IOL Chemicals and Pharmaceuticals Limited (IOLCP) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to IOL Chemicals and Pharmaceuticals Ltd. Q1FY27 earnings conference call. As a reminder, all participant clients will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Pradhi Amre from MUFG Investor Relations. Thank you, and over to you, ma'am.

Thank you, OODA. Good afternoon, everyone, and welcome to IOL Chemicals and Pharmaceuticals Ltd. Q1 FY27 Earnings Conference Call. Today, on the call, we have Mr. Padip Kumar Khanna, Chief Financial Officer, Mr. Abhira Singh, Senior Vice President and Company Secretary, Mr. Kushal Kumar Rana, Director Works, And Mr. Rakesh Mahajan, Finance Advisor and Strategic Head, to provide insights on the company's operational and financial performance. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon our beliefs and expectations as of today. The statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I would like to hand over the call to Abel, sir, for his opening remarks. Over to you, sir. Thank you.

Thank you so much, Prashiv, for introduction. Good afternoon, everyone, and welcome to the Q1FY27 earnings call of IOL Chemicals and Pharmaceuticals Limited. Thank you for joining us today and for your continued trust and support. I hope you have had an opportunity to review our financial results and investor presentations filed with the stock exchanges and also available on our websites. We have started FY27 on a strong note with healthy demand across key products, improved capacity utilization, favorable products mix, and continued focus on operational efficiency. In pharmaceutical division, we continue to make good progress in diversifying our API portfolio beyond ibuprofen, with healthy demand across key products including paracetamol, centafrazole, madformin, senofibrate, and clopidogrel, etc. Non-Io products continue contributed 43% of pharmaceutical revenue in Q1 FY27, compared with 36% in Q1 FY26, with revenue growing 67% year-on-year basis and emerging as a key driver of growth in our pharma business. Importantly, this performance also demonstrates the benefits of the initiatives that we have taken over this past few quarters to strengthen our manufacturing platform and diversifying our KPI product portfolio. While ibuprofen remains an important part of our portfolio, our strategic focus is increasingly on building IOL as a diversified and integrated API platform with multiple products contributing to our growth. Our international business also strengthened during the quarter, with exports increasing to about 28.5% of revenue, while the NMVA approval for Cloppy Dogrel in China further expands our regulatory reach and market opportunities. This progress is particularly encouraging against the backdrop of continued geopolitical uncertainty, supply chain challenges, and inflationary pressure across slack raw materials. Our chemical business also delivered a strong performance during the quarter, supported by improved realizations, efficient raw material procurement, higher Exports and operational efficiency, capacities enhancement across key products lines further strengthen our integrated manufacturing platform and provide us with greater flexibility to cater to demand across key and use industries. Going forward, our focus remains on scaling our API portfolio, improving capacity utilization, expanding our presence in international regulated markets, and driving operational efficiencies through our integrated and backward-integrated manufacturing platform. Our objective is not merely to add capacity, but to build meaningful and successful Sustainable positions across a diversified KPI portfolio. The manufacturing capabilities, process, expertise, and background integration that we have developed over the years provide us with a strong foundation to scale these businesses. With that, I would now request Mr. Pradeep Khandar, CFO, to take you through the financial performance for Q1 FY27.

