stood at Rs.3.7 crores. For the year ended FY26, the revenue from operations stood at 460 crores, a decline of 14.5% against the previous year. The EBITDA was 22 crores with an EBITDA margin of 4.7 crores. The net profit after tax stood at 6.2 crores. The domestic sales contributed 91% of the total revenue. The total volume sold was 44,000 tons against 54,000 tons in the previous year. During Q4, we have successfully completed the buyback of 4.25 lakh shares, which has increased the promoter of holding from 6.2% to 63.2%. With this, I will hand over the call to our CMD, Mr. Naurjad Uwala. Thank you, Bhavast.

As we close the FY26, I want to take a moment to share our operational perspective on the quarter and, more importantly, the road ahead. The Q4 F526 continued to present a mixed environment. Our revenue from operations saw a decline of 3% on a year-to-year basis, driven largely by software offtake from the paint industry. Which, as you are aware, has been navigating its own structural adjustments over past several quarters. That said, I am pleased to note that our EBITDA margins improved to 6.8% during the quarter. This improvement was primarily supported by better price realization in the domestic market, as the pressure from lower price imports moderated to quite an extent. On the external environment, while we remain watchful of evolving macroeconomic situation, including the uncertainty arising from the ongoing Middle East crisis and its potential impact on global supply chains and commodity prices. We are aware at the same time... Consciously optimistic about trajectory ahead. The continued progress on a lower tariff framework with US, the prospect of free trade agreement with UK and EU, and the recent depreciation of rupee together has created a meaningful tailwind for our export competitiveness. Despite the near-term uncertainty, we remain quite confident and committed to navigate this environment with discipline and resilience. We are confident that steps we are taking today will position us well for the future. With that, I open the floor for question-answer session.

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 withdraw 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. A reminder to all the participants, anyone who wishes to ask a question, please press star and 1. Participants, you may please press star and want to ask a question. First question is from the line of Rakesh Jain, an individual investor. Please go ahead.

Hello. Hello. Am I out of it? Yes, we are out of it. So, the pain segment has been, uh, hello?

Yes, yes, yes, we can hear you. Yeah, yeah.

The pain segment has been the primary demand, uh,

I'm sorry, uh, Mr. Jain, can you, uh, please repeat your question? We are unable to hear you.

Great. So, the pain segment has taken some headwinds over the past few quarters. So, do we see any recovery?

Yes, we have started seeing recovery during the month of March, and even during this quarter, we see a robust recovery.

My second question is regarding the company started revenue. So, we were targeting nearly 20,000 million. Any guidance regarding that?

Oh, that's a very, very long-term future. I mean, that is something which is a vision which we are working on. So, it's after five years.

Okay, that was it for now.

Thank you. Okay.

Thank you. Before we take the next question, a reminder to all the participants, you may press star and 1 to ask a question. We will take our next question from the line of Banisha, from an individual investor. Please go ahead.

Hello. So, my first question is, on the FDA with the EU and UK, what specific product stands to benefit the most? For example, like the iso-ceric acid or dimer acid or others. And what is the current duty differentials that make this market attractive once the FTA is in place, sir?

Both isosteoric and dimer will, if the duty, the end-person duty will help both isosteoric and dimer, that is more important. And, as regards the duty differential... Between other countries and India, we are on par with all the countries. So, I mean, it's a healthy competition for us when we are quoting our price to US buyers.

Okay, sir. Also, I have seen one more observation. Like, power and fuel cost has declined significantly in Q4-FIT in 2016 to INR 60 million from INR 80 million in savings. In Q5-425, is this a result of the energy audit?

Yes, we did for one year. I mean, during the preceding whole year, we did the energy audit of the plant, and based on that, we, looking at the PMIC, we invested in electrical equipment, pumps, motors. We reduced our, we invested in heat exchangers, etc. And based on that, this achievement has been there. And we are, it's still ongoing. We expect further reduction in energy cost.

Thank you. Next question is from the line of Dhavneet from Tavla Family Office. Please go ahead.

Hi. My first question is with regards to our margin. So, going forward, are we expected to go back to what was our FY25 margin of EBIT margins of around 8% if the situation normalizes? Or are we going to see a further margin expansion also, considering the initiatives we have taken in the last year to improve the cost structure? And secondly, on the long-term revenue growth, we are saying that we are going to try to achieve 20,000 by... So can you tell us that where actually this expansion in revenue, which we are planning to see, is coming from?

