Fairchem Organics Limited (FAIRCHEMOR) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q1FI 2027 conference call of Fairchem Organics Limited, hosted by Valoram Advisors. 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 than zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Purvangi Jain from Valoram Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a warm welcome to you all. My name is Bhurangi Jain from Valoram 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 first quarter of the financial year, 2027. 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 Sarivala, 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 to you, sir.

Thanks, and good afternoon, everyone. Welcome to the earning call for Q1FY2E7. For the quarter under review, the revenue from operations was at 176 crore, reflecting a 34.4% year-on-year increase compared to the corresponding quarter last year. EBITDA for the quarter was 18 crores, with a EBITDA margin of 10.1%. The net profit for the quarter was rupees 10 crores. We have processed 12,400 tons of raw materials and have sold 13,500 tons during the quarter. Happy to... To answer any queries. With this, I'll hand over the call to our Managing Director, Mr. Navicariwana.

Thank you, Bhavis. Good evening, everyone. As we begin FY27, I want to share our operational perspective on quarter and the road ahead. The quarter has started on a strong note. Our revenues from operations have grown. Basically, they have been driven primarily by higher price realization on account of elevated raw material costs as well as lower imports amid ongoing supply chain constraints. I am pleased to note that our EBITDA margins have also further improved to more than 10% during the quarter, supported by better realization in domestic market as import pressure continues to ease. On the external environment, while we remain watchful of the evolving macroeconomic situation, including the uncertainty arising of the ongoing Middle East crisis, we continue to be consciously optimistic about the trajectory ahead. The recently concluded India-UK free trade agreement and the expected implementation of India-EU free trade agreement favorable, tariff developments with U.S. and recent depreciation of Indian rupee are expected to strengthen our export competitiveness and support improved capacity utilization over the course of the year. 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 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. It's from the line of Shlok Patel from Zenflow Research. Please go ahead.

Thanks for the opportunity. Just a couple of questions. Can you share the revenue mix for Q1 and Part 27?

Am I already there?

Yes, the revenue was 176 crore, of which around 30% was dimer acid, 42% was linoleic acid, isostatic acid was 4%, and 24% is other by-products.

Okay, and can we expect similar revenue and margin trend rate for the rest of the three quarters?

Looking at the current situation, we feel we'll be able to maintain.

Yeah, and just about the isotropic acid ramp-up, how are we expecting the ramp-up for isotropic acid for next one to two years?

I mean, in the next one to two years, we'll reach more than 80% capacity utilization.

Yeah, okay.

That's it from my side. This is from the line of Shivam Gupta from Tri Netra Asset Managers. Please go ahead.

Beyond raw material prices, are there any such initiatives underway that can further standard your cost advantage over global peers?

Last year we had undertaken major energy conservation exercise, whereby we have been able to reduce our power consumption by more than 30% and our solid fuel consumption also by more than 35%. So that is one major exercise we have undertaken. We continuously do time and motion study so that no excess manpower is added. Created in the organization, and at the same time, now we have started working on the catalyst and the consumables, what we have been using, trying to stabilize our work with different types of catalysts, whereby the consumption and the value both goes down.

Okay, sir. My second question is, as global customers are increasing due to diversify their supply chains, are you witnessing any meaningful increase in enquiry for customers seeking alternative to existing supplies?

Yes, in fairly large numbers.

Can you tell me numbers?

That's around seven to eight big customers.

And that's it for myself.

Thank you.

Thank you. The next question is from the line of Satchel Kapoor from Anti-Fragile Thinking. Please go ahead.

Yeah, thank you for taking my questions. Sir, I would like to start with our gross margins. If you look at the business over the last five years, our gross margins were low to begin with, and they have only gone lower from that reference point. Which kind of means that the product innovation and R&D has had almost no impact, or maybe we are not interested in innovating and moving up the value chain, because that should have reflected in the gross margins.

It's not the case, because we introduced isosteric acid. We are the third company in the world making isosteric acid, and we have followed the green route. So that is one thing. Secondly, we have commissioned the bypass fat plant also. Again, there are very few companies making bypass fat. So it's not that we are not doing innovation. Basic problem has been, we have been always explaining that the duty structure on the raw material what we buy is 22.5% and the finished product carries 7.5% duty. That is the basic reason.