Good afternoon, everyone. I will now take you through the financial performance of the company. For that, you are not friends. During quarter 1 of financial year 27, the company reported revenue from operation rupees 756 CR as compared to 551 growth in quarter 1 of financial year 26, resisting a year-on-year growth of 37 percentage. On the operating front, Abitta stood at 111 crores compared with 69.5 crores in quarter 1 of financial year 26, representing a growth of 60.7%. A vita margin improved to 14.6% compared with 12.4% in the correspondence quarter. Coming to the bottom line, pads stood at 64. 3.5 crores compared with 34 crores in quarter 1 of corresponding year. Resisting a growth of 89.9 percentage, stat margin consequently improved to 8.4 percentage compared with 6.1 percentage in quarter 1 of financial year 26. The improvement in profitability reflects the benefits of higher operating leverage, better capacity utilization, improved product mix, and continued focus on operational efficiency. Our support contribution also increased to 28.5% of revenue. Compared with 24.4% in same water also. Last French area, reflecting the continuous strength of our international business. From a segment perspective, both pharmaceutical and chemical contributed to overall performance, supported by healthy demand, improved utilization, and operational efficiency. Going forward, our focus will remain on sustaining the growth momentum. Through better prestidiarization, continued improvement in product mix, operating efficiencies, and prudent cost management. At the same time, we will continue to maintain a disciplined approach towards capital allocation and investment with a focus on projects offering attractive long-term returns. Thank you. Financial year 27, we remain confident of delivering 15-20% revenue growth with an EBITDA margin in the range of 14-15% and export contributing approximately 25-30% of the revenue. With this, we now open the floor for questions and answers. 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abu Rafay from Wealth Catalyst. Please proceed.

Thank you for giving me the opportunity. I just have two questions. My first question is, given that paracetamol has seen a relatively weak demand over the past few years, what is the current outlook for paracetamol, sir?

The Paracetamol for the IOL, we started around two years back, 3600 MTPA capacity, which we tripled, in fact, last year. And this was 10,800 MTPA. And this year, as of now, we are operating around 55% of this enhanced capacity utilization, which we expect by the end of this financial year, we will be reaching to around 70%. And if you see, this parasita mold is contributing significantly in our non-Igu products portfolio. So, the demand is growing, and IOL is also getting its position into the Paracetamol business verticals across the India. Also, we are getting traction in the exports. So, we are foreseeing good demand in the Paracetamol.

Alright, so my next question is, given the sharp price in ethyl acetate and acetic unhydrate prices following the U.S.-Iran war, could you please update on the current pricing environments of both these products?

Due to war, the prices were increased substantially in the month of March itself, but after that, it is stable to some extent, and now the prices are, you can say, not on the overturn from the last one month. So, we think that ultimately the prices of ethyl acetate and the delta between ramadriel and ethyl acetate will remain constant in the upcoming quarters.

Thank you, sir. Thank you very much.

Thank you. The next question is from the line of Pahel Sharma from DD Capital.

Please proceed.

Hello. Hi, sir. Thanks for the opportunity. Hello.

Yes.

Yeah. So, sir, my first question is that export contribution increased to around like 28.5% of revenue for like some 24.4%. Why, why? So, like, do you see this moving towards 30% plus of revenue in the terms, like in the near terms, or would you prefer to maintain a more balanced domestic export mix?

So, I think we are targeting this year around 25 to 30% range of the export revenue. And we are hopeful that we will be achieving it.

Hello, Phan.

Hello. Yeah, yeah, sir.

You heard it?

Yes, sir. Yeah, sir. And my next question is that, like, with Q1 amid the margin at 14.6%, like, ahead of the S527 guidance range of 14 to 15%. So, what are the key factors that could either sustain the margin above this range or lead to moderation in the coming quarter?

We have achieved the EBITDA margin 14.6% in this quarter, and the key factor for this rise in EBITDA margin are higher capacity utilization, better product mix, operational efficiency, and also stronger non-IBU segment API demand. Also, some improvements in the finished product horizon. So, these all factors are contributed in the beta margin.

Okay, sir. Okay, sir. Understood, sir. Thank you so much, and all the best, sir.

Thank you. The next question is from the line of Vignesh from Sequence Scientific Limited. Please proceed.

Hello, sir. Thank you for the opportunity. So, my question firstly is regarding the pharma, if I see in quarter 1, FI27, there is around 42% growth if I have to compare, 37%, 42% growth if I have to compare YOY. So, can I get the split of what percentage of this growth is due to volume growth and what is the percentage which is due to realization?

We can't say exact numbers, but as you can say calculation, the majority number contributed by the increase in the volume of our pharma product as compared to final finish prices. The capacity utilization of APIs products have been increased including non-IBU segment also.