Margins are going to be... Be better this year. I mean, obviously, we are targeting to breach 8% margins. And we are fairly confident we will be able to breach that. That is one thing. And as regards the revenue thing, Currently, our plant is of 80,000 tons, and we are working at around 65-66% capacity utilization. We are confident in the next two years our plant would start working at more than 95% capacity utilization. And second thing is we will be adding one new raw material, which is based on a new novel process, which we have been seeing. And so, yes, based on that. This is the vision which we feel we might be able to reach.

At 95%, also the EBIT margin will remain around 8% or are we going to, can it reach even further up considering that... It can, it can, it can, it can creep up.

Operating leverage will come.

Okay, and this additional product, is this also in the paint industry or is it more of a No,

it's basically from the oleochemical basket only.

Oh, thank you.

Thank you. Next question is from the line of Chirag Bikaria from Badrani Finance Limited. Please go ahead.

Sir, I wanted to get a sense from you for financial year 26. In terms of turnover, sir, how much contribution is from dimer acid, leonic acid, and isoteric acid? If you can throw some light.

So, dimer acid has contributed. Just a minute. Isosteric acid has contributed close to around 140 crores and isosteric acid has contributed 26 crores.

30% and around 5-6%.

I did not get it, sir.

Dimer acid is around 30% and 5%.

And lionic acid, sir?

So lionic acid is around 30%.

Okay, okay. Sir, and in terms of volume, sir, I did not get your thing. For FY26, you did a volume of how much? How much?

Q4, we did 10,500 tons. And for the whole year, we have done 44,000.

And this for FY27, how do you see, sir, this panning out?

We expect to reach around 80% capacity utilization.

Of the 120,000 done, for the 80,000, sir?

No, of 80,000.

Okay.

I'm sorry, Keshav, we are not able to hear you.

Hello, is this, hello, I hope my voice is audible.

Yeah, please proceed.

Yeah, sir, so I wanted to ask you that our, this, what used to be Adani Wilmer, sir, now they are forward integrating into oleoresins. So, I understand since they are already into edible oil refinerying, so whatever raw material we are probably buying from them, so for them it is a forward integration. So, sir, what kind of impact can it have on our business and our margins?

Adani Bilmar is already in oleochemical since year 2010. They are already in the, basically, they are working on utilizing the palm-based products in their oreo. The products what we are using are all soft oil-based products, and which are produced in a very small quantity to the tune of 1% of the crude oil. So, it's, I mean, the equipments and market and process, everything is different for both the products.

Understood, sir. And, sir, also, now, recently, we are hearing a lot about Chinese anti-involution, and that they are basically, at least they are talking about stopping the aggressive dumping. So, are we seeing any kind of relief on that count? Yes, we have seen.

We have already seen that since February end.

Okay. Sir, so then how much further improvement can we expect for effort 27, if you could give us some broad outline, what kind of top line?

Well, it's not possible for me to really see. What we are saying is, we are targeting to work at 75-80% capacity. Utilization and our margins obviously will improve. Uh, because, uh, there is no major dumping happening from Chinese.

And, sir, uh, now, sir, uh, what kind of improvement in realizations have we seen in recent times? Fairly good.

Fairly good.

Yeah, because Chinese dumping is not happening, so our realization, we are able to sell at a good rate. Good rate.

So, at least in percentage terms, if you could shed some light or, like, per kg, how much have our major products increased?

No, no, no, no, no, no, it won't be possible for me to share that.

Even percentage-wise, like, 10%, 5%, something, like, broad, directional, this thing.

Yeah, around 8 to 10% improvement has happened.

And, sir, also, rupee has fallen quite significantly, I guess.

Yeah, that is also... That is increased the import cost. That is...

And once our export will improve, that will add to our bottom line.

It is helping us in air exports.

Great, sir. Thanks a lot.

Thank you. Next question is from the line of Maitri Shah from Sapphire Capital. Please go ahead.

Yeah, hello. Good evening. Am I on the list? Yeah, a few questions on the export. So, you mentioned a lot of tailwinds that are happening on the export side. So, any color on how the growth is going to be like? So, what is our current contribution from the export and how we're going to scale that up going forward? Just a second.