And in the presentation, we are saying that we have got 13 technical or scientific resources, one PhD. How much revenue, on a recurring basis, do we invest in R&D every year? Is it 1%, 2% of sales, that kind of a number?

It's around 50 lakhs is only spent on the revenue side. So, the salary and the capital expenditure is on need-based basis.

So, it is 1.5% as of now.

One, one and a half percent as of now, right? I think we should quote that number in the annual report because I was looking at the latest annual report. I couldn't find the number clearly. Maybe something we can take as a feedback and implement from next year because this year's annual report is already up.

R&D expenses already mentioned. If you can just check the annual report, we'll just let you know the page.

Yeah, I checked. It's showing blank. So, both capital and recurring is showing blank. I had a look.

We'll just get that to you on this.

Sure, sure, sure. No problem. And finally, what percentage of current revenues are coming from products that did not exist three years ago or four years ago? And where do you expect the product mix to shift over the next three to four years?

Basically, with the introduction of isosteric acid, we intend to increase the utilization of dimer fatty acid plant, which in turn will increase the oral utilization of plant capacity. That has been the isosteric acid we introduced two years back, and basically as it is going in cosmetics, plus there are entry barriers, which has taken a little bit longer for us to get the approvals from the buyers.

Right, and do we expect to introduce more products that kind of fit our philosophy of base to wealth over the next year?

Next quarter, we'll be introducing one new raw material. Again, for the first time, we'll be manufacturing that particular product. And it also falls in oleochemical sector only, which is the process that's been developed by our in-house R&D lab.

Sure. And in terms of the cycle, innovation cycle from concept to commercial, what is the kind of delay? Does it take three years, five years, seven years?

R&D is something which takes pretty long and in which our time span is not fixed. Then we go for pilot plant, then we go for one small plant, and then we go for the larger plant. Basically, none of these technologies are available of the self. All these technologies are to be self-developed. So, rather than taking any undue risk, we try to move slowly.

So in terms of the competitive advantage in manufacturing, isn't the manufacturing know-how rather than the patent? Because I don't think the file patent. Many chemical companies both file patent. No, it's manufacturing know-how. Yeah, but we tend from filing patents, so I know Clean Science is an example. It's a very different organization, but they also don't file any patents.

Patents are very difficult to defend. I mean, we are the preferred choice to our customer. That is what we prefer.

Sure, sure, sure. Understood. Thank you so much for answering all my questions. Thank you.

Thank you. The next question is from the line of Preach Giant from NeverShare. Please go ahead. Sorry to interrupt. Mr. Priest, may we request you use a microphone to ask a question? Shabir, we are not able to hear you well.

Yeah, please go ahead. Basically, I want to know that who are our Dimer Acid customers or is there any Dimer Acid, how is the competitive environment scenario ramping up and I want to know basically on the market side what, basically. In terms of tonnage, how big is our market of dimmer acid?

So, this is certain information we would like to share. That is the name of our customer and what is the quantity we are selling. So, it won't be possible for me to share those information.

Okay, and I also want to ask that, is there any alternative to the raw material we are using, like we are using the feed oil from Mariko or other players, is there any alternative of the raw material for our dimer acid?

Basically, diver acid is made from vegetable oil sources, and we are utilizing vegetable oil sources only. The second option is to follow mutton-tallow route, which is something which we are not doing.

Okay, and also on the new product which we are coming on, which will be commissioned from Q2, the product which is used in EV battery side, how is the ramp-up of that product expected?

We are not going to manufacture anything for EV battery. We have never said that.

Okay.

There might be some confusion at your end.

Okay. The new capacity which is coming from Q2 of 40,000 meters ton, it is of dimer acid and that another product?

Other product. No, it's a other product. It's in the family of oleocampton.

Okay, okay. And how is the ramp-up of that product expected?

We are going to start the trial run. So once that is stabilized, then we'll ramp up the capacity.

And margins of that plant will be same as our current?

Better than current. Should be better.

Okay, okay. Got it.

Thank you. The next question is from the line of Chirag Vekaria from Budrani Finance. Please go ahead.