Okay.

Got it, got it, got it. So, we don't have the exact number, right? We have

the number, but it is not a, we are not,

so basically, We need to understand the sort of capacity utilization of all our assets is currently operating. So apart from Parasita mold, most of the assets are operating around 80 to 95 percent capacity utilization. And I think that is the more important factor that is contributing towards the operational performance of the pharma sector. Rather than going into the what sort of the prices and what sort of the this is happening because of the capacity utilization, what is the mix. So I think we do not share that detailed information over the call. So I think we will not be able to share it. But as a broadly, if you can take it, this is mostly on the capacity utilization and better operational efficiency. Okay, sir. Okay, sir. Got it, sir. And also, this is coupled with the increased export realization during this quarter.

And would it be correct to say that the mix towards the regulated market has gone up in this quarter, I mean, aiding towards higher beta margin?

For our other API product, it is yes.

Okay. Okay. Fine. I've got it.

Thank you. The next question is from the line of Sorby from NVAlpha. Please proceed.

Hi, for the opportunity. So, I have two questions. One, your other API, the non-Ibuprofen, has now crossed a 200 crore kind of quarterly run rate, which is not seen in the last few quarters. So, one, what is driving that growth? And second, of the 200 crores in the non-Ibu segment, how much of it is regulated market and how much more can we supply to the regulated market? Thank you.

Thank you, Surabhi, for asking this question. So, basically, around 21 to 20 percent is coming from the exports market. That also includes regulated and non-regulated, but majority of it from the regulated market. So, as of now, not having the exact bifurcations, what is from regulated and what is from non-regulated export market, but majority of this revenue is coming from the regulated market. And this year, we achieved around 43% of overall the pharma from other than the ibuprofen non-product portfolio that enables to crossing the 200 mark. And as we were discussing for last few quarters, that we are looking to achieve in near mid to short term range around having the 50% from ibuprofen and about 50% from non-ibuprofen. I think that we are very near to achieving it. And this is the result of our efforts which we are putting in for last few quarters. So, I think we are very near to that.

Got it. Yeah. Just last question, in the non-imuprofen, what is our biggest API? Is it clopidogrel? Is it pentaprozole? Which one is contributed?

So, in this segment, paracetamol, clopidogrel, pentaprozole, magformin, phenofibrate, levitracetamol, these are our key growth drivers and the key products.

Got it. Okay.

Thank you so much.

Thank you.

Thank you. The next question is from the line of Jainam Ghilani from Swain Investments. Please proceed.

Hi, sir. Congratulations for a good set of numbers. So since we pilot scale effects of around 200 to 250 kilos, how much would this be for our maintenance effects? And in terms of growth effects, would it be for the new greenfield side and we had got EC approval or would it be for some other projects?

We follow a cache of approximately 200 CR every year, which is planned with a long-term view to support sustainable growth. Out of total CAPEX planned, 60% is directed toward expansion and new products, and the remaining 40% goes to infrastructure, improvements for better efficiencies, and reduction in cost. So, you see, we have, from the last 4-5 years, we have doing a tapets of 100 to 200 CR approximately every year.

Okay, and sir, just to continue to the question of one of the earlier participants, sir, in this quarter, how much of the cost of the pay would be attributed to the one-time inventory gain due to the surge in pricing because of the war?

Your voice is not clear. We are not getting the questions.

So, just to continue one of the earlier participants' question. So, in terms of profitability, how much was one-time inventory gain due to the purchasing pricing for this quarter?

So, basically, this is not due to the inventory gain. So, we might be having a little bit of inventory gain during the later part of the last quarter, around 10 to 15 days. But this quarter, we are not having the inventory gain. This is not correct to allocate this profit towards that. This is the mix of our key factors. Higher capacity utilization, better product mix, we also have some as over the operational efficiency, and also better performance from the non-IWU products and increase in the export realizations in the non-IWU side as well. So I think put together all these factors resulted into the better performance. This cannot be contributed or cannot be allocated against the inventory game. Okay, sir. Thank you so much. Thank you. Thank you, gentlemen. Thank you so much.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on their touchtone telephone. The next question is on the line of Santoj from LGT Capital. Please proceed.