So, our exports is close to around 9 percent. I mean, last year it was around 8 to 9 percent. We expect this to go by from 8 to 9 percent to around 20 percent.

There's going to be a major growth coming in on the export. How do you see the margin from...

Yeah, no. I mean, they'll be as similar to what margins we are making in domestic market.

So the margins are similar to the realizations are better? Yes, yes, yes. And also the long-term target of 2,000 crores that you have, any new verticals we are entering in or are we going to like expand in the current market?

I mean, we will be adding 40,000 tons to our 80,000 tons capacity of a new product. So, I mean, it's going to take long. It's basically five years.

Yeah, but that kind of requires a 40-45% growth. Are we, like, confident of doing that linearly over the next five, four, five years? Yes, we feel that.

I mean, we feel that we'll be able to do that.

Yeah, the efforts were on since last two, three years. In fact, last two years has been our world, not yours. So you have to see from the context of, so these activities are all standard from FY23 onwards. Unfortunately, because of macro environments, we underperformed in the last two years. But yes, efforts were going on since FY22. So you have to see from the context of eight years.

Correct. And the new, you said the raw material that you're going to add with 40,000 metric tons, so that kind of raw material has a higher, better margin, a better realization. What sort of product are we looking at?

No, it's a very, it's a newer raw material, obviously part of oleochemical stream. We'll be following a novel process, and we'll be doing it for the first time in India.

Okay, and similar kind of customers are we targeting for that, so we'll target the existing customers for the growth on that as well.

Yeah, yeah, yeah, yeah, yeah.

Okay, yeah, that is it for my sake. Thank you.

Thank you.

Thank you. Next question is from the line of Chiraj Bekaria from Badrani Plans Limited. Please go ahead.

So, few updates. Sir, what is the custom duty right now, sir? Is it the same as 16 and a half?

Yeah, it is 16 and a half right now.

Okay. And the last time you highlighted that vegetable oil prices were up. So, how are they behaving now? Has they cooled off?

No, no, they remain stable. They remain stable what they wear. So, they have remained stable.

And, sir, on the import duty on the dimer acid, has that changed or is it the same?

No, it's the same. 7.5%. 7.5%.

Okay, and, sir, the new product that we are suggesting should come in FY27 or FY28?

Uh, it should be around 27-28, somewhere that time, and then slowly it will pick up. And sir, do you think the worst quarter for us is over now and we should bottom out now? Yes, yes, yes, yes. Sure. For sure.

Okay, sir. Thank you, sir.

Thank you. Next question is from the line of Sanjay Shah, an individual investor. Please go ahead.

Hello, sir. Am I audible? So, my first question was about your margin. So, for Q4 F526, the revenue declined 3.2% YOY, but EBITDA improved sharply to 6.84% from 3.64% in Q4 F525. So, I wanted to ask, was this margin recovery driven more by lower raw material costs, reduced China import pressure, or a better product mix? And also, how sustainable is this improvement heading into the next quarter?

It is based on better price realization because of less dumping happening from China. That is one thing. And secondly, we see the same thing continuing even during this year.

Okay, sir. Thank you. That helps a lot. My second question was that the bypass fat products from PFAD and the new raw material for any specialty chemicals, as both mentioned, are your new product initiatives. So, what is the current stage for these? Are they in lab trials or commercial?

Bypass fat will be putting in that plant in operation next month. And as regards to the new product, by end of Q2, we should start the plant.

So sir, when should investors expect revenue contribution from Q2 only?

No, it will take, I mean, for bypass rate, it can start from Q3 onwards slowly. But for the new product, it will take minimum 2 to 1.5 years. Because of validation and everything, which is a long process.

Okay, sir. Got it. Thank you. And my last question was regarding your dividend. So, for this year, you have recommended a dividend of Rs. 1 per share, which is down sharply from Rs. 7.5 per share last year. So, is this reduction primarily a function of the temporary earnings drop or more of a conservative long-term dividend policy, especially in the context of...

No, no, no. It's basically because of temporary earning loss.

Okay, sir. Got it. Thank you so much.

Thank you very much. Next question is from the line of Keval Shah from JeeTee Investments. Please go ahead.