Sir, in your EPT page 14 you have written the revenue has improved because of higher price realization due to high raw material cost. Sir, does that mean that higher raw material cost you were able to pass on to the consumer?

Yes, yes, sure.

Incrementally, earlier you used to mention that it was tough to pass on. So, how come it is possible now?

There was a geopolitical supply chain issues because of Middle East crisis, and we have seen that the imports have also reduced. So that's the reason we could pass on the price increase.

So, sir, if things were to, say, this supply chain constraint that you have mentioned, if those were to ease, again the same problem would...

Basically, there was dumping happening from China, which has gone down. And if dumping starts again, we cannot do anything about it.

So, sir, second question was that in terms of margin, which you posted around 10% this time, that is again dependent on the fact that the import does not come in and use it.

Obviously, in any chemical sector, if China starts dumping it, I mean, why do the companies go for anti-dumping duties? Or, I mean, if dumping is happening, then no one can do anything about it.

Thank you. The next question is from the line of Madhur Rati from Countercyclic Investment. Please go ahead.

Thank you for the opportunity. For 40, I wanted to understand that this 30% volume growth that we have shown quarter on quarter, is this sustainable? And for what percentage of our products are direct crude substitutes in our major teams industry to help us understand?

So, the linoleic acid, which is 40% of our volume, that goes into the paint industry.

And sir, this is a direct crude substitute. So either they use linoleic acid or they use some kind of crude substitute. Is that correct?

Yes, yes, yes.

Sir, so do we see a scenario where a major portion of our volume is going away whenever crude comes down?

Not that crude, it's crude vegetable oil.

Okay, crude vegetable oil.

So, the crude vegetable will reduce, higher costs will also reduce. Got it.

And, sir, this pricing improvement that you've seen, sir, do we expect this to sustain going forward? And has there been a meaningful impact on the Chinese anti-invaluation on our business?

Yes, Chinese dumping has gone down. Devaluation has happened. So, I mean, all these things, combined effect, the margins have improved.

Got it. Now, sir, coming up to our investor, we have mentioned that we are in some product upgradation of linoleic acid, oil, steel, drilling. So, is this a product that is widely used, or this is something that's very application-specific

product, like one of the largest here, Oleon, where

they have specific products or specific applications? It's a combination of both.

It's a combination of both.

So, have customer trials begun for this product?

Yes, we are trying.

Okay, and now... Sir, if you could help us understand what would be the realisation by people we would get worse as a normal normal asset and what kind of...

Obviously, it will be better than anything when you make a special product, a tailor-made product. Obviously, your price of realisation goes up.

Right, sir, but if you could help us understand the magnitude of the...

No, it's something once we actually enter in contract, we will be able to realise.

Okay, got it. Sir, just finally, one question from mine.

Sir, how do you see the business growing more than two to three years?

Are we planning to move into more like oleon and finding organics where we are manufacturing application-specific products, or we would like to make products that are difficult to manufacture by someone else?

Difficult to manufacture. Difficult to manufacture.

Okay. Anchor, the OU chemical that you mentioned, in what industry does it do exactly the 40,000 medication that you've assigned for?

Come again, we were not able to hear you on.

Sir, the OU chemical daddy mentioned that we were saying the 40,000

metric ton of capacity for, in what product are you expecting?

At this stage, we won't divulge. Before also, I think you have, last time also you did ask this question, if my memory is right. Yes, I said no. I won't be able to answer that.

Thank you so much for being here.

Thank you.

Before we take the next question, we would like to remind participants to ask a question. The next question is from the line of Ashish Ufganlavar from InvesQPMS. Please go ahead.

Yeah, sir, thank you for this opportunity. So, I've been following your company for last five years, and this is, I think, the first time that we've seen things improve, because I think the last time when we expanded capacity, things went south because of dumping. So, sir, questions would be like, you mentioned that two factors. One is there is an inverted duty structure because of which margins are impacted, and secondly, the dumping that was happening. So, is it possible to segregate how much of the margins have been sacrificed because of each of these? Because I think inverted duty would be...