Hello, sir. So, my first question is, non-ibuprofen products increase their contribution to pharma revenue from 36% in Q1-FI26 to 43% in Q1-FI27. At what point do you see this portfolio become large enough to materially change the overall pharma margin profile?

See, what we are expecting in the near term, this particle should achieve around 50% overall contribution into the pharma. And that the 50% we expect must be further divided into the domestic as well as the export. So, I think while we will be achieving the 50% and also the export realizations will increase, this will change the overall contributions towards the bottom.

Okay, sir. And my last question is, with 26 crore invested in R&D during FI26, what are the key commercial opportunities emerging from your R&D pipeline, and what kind of contribution can we expect from these initiatives over the medium term?

So, R&D, basically, this is not the one-off expenses we are doing into the R&D. These are the regular expenses in the R&D. And this is not allocated to any specific development of any product or the product.

I think the more important is, out of this fund, we have allocated some of the funds for the purchasing the new analytical techniques, like we have purchased XRD machine, we have purchased LCMS machine, GCMS machine. So, basically, these are the high-end machines, which we have purchased to analyze the impurity profile at a very stringent level.

Okay, sir. Thank you so much for answering the question.

Thank you. The next question is from the line of Soumya from Mirva Securities. Please proceed.

Good afternoon, sir. Thank you so much for the opportunity. So Q1 revenue grew 37.1% year on year, while EBITDA grew 60.7% year on year. How much of the EBITDA outperformance was driven by operating leverage versus improvement in product mix, if you could throw some light on that?

The increase in abita margins, primarily due to the operational efficiency of existing product with increased capacity utilization, and there is no major product mixed chain, except more penetration in the short market. So, then, More abita is primarily due to the internal efficiencies of the company, not primarily through the external factors.

Okay, so I got it. So, my next question is on PAD. PAD grew around 90%, 89.9%, if I'm not wrong, year-on-year-end Q1. Apart from the operating performance, were there any one-offs or below EBITDA factors that contributed to sharp PAD growth?

Nothing. I would say nothing.

It's a routine financial number, although there is no extraordinary thing which will be done except for internal efficiency.

Okay, okay. So, my next question is on Pharma. The Pharma revenue grew 43% year-on-year in Q1. Could you help us understand whether the growth was broad-based across the portfolio or concentrated in a few key products?

Across the portfolio. It is across the portfolio because all the products, the maximum efficiencies with respect to utilization has been achieved.

All right. So, just a last question from my side. If the current diversification strategy plays out as planned, what would be a reasonable target for non-izoprofen contribution to pharma revenue by FY29? And would you expect that mixed shift to structurally less consolidated margins?

For FY29, only after three to four years, we are expecting that non-IBU segment will contribute around 50 to 55% of our API segment with good margin equivalent to the otherIBU roofing margins.

Okay, sir. Thank you so much. I'll rejoin the question queue.

Thank you.

Thank you. The next question is from the line of Molle Aquaria from 361 Mutual Fund. Please proceed.

Hi, sir. Molecule from 361 Capital. Thank you for the opportunity and congratulations on a good set of numbers. A few questions from my side. So we've seen growth, strong top line growth across all products. So, Jis wanted some qualitative idea from your side. Why was this growth muted in the last few quarters? And you, of course, had indicated that demand is expected to revise, and you had indicated about it. And what has led to this revival? And what is your visibility about how long will this strong demand sustain? Will it be there for the next 8 to 10 quarters, 12 quarters? Any qualitative direction, sir, on the demand?