Hi, sir. Thank you for the opportunity. Sir, my first question was regarding, you mentioned that FI26 capacity was around 40, like, you know, the production was around 45,000 funds. And next year, we expect to do 75 to 80% utilization on a total capacity of 80,000 funds. Is that understanding right? Okay, so the stock line basically now should go back to where we were in 2000 and let's say FI24, FI25 kind of a thing. Yes. And is this majorly because of linoleic demand, linoleic acid demand coming back in the paint industry? Is it predominantly because of that?

No, no, no. It's basically less dumping happening from China. So we'll be able to...

Okay, so we were restraining from selling because of extremely adverse pricing and now we are able to do that. Yes, exactly, exactly. Okay, okay, understood. And also on the top of this, you said that pain sector has also kind of recovered a bit. Yeah, it looks like...

Yeah, somehow, I mean, we have a feeling that since last two months, Spain sector has started looking up.

Okay, and while it's doing a bit better, do we also see, you know, like also realizations are getting better and margins are, you know, don't seem to be bad.

Yeah, yeah, yeah, a little bit, yeah, a little bit better, a little bit better. So, overall, we feel confident that we'll be able to reach 8% margin.

But sir, with no Chinese, like a much lesser Chinese dumping and, you know, better capacity utilization, shouldn't the margins actually go back to what we used to do, like 12 to 15% range?

I mean, that is our dream. Obviously, we'll work hard to achieve that.

I mean, we won't let the most unturned to reach those levels.

We'll try our best. Okay. And sir, how is our progress on isosteric acid?

I know, like, it's really good. Fairly good. Fairly good. But what happened was, because of the 50% duty thing, our U.S. marketing was on hold, which has now started again. And as this is going in cosmetics, the timeline is very long. I mean, because they need to study lots of things. So, approvals take, once the sample goes, and approval takes minimum six, eight months a year, and then the first commercial shipment happens. That also, after first shipment, another six, eight months is taken. So, it's a long, long thing. It's, I mean, that's absolutely fine with us because, I mean, it creates anti-barriers for others in future. So, I mean, that's absolutely fine. As our product, I mean, product quality is fine. We are comfortable. Maybe if not today, tomorrow it will pick up.

Okay, so any early signs that we see because of tariff coming off and FTAs?

Obviously, people have started asking for samples. Now they are interested.

So FY27, FY28 could be years where we could see meaningful ramp-up for isosteric as well? Yes, yes. And that would be, that is very high margin product as you had mentioned. Yes, yes. So that would be an additional lever for our margin improvement.

Yes, yes.

Okay, okay, okay. Understood. That's about it. Thank you for answering the question.

Thank you. Next question is from the line of Sanjana Kamath, an individual investor. Please go ahead. Sanjana, your line is unmuted. Please proceed with your question. Hello? Yes, you are audible.

Yes, hi. I had a few questions. So, the U.S. level playing field tariffs, which are cited as a positive for the exports. So, have you already come in or have you started receiving inquiries for restarting the U.S. exports, specifically on the dimer acid side?

We have started exports, in fact. Commercial exports have started since two months. Though on small scale, but they have started it.

Okay, so what would be the realistic timeline for, let's say, meaningful export volume to resume back?

Around six months, max.

Okay, and also you had set a target for exports to reach almost 50% of the sales eventually. So currently the exports, they still appear to be very small part of the revenue.

When we said 50%, it was based on the current, I mean, products getting exported from current 80,000 tons capacity and 40,000 of new upcoming capacity. So, based on that, we had to recommend it. So, major is going to come from the new 40,000 tons capacity.

Okay, got that. So, what would be the current export percentage and what would they look like in, like, let's say, 12 to 14 months? What would the export roadmap look like?

Currently, it's around 8 to 10 percent. We expect to reach anything about 20 percent.

Okay, and if possible, could you share, like, you mentioned the rupee depreciation as a tailwind for our export competitiveness, right? So, like, how much does 1% move in your rupee impact or export realization? Do we have any data on it? Could you share?

No, no, no, no, because see, I mean, it's not only one way, because if the rupee depreciates our raw material also go up a little bit, our energy cost also in form of coal also would go up a little bit, but the export realization is much higher than these two things, so we feel it's, I mean, devaluation helps us. No, we don't have exactly any figures of that.

Okay, thank you so much.

Thank you. Next question is from the line of Ketan R. Cheda, an individual investor. Please go ahead.