Yeah, the finished product is charged at 7.5% and the raw material is charged at 16.5%. So differential 9% is the margin getting lost in this whole process.

So when did this come into effect, sir, this inverter to discharge?

This came in 2014 with it at 27.5%, then it got reduced to 16.5%.

So is there any chance of this getting corrected? Any representations that you will see in Openland or...?

How can this something which... we are too small fry to... all these things.

Because it is, I mean, mainly used for... I mean, we are having a by-product of...

I mean, we are too small fry to understand this beauty thing.

Sagnis, you mentioned that the dumping has reduced. Is it because the imports were not able to come in because of this war is forced up?

Basically, I think they might have realized that too much of dumping is happening. So, maybe, or maybe...

So, some incentives being reduced in China or something?

Yeah, or maybe the export incentive what they were getting might have come down. Something, something would have happened because we see the same thing in lots of products.

Okay. So, I'm just trying to understand whether this is a sustainable thing, gain for us, or is it not?

I mean, it will be something which is happening in China. See, what type of thought process is going on there. So, I might say that, yes, this is sustainable, and it might not, and it might remain sustainable also. I mean, that's something, I mean, this is a business risk. So, that is one of the reasons we are not doing any crazy expansion or we are not taking any debt or anything. Whenever the things were good also, we were not doing that.

Okay. On the isosteric acid... Sorry to interrupt.

Mr. Ashish, may we request you to turn to the question queue for a follow-up question?

Okay. Thank you.

Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Maitri Shah from Sapphire Capital. Please go ahead.

Yeah, hello. Good afternoon. Am I on the list? Yeah, hello. So, if you could mention what sort of volumes that we sell in 1Q FY26, I just wanted to gauge the IOI volume growth that we had for this year.

So, in Q1 FY26, we sold 13,000 tons.

So, most of our growth this quarter has led to the realization, I'm assuming, and you mentioned that two things helped. One is the China dumping kind of gone down, and the second is because of the supply constraints happening, so we were able to pass on the cost. Just assuming that the supply constraints kind of lift up and now there's a normal supply happening, but the China dumping kind of stays stagnant, what sort of revenue growth are we targeting for the rest of the year?

Obviously, the first thing we'll target is increasing capacity utilization. Minimum 10 to 20 percent, we intend to increase the capacity utilization. By the end of the fourth quarter, we have increased it by around 20 percent. So that's our game plan, that is our strategy, we are working on that. I mean, obviously, the geopolitical situation is going to play a big part in this.

Got it. And the reason for lower volume growth in this quarter, can we base this off of lower imports happening in the country, or have we found any sources domestically to kind of get the raw materials?

We are a 100% domestic raw material company. We don't import any of our raw materials.

Okay, but the duty is on the raw materials from where we are sourcing, hence the cross margin. Got it. And on the esoteric side, what sort of contribution we had in this court, and how do you plan to scale it up over the next two years since it has a better epitome?

Is it an esoteric acid is going in cosmetics and where the entry barriers are very stringent? I mean, it is taking a little bit longer and longer than what we expected, because there are just three manufacturers in the world, and there are very few buyers of this particular product. We are trying to enter, but it is taking its own time. The breakthrough, whenever if one or so buyer comes in a big way, suddenly you will see a major surge in the quantity. So we are desperately working on it, but it is going to take its own time.

Got it. And lastly, on the... Sorry to interrupt.

Misha, may we request you to return to the question queue for a follow-up?

Yeah.

Thank you. Before we take the next question, we would like to remind participants that you may press Char in 1 to ask a question. The next question is from the line of Rohan Joshi, an individual investor. Please go ahead.

Hi, sir. Am I audible? Yes, you have. What are the capacity utilization rates in this quarter, and what guidance can you give on the utilization rate for this FI27?

We are at close to around 60% as of now, and we'll exit the year at around 70% to 75%.

So, my second question was on the exports front. So, like, what is the current revenue contribution from the exports that we're getting right now? Like, what products will be the key to achieving the

company's export guidance that we've given? DIMER and ISO steering.

Currently, it is houring between 7% to 8%. Okay, sir.

If I go on the domestic side, like what promotion of revenue comes currently from the paint industry? Like, is the company dependent on the paint industry significantly?