Malik, both top line and bottom line growth was due to higher volume along with better pricing of our established products as well as growth in new products. Also, in spite of increase in input prices, we are able to achieve these numbers by passing the increased cost to customers due to healthy demand, both in domestic and export markets. So, these are the main reasons for growth in both top line and bottom line. And taking into consideration of demand, prices, and experiences, we expect revenue growth around... 20% and EBITDA, 14 to 15%. This growth is based on better capacity utilization, product mix, and operational efficiency. And we have reasonable visibility into our order book for the coming quarter. So this gives us confidence in overall guidance for the year. We think this growth is sustainable for the whole year.

Okay, okay, sir. And any guidance, sir, on FI 28, will we be able to grow in similar run rate of 15-20% in terms of top line and also on EBITDA margin, sir? Any guidance on that?

Definitely, we have a plan to grow about 15-20% in top line and EBITDA to 15-17% in 28, approximately.

Okay, okay, okay. EBITDA margin, you are slightly upgrading in terms of volume, better volume and pricing scenario.

Actually, we cannot project for 28 at this time, but we hope we will get better.

Sorry, sir, your work. Sorry.

Malik ji, this is on the basis of the current scenario. Suppose down the line six month scenario got changed. Maybe what we are saying may not be possible. So this is as per the current scenario. So this is on the basis of the current plans we have. So the projections is on basis on that.

Noted. Okay. Okay. Thank you. And also one question is sequentially, we've seen a decline in gross margin. So is my assumption correct that last quarter we had some inventory gains because of which our gross profit was higher, gross margin was higher, and this quarter due to higher input costs, the gross margins were relatively lower on a sequential basis.

As I already explained to some analysts, that in the March quarter, for a few days, we get the inventory valuation benefit, but in this quarter, the input prices also increased and finished price prices also increased. And the margin has impacted due to certain variation in passing the increased cost to the customer because we already tied up some prices to a big customer for their final prices. So, all these defenses have been already exhausted, and there is no future any... Major variation in the prices input and order.

Okay. And so, in our other expenses, what would be the major cost? Because that has also increased on a QOQ basis. So, what would be the major contributor to this?

In other expenses, we have major energy and logistic cost. So, while there is a pressure globally, we have not seen any material impact. So, prices of power cost, logistic cost increasing, increased during the quarter, but we are able to pass on the major part of the increased cost to the customers. So, we have no major material impact on our business.

Understood. Okay. And last question, sir, in terms of our non-IBU profan that has been outperforming or growing faster than the IBU portfolio. So going ahead also for the guidance you've given for FI27 and for future, which products would be the key drivers for this? Or will it be the entire non-IBU profan portfolio which will see a very strong demand?

In the non-IBU portfolio, the Paracetamol turnover contributed mainly for this increase. Other products like Clopidoveral and Pantoporzol also contributed. So overall, all the products contributed in this rise.

Okay, so it's going to be a broad-based growth going ahead also for the non-IBU.

Sure. Do your встреч.

Okay, okay. And, I mean, in terms of our regulated market exports, so any new products which we have filed or, you know, are awaiting approval, anything, sir, any visibility on that?

So, basically, are all the products got this PEP approval? And apart from this PEP approval for all products? We have also got approval from the USFDA for our SPI products, and 2-3 products are already lined up because the formulators have filed their ANDA, so once their ANDA will be approved, our products will also get approval from USFDA. But CP is available for all the products.

And additionally, we are getting into the other markets like NMPA China has approved our Clopid Observe recently. So, we are targeting different regulated markets as well depending on the customer's requirement.

And in past, our ibuprofen also approved in China.

Okay, okay. Thank you, sir. I'll join the queue. Thank you.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on their touchtone telephone. My next question is from the line of Nimesh Verma from AAS Capital. Please proceed.

Good afternoon, sir. Am I audible? Thank you for the opportunity and congrats for the good set of numbers. So, I have a few set of questions. The first one being ibuprofen continues to be an important part of the portfolio. With the broader API portfolio scaling up, how do you see ibuprofen share of total revenue evolving over the next three years?