Hi. Thank you for the opportunity. Sir, can you tell us in FY26, what was the concentration in terms of the industry where we supplied our products, like paints being the highest, and what was the next highest industry, and so and so forth, at least top two, three?

See, basically our product goes in making of, both the products are, both the prime products go in making of inks, paints, polyamides, which are part of epoxy hardlers, and drilling fluids. So, I mean, everything is fairly equal ratio for all the market is there. So, I mean, that's not been any major concentration on a particular market or anything. Basically, our capacity utilization is going to be better because we are now finding that the selling of material is viable. Formally, it was because of Chinese competition, it was not viable. So, we were deliberately producing less and selling less.

Okay. And in terms of exports, so what industries we would be exporting to in terms of applications?

Same industries, same industries, same industries, same epoxy adnals and drilling fluids.

Okay, okay. And in terms of these mutacytical or the docoferals, where are we currently, what was our contribution from this product?

Right now, we are not doing much on that business. That plant is not being utilized right now because the vitamin market is not doing that great. So, we are not doing business currently. So, once demand leaves up, we will start that plant again.

Okay, okay. Thank you so much. Those are my questions. Wish you all the best.

Thank you. Next question is from the line of Amit from Robo Capital. Please go ahead.

Thank you. Sir, my first question is on the 40,000 new capacity. So, my understanding is that revenue from that will come after two years, right? It will start coming after two years. Yeah, correct. And what can be ballpark revenue? Any directional number on what can be revenue?

It's a high value, it's a fairly high value product. So, I mean, theoretically speaking, yes, 800,000 crores.

Right. And also, I think the margins will be better than our traditional. Much, much, much better. Yeah, it should be closer to 15-18% type of margins, right?

Yeah, I mean, the margins look at this stage and on the trend, we did the project and we have done the calculation, the margins look fairly robust.

Right, sir. And, I mean, there was some delay on this. I mean, we have not been tracking the company for last few quarters and have just joined back after a few quarters. So, there was some delay on this, right? And could you have thrown some light on the delay?

No, no, no. Yeah, basically, if you really see, our last two years have been bad years because of major changes. in the raw material prices, whereby the duties went up from 5.5% to SIS 27.5% on our raw materials and dumping happening on our finished products from China. So combined effect was that and so we were not going very aggressively on expansion by taking undue, I mean by taking debt. So now once things are stabilized, we have started doing it.

Right. So that, you know, the macro situation has now improved to your favor, I mean, to your advantage now? Has it become more neutral now? Is that what you're saying? Yes.

Yes.

Right. And it requires some product development, I think, if my memory serves me right.

That work has already been done. We have lab unit, we have pilot plant unit, and now we have the plant. Which we will be commissioning in Q2.

Right, and after that, we will then be in touch with customers to get the product approved, right? It probably has a longer cycle.

First step is to stabilize the plant. Second step is to validate our process. Third step is to send out samples for approvals. I mean, that's the reason we are saying that it's going to be two and a half years cycle.

Perfect, sir. That's it for my end. Thank you and all the rest.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star N1. The next question is from the line of Keshav Kirk from Counter Cyclical PMS. Please go ahead.

So, sir, just wanted a confirmation. You mentioned 16.5% custom duty is on United States for export from India.

No, no, no, no. That was on raw material import. Vegetable oil imports have 16.5% duty in India.

Okay, got it. And, sir, you mentioned 8% operating margin is something that we can expect for this financial year?

Yes. Yeah, this should continue.

Understood, sir. And, sir, what has to happen for our margins to increase to the erstwhile levels of, let's say, 11%? And I am not going to 16-17% that we did in 2020 to 2022. But what has to happen for our margins to at least go into double digits?

I mean, if things continue like this, volume growth happening, and devaluation happening on Rufid's side, and our energy saving initiative working, we can enter double digit.

Understood, sir. And, sir, exports, you mentioned in FY27 itself, we are expecting 20% of sales. Thank you very much.

Thank you. Next question is from the line of Deheral Shah from Philip Capitan. Please go ahead.

Yeah, good afternoon, sir. Thanks for the opportunity. Sir, what was the volume that we did in FY25? So this year we did 44,000 words. So in FS25 we did $54,000? Yes, $54,000. Yes, this year $44,000. Okay, and sir, as you mentioned, the Chinese dumping has started coming down or it has almost been negligible. So what was the Chinese dumping used to be earlier?