40%. 40%. 40%. 40%. Okay, sir.

So, can we expect the current growth outlook for the paint industry as well? Like, what is the company's plan to reduce the dependence over time? Because I said that we have 40% of the revenue comes from there.

So, we don't intend to reduce our...

At overall capacity utilization, we want to increase the overall capacity. So, I think we don't have any issue with the proportion in paint industry.

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

Thank you. The next question is from the line of Madhurati from Countercyclic Investment. Please go ahead.

Sir, thank you for the opportunity. One second. Sir, just to clarify, this 70 to 75% utilization, this is under 80,000 meters

in capacity that we are at the meeting currently. Yes, yes, it is also done.

And any additional would be once the 40,000 starts?

Okay, yes.

Oh, got it. And, sir, so, I think theory is actually rampant, sir. How, because we are expecting the plant to be 80% utilized in the next four years, but we are also seeing a longer gestation period from the end consumer, sir. So, how should we realistically look at this product for fair cream organization?

I am also saying acid is manufactured from one of the co-products of dimer fatty acid. So, it has no bearing on whether I sell isosteric acid or not. Isosteric acid is a part of forward integration. So, it gives me extra value, extra price realization on our byproduct stream. That's all. So, it has no bearing whether I'm able to sell higher quantity or lower quantity of isosteric acid. It has no bearing on overall capacity utilization.

Sir, so where does this monobasic acid is used apart from acid, curic acid, where is it used originally? Okay, pale. Got it. Sir, okay, got it. Sir, that was someone, thank you, sir.

Next question is from the line of Pragyam Ladha from Omni Management LLP. Please go ahead.

Thank you for the opportunity, sir. All my questions have been answered.

Just one question. Sir, in percentage terms, if you could guide, how have the realizations improved from Q4 of FY26 till now, and also from Q1 of FY26?

The realization from Q4 has gone up by around 25%, and from Q1, it has gone up by 30%.

By 30%. And we see this sustainable for as long as this West Asia crisis is going on, right?

Question is from the line of Shivampareg from ValueWise Wealth Management. Please go ahead.

Two quarters back in the conference call, you had mentioned that we were not willing to select the prices in which one of the domestic competitors was selling dimer acid and linoleic acid. So, currently, as of today, so due to better price realization, are you comfortable now in selling at a max utilization capacity and due to better price realization... So, around two, three quarters back. And, sir, you had mentioned that you were deliberately slowing down on sales, like... Okay, so as of the current scenario, as the price realizations are better, so you are willing to ramp up at our max capacity. Is my assumption, correct?

So, first step is to reach 100% capacity utilization, then we will ramp up the capacity. Okay.

And, sir, with the new 40,000 capacity. Sorry to interrupt.

Mr. Shivam, may we request you to return to the question queue for a follow-up?

Okay, sure.

Thank you. The next question is from the line of Ashish Upgan-Labar from InvesQ PMS. Please go ahead.

Hello. Hello. Yeah. So, isosteric acid still would be a very small portion of our sales, right? I mean, we just started on that, is it?

Yeah, 4% in this quarter.

Okay. So, whatever results have come this quarter, it is purely to do with things improving on bamer and linoleic and other assets. Yeah, that is correct. Okay. So any guidance or maybe clear picture that you can share with us because you would have had a big approval cycle as far as I suppose it is concerned?

Every quarter we get some query or some information that will take some more time for analysis. So it is, I mean, obviously as a company, we are desperately following up. Our marketing is breathing down everyone's neck, but beyond the point, we cannot do. See, the beauty is that... Only third manufacturer in the world, so it also would have its own entry barriers, because the products are used in your cosmetics in Europe and Japan, which are very, very, very strict companies to deal with. So that is taking your own time. But once you enter, it's a long-term association with them. So that's fine with us. We don't mind.

Yeah. So, sir, what I was trying to understand is, given the challenges that we have had with the base business all these years, so, this would be a good forward integration for us to look for a change of course in the business overall. Is that the thought process if these problems sustain?

It increases our sustainability.