So, as you rightly said, the iBoo profile is an important part of our portfolio. Having said that other products into the API, they are also performing. So, we are a diversified API company. iBoo is one of our products, but the fact is that it is one of our best products. So, the way we establish the leadership in the ibuprofen, the same model we will also be replicating in other products, as and when the time is coming, the product is reaching to their scalability, achieving the scalability. So, in other products, if you talk about many products, we are getting and all are performing well. Paracetamol is also contributing well because cloppy is also doing well and in recent past we also increased the capacity of 3-4 products. So going forward the growth what we looking is the broad-based growth involving all product portfolio, the better product mix.

Okay, sir. Got it. My second question would be, the company has been strengthening its backward integration manufacturing platform. Are there any specific intermediaries, KSMs currently being evaluated for backward integration that could meaningfully improve product economics?

So, honestly speaking, as of now, we are working on different streams in R&D, but probably we can give you some idea when we have some proof of concept ready with us after R&D development.

Okay, got it. And my last question would be, with the 101-acre land parcel available for future expansion, should we expect the first major projects on this land to be commissioned within the current CAPEX cycle, or is it more of FY28-29 growth platform?

So again, we are in the process of getting all the statutory permissions, which is underway. Parallelly, we are working on different product mix in our R&D section, and once we have very clear-cut idea or proof of concept ready with us, definitely we will start the work there and product will come at that site also.

But probably not in this site.

Okay. Got it, sir. That's it from my side. Thank you for the opportunity.

Thank you. The next question is from the line of Sheikh Mohammed, an individual investor. Please proceed.

Thank you very much for the opportunity, and many, many congratulations to the management for the excellent set of numbers. My question is... Will the chemical business continue to perform the same, or we have picked the EBITDA margins of chemical segment?

The EBITDA margins of chemical segment has been on upward trend in this quarter, so we have got better EBITDA margins in this quarter, and you see we have also And we have done better in this quarter. Increased exports in chemical segment also contributed for this.

So, means you see that same kind of performance may continue?

Yes, sure. We expect it will continue.

Okay. Sir, another question is, last conference call we have mentioned regarding TMO space. So, what opportunity we can fulfill or we can have in that space?

Sir, we are working on that segment also. So, I think once we have very clear-cut proof of concept ready with us, definitely we will let you know, sir.

Okay, uh... Sir, I can see that we have given the 2600-2700 full-year top-line guidance we have given, and by seeing this quarter, do you think we can outperform the previous guidance of both top-line and bottom-line?

So, I think the previous guidance when we given, we have taken into consideration of this whole year. So, the guidance will be remaining in the same line. However, we will be having the current scenario.

We think that we may cross that number.

But we don't want to trade the guidance.

Okay. And sir, in terms of export, we have already achieved 28.5%. So, management is approaching defensive side because we have given 20,000-30% export percentage because already we have achieved 28.5% in Q1.

Yeah, that's correct. We achieved 28.5% and we are expecting around 30%. So if we say around 30%, it can be the 28% or it can be the 35% also. But this is sort of the mean number we have taken. And we need to be correct when we say something rather than we don't want to caught saying something which is not able to achieve. So that is the philosophy we just communicated around 30% and we are hopeful that we will be achieving it. Maybe we can cross that also.

I think, and moreover to this number, basically, we have export customers where we have agreemented quantities. So, in some cases, most of the quantities have been dispatched to that customer, so that number increases. But there are chances that in the next quarter, that customer has a very little bit quantities out of the agreement. So, these are some of the variables which can lead to the export number little bit up and down.

Okay, okay. Sir, are we planning further regulatory approvals for chemical segment or for other product approval in chemical segment?

So, we have basically two products. We are mainly doing merchant sales. Ethyl acetate is 100% used for the ethyl merchant sales. And apart from that, we have the acetate canhydride. So, we have all these two products. Already approved and recertification is there. And apart from that, we also introduced in the last quarter dry acetine. So we will be expecting the regulatory approval for this product also. It takes normally few quarters to reach the maturity of this product and I think we will be getting this.