Chinese?

Dumping, sir, dumping.

I mean, no, basically they were selling at a lower price. Dimer.

Yes, exactly. So my point is that only. Sir, so what was the import that was coming from China?

Oh, it's around, it was coming around, equal to what we were selling in domestic market. Around 800 to 1000 tons per month.

Okay, and this is only for the one product, Daimaru, or there were also other products, you know, which we are dealing with, and there the China import was also there? No, this is the only product. Okay, and you mentioned MRFs contributed 140 crore to the total revenue in FY26.

Yes, yes, yes.

Okay, okay. And for my second question, as you mentioned export contribution to rise to 20%, so which geographies you are more focused towards?

US, Europe, Japan.

Okay, so even currently, the US, Europe, and Japan is contributing to the higher revenue. Okay, and sir, this 40,000 new product that you are talking about that you are going to commission in Q2, what are the effects that we have incurred for that?

Or, I mean, in the first phase, capex is around 20 or 25 crores what we have done.

So, this will add to the 40,000 term capacity or maybe much lesser?

No, no, no, no, it will be lesser. It will add up as the demand grows.

So, initially, we will start with lesser capacity as you are mentioning?

Yes, exactly, exactly, exactly.

So, this will be how much of them?

It will, I mean, it should be around 8,000 tons.

Okay, so maybe by, within the next two years, once we get our approval and customer, you know, side, we will be, you know, searching almost 40,000 tons capacity.

Okay, yeah. Because, I mean, overnight, you cannot expect to penetrate the market. I mean, there is no way you can dismantle the competitors. So, I mean, we expect that within five years, we'll be able to reach 40,000 utilization.

You mentioned, sir, five years.

Yes.

Okay. So, within maybe next five years, maybe 40,000 will be given, 800 to 1,000 gold revenue. Sir, in the paint side, since we have a larger user industry, particularly paint and paint, there are also new players which have emerged. So, are we also supplying to those players?

Yes, we are supplying to all. Including the... Okay.

Even JSW, sir?

JSW is in water-based paints. Which are different segments.

Okay, okay. And so lastly, on the working capital side, if I look at last two years, our inventory days have gone up, you know, maybe substantially. So is there any chance of improving our working capital cycle going ahead?

No, working capital is expected to remain at around between 100 to 120 days.

Okay, so inventory days could also remain at the higher level, because it used to be around 50-60 days, now it has gone to even 90-95 days, sir.

If the volume increases, it will, I mean, since the denominator will improve, it will improve a bit from the current level of 120 days.

Okay. Okay. Thank you so much.

Next question is from the line of Chirag from Badrani Finance Limited. Please go ahead.

Sir, I wanted to understand on this, you know, you said that the pressure from the Chinese import has come down. Sir, have you been able to figure out why has it happened so?

No, it's not possible, but overall, Chinese companies in all, practically all the products have reduced, I mean, something has happened whereby, I mean, all the products what they were dumping is somehow going down.

So, has there been any export restriction on their dumping been put there? Any idea, sir?

No, no, no. But quite a few products, whatever the export... Incentives Chinese government was giving has been removed, which was as high as 15%

in lots of cases.

I mean, so, I mean, obviously, it's because of that only the Chinese would have done, and they were selling at a price which was, I mean, too low for, I mean, so they must be making losses.

Okay. And, sir, when we supply, you know, most of, we supply to... All the paint, so we don't have a restriction to supply the material to any paint company, right? We are not bound by that. No, no, no. Okay, and sir, the last thing is, sir, what is the capex for 27 and 28?

This year, there won't be any capex except for anything related to energy saving.

Okay, and that would be how much, sir?

No, I mean, that is whenever the things come up, because we have just finished one energy audit, second energy audit is happening. If the payback is less than four years, we will go for it.

Okay. And for 28, what will be the number?

I mean, that is, everything depends on 28 for what happens to our new product. If that picks up, we will go for investment. Otherwise, not.

Okay.

Current business doesn't require any CapEx.

Right. So now we are just focused on improving the top line, right?

Yes, exactly.

Okay, sir. Okay, thank you.

Thank you. Next question is from the line of Keshavgar from Counter-Cyclical PMS. Please go ahead.

Sir, so I am trying to understand that when we did our peak revenue in let's say FY23 of roughly 650 crore, so sir, that time what was the sales volume that we did roughly?