Right. Because you've always had a good balance sheet. The problem has been on the numping and other things that have come. Yeah. Sure, sir. Okay. Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press Charanvan to ask a question. The next question is from the line of Rohit from iThoughtPMS. Please go ahead. Sorry to interrupt. Mr. Rohit, we are not able to hear you well. Could you please use your microphone to ask a question?

Is it better now?

Yeah, please go ahead with your question.

Yeah, sir. Most of the questions have been answered, sir. This is on this iso-esthetic effort. So, I know that it's a long gestation period. So, in terms of if I have to push you to... In terms of, let's say, there are five steps to get to the final process and start supplying commercially, where are we now in terms

of, let's say, at a couple of companies, we have finished all five steps. At a couple of companies, we are at the fourth step. But, I mean, everywhere we have crossed third step.

Okay. So, is it fair to say that, let's say, by the end of this financial year, there would be some positive outcome? Right. And if you can share some bits about the team that you're doing this via the green industry and you're only the third player, so in terms of your cost advantage or maybe in terms of your pricing benefit that you can, maybe some, what gives you the edge versus the, I mean, what is your pitch to the existing customers that why should they try you? Whatever you can share. I know these are confidential things, so whatever you can share.

It's better. I mean, let the results speak.

No, no, of course, sir. I mean, no, no, I understand. But I'm saying, is the booth different, or is it the fact that something else is unique in the process that you follow? No, our process is different.

Our process is different. It's a complete integrated plan. Yeah, we are following green process. That is our...

USP. USP.

And that is the reason it is taking a little bit longer for everyone to undertake stability tests.

Sorry to interrupt, Mr. Rohit. May we request you to return to the question queue for a follow-up question? The next question is from the line of Ajay Surya from Niveshay. Please go ahead.

Thank you for the opportunity. Am I audible? Yes, you are. Oh, sir, sir, I just wanted to understand from you, sir, because in the past we have faced issues of, like, dumping from China, and recently because of this war, geopolitical tensions, everything, things have changed in our favor. So, sir, I wanted to understand, like, from... Our interaction with customers, are they now willing to enter into any long-term contract, or are they still preferring to, like, maybe go...

I wouldn't like to enter in any long-term contract. With so much volatility, it would be hara-kiri for me.

But, sir, on volumes, maybe, we can get into... Like, so any long-term contracts with the customers, like, pricing can be a moving part, but then on volume,

I mean, no company would like to have, whereby they'll commit on quantity, but they won't commit on the price.

Okay, okay. Answer, like, wanted to understand, on the current imports, trend, like, what are we witnessing? As of now, in the current scenario, like, are we seeing imports coming in or, like, any quantum of data, if you can provide any...

Quantities are going down, crises are going down.

Okay, okay.

Thank you. The next question is from the line of Jasmine Surana from VT Capital. Please go ahead.

Good afternoon, sir. Sorry for making you repeat this.

Since that you were given, could you please repeat that?

I think we are not able to hear you.

Good evening, sir. My question, actually, you had mentioned something about the 20% growth. I missed out on that part, so could you please repeat it? Sorry for making you repeat it.

No, every quarter we intend to grow by 5 to 7%. So, at the end of the last quarter, we would have grown by 15 to 20%.

Okay, and this is on the top thing?

Yes, this is on the quantity. Prices. Basically, we talk about quantity. Okay, great. Thank you, sir.

Thank you. The next question is from the line of Rohit from iThoughtPMS. Please go ahead.

Yes, sir. Hi. Thanks for the follow-up. So, just one more question was, so you mentioned that you want to increase capacity utilization by around 10 to 15 percentage points from where it is today. So, and you also mentioned to an earlier question that... The margins will sustain. So, are there no benefits of operating leverage, or do you expect things to sort of, some pricing pressure, etc., to come back?

No, no, no, not that. But basically, I mean, I cannot say, I mean, I would love to work at 100% capacity utilization.

So, we would like to increase our sales volume, because that's more sustainable, and we are okay with the current margin levels. Thank you, Rohit.

Thank you. Ladies and gentlemen, we will take that as the last question of the day, and I now hand the conference over to the management for closing comments.

Thank you, all the participants in this earning call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR managers at Velodom Advisors.

Thank you. On behalf of Fairchem Organics, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.