54,000.

No, sir, 54 was for FY25, or for FY23 also it was 54,000 only?

So which year you are asking?

Sir, I am asking for FY23 when we did peak revenue of

54,023.

Okay, so it was, so basically our volume was flat at around 54,000 for, till FY25, and only last year it fell to 44,000.

Yes. No, in between FI24, it has gone up to 63,000 also.

Okay, 63,000. Okay, sir, but it doesn't reflect in the revenue number, so I'm assuming the prices must have gone down, and that is why despite the revenue going up, despite the volumes having gone up in FI24, the revenue has actually come down, year on year. Yes, yes, yes. Now, sir, what I'm trying to understand is that since you mentioned that Chinese government must be giving them some incentives, that's why they were selling at the price, which apparently looks as a loss-making crisis. But now that the dumping has stopped and prices have gone up by 8-10%, so don't you think that now, basically, even if that export incentive from 15%, we don't know if it has become zero or maybe something like 5% or something in that vicinity. So the point is that can't that dumping restart? Because after all, they must be having capacity. So now where is that capacity going?

I mean, maybe the sense would have prevailed that it doesn't make any sense to lose money. I mean, that is all possibility. And, I mean, Chinese government can reintroduce that 15% incentive. I mean, that is not in our head. But, I mean, I don't think so. I mean, for two years they played that game. I don't think they'll be able to do more. And that's also including this current geopolitical situation.

Yes, sir, I'm absolutely with you on this matter, but my only point is that now that prices themselves have bounced back, so now even without additional Chinese government support, can't the Chinese exporters, in light of the increased prices, can't they restart, like, dumping at the current prices?

That's not a problem. That's not a problem for us, because at this price, we are happy.

Understood, sir. And, sir, now the thing is that whatever refinery by-product we require, can't we import that by-product from other geographies?

No, historically, because of the freight component, these by-products, they historically nowhere in the world are being traded, exported. This is normally used wherever it's generated. It is consumed domestically only.

Sir, and what is the pricing arrangement that we have with the refineries for their by-products, which is our raw material cost?

It's, I mean, it's a buy-sell. Basically, it's driven by market. It's a commodity.

Okay, so is it like monthly revision or quarterly?

Daily revision. Daily revision. They don't enter in any long-term contracts. It's just like a commodity.

So, now, if, let's say, these seed oil prices come down, then the raw material prices will also come down?

Yes.

Okay, understood, sir. And, sir, what about the end product prices that we have with our customers, like, let's say, paint industry and so on? Is it a monthly?

It's a buy-sell again. Maximum, it's one month.

Okay, understood, sir.

I'm sorry to interrupt. I'm sorry to interrupt, Kesha. Please rejoin the queue for more questions. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Ketan R. Cheda, an individual investor. Please go ahead.

Hi, thanks for the follow-up. Sir, correct me if I'm wrong, I heard that we also import some raw materials. Is that correct?

No. We have an option, but right now we don't import.

Right now we are not importing.

We are not importing. Yeah, yeah, against export we can import, but we are not importing because, I mean, it's not viable compared to the material what we are getting domestically.

Right, right. So I think this was in conversation with one of the earlier participants where he was mentioning that the devaluation of rupee, we should actually be benefited because then we earn more in INR terms when we export. And I thought you said that because we also import so that benefit is not there.

No, no, no, no. I didn't say import. I said raw material. My words were raw material, not imports.

Raw material we buy domestically only, right? If the INR is getting more devalued, we are not benefited so much. Is that understanding correct or no?

Obviously, we are getting to the extent of 100% of devaluation. Partially, we will be getting benefited. In our exports.

Yeah, but in a way, our raw material will also increase since the food.

I mean, devaluation is, I mean, in both ways, no? India imports vegetable oil. So the price of vegetable oil to that extent is going to increase. To that extent, our byproducts, our raw material costs would go up. Not for us, for any company.

Okay, understood, understood. Sure. Thank you so much. Thank you.

Ladies and gentlemen, we will take this as the last question. I now hand the conference over to the management from Falcom Organics Limited for closing comments.

Yeah, thank you very much for attending the conference. We'll meet in the next quarter. Thank you.

Thank you.

Thank you very much. On behalf of Fairtime Organics Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.