That's very good to hear, sir. That's very good to hear. We are continuously improving our chemical segment and improving the export also. Sir, another question, maybe some tricky question, but I want to ask this question, last question. SMS pharma got hit in this quarter because their revenue and profit both got hit. So, can we think we have beaten them in terms of edupressant manufacturing technology?

Sadly, as you said, it's tricky, but we don't know about others, what they are doing, and we don't want to comment on also. We are confident about our strategy. Our manufacturing capabilities and operational efficiency, so we would like to discuss those things, and we would like to limit ourselves to that discussion only.

Okay, sir, this is the last question. Do we planning...

Sorry to interrupt you, Mr. Mohamad, but can you please rejoin the queue for follow-up, as there are several participants waiting for that. Thank you. The next question is from the line of Abhishek Kandar from Value Plus Advisors. Please proceed.

Yeah, hi. Congratulations on a great set. I have a question on Triaset in the new facility that's commissioned. What is the capacity utilization that you achieved for Q1?

For paraffetamol?

No, no. Triaset.

Triaset. So, triacetyl, I think this plant, we have started production in May, after May. So, I think this was only one month of production in this, but yes, this plant, slowly the capacity will increase, because parallelly we are looking for the penetration into the market as well, and accordingly we have to increase the production capacities.

And at a steady state, what is the revenue potential of this? The 6,000 MPPA that we have.

Hello? Around 100 PR per year.

Okay, alright. And in terms of the inputs towards triacetan, would it be the acetic anhydride itself? And what percentage or proportion of our acetic anhydride would be captive consumption then?

No, no, it is not acetic anhydride. It is acetic acid. And glyphosate. These are the two input materials for this. So acetic anidide is not used in this product.

All right. Okay. But about 120 crores is the revenue potential of triacetate.

Yeah.

All right. Okay. And how does that compare with the EBITDA margins of ethyl acetate?

This is not on the product basis we disclose the Emitar margin, but on the second basis we can disclose it.

Both cannot be compared because the usage are totally different for both the products.

Thank you. The next question is from the line of Santosh Shetty, from LSG Capital. Please proceed.

So, I just have a couple of follow-up questions. Like, firstly, backward integration has been an important part of IOL's strategy. So, are there any significant raw materials or intermediates where you are still dependent on external sourcing and could potentially integrate further?

I think Matformin, for manufacturing the Matformin, which is not the integrated product in our portfolio, and perhaps we will not be doing the integration, backward integration for the same, because we are depending for DCDA as a raw material from China. And I think not only we, most of the companies are depending on the same from China, because this is geographically up-leveled into that region.

Okay, so great. And another question, IOL's overall export contribution has moved to 28.5%. Is the higher export mix also resulting in a better product or a customer mix, or is it the benefit primarily from higher volumes?

No, it's a mix of everything. It's a mix of better product mix, and it's the result of operational efficiency, better realization. And the customers reach also. So, this is a mixture of everything, not any specific reason is not predominantly or dominantly can be contributed to this number.

Okay, so that's great to know. It's positive that your story is reflecting into numbers which we can see in our APIs. So, all the best for the future. Thank you.

Thank you. Thank you so much, Santhoji.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Thank you, everyone, for your questions and for engaging the discussions. To conclude, we are encouraged by the strong start to year FY27 and the progress across our pharmaceutical and chemical businesses. The increasing contribution from our non-IWU portfolio and strengthening our international presence demonstrates that our diversification strategy is gaining meaningful traction. With our integrated manufacturing platform, diversified product portfolio, process capabilities, and growing international footprints, We believe IOL is well-positioned to build on the current momentum and deliver sustainable long-term growth. On behalf of the management, I thank all our stakeholders for their continued trust and support. We look forward to updating you on our progress in the coming quarters. For any further queries, please feel free to contact our IOL team. Thank you and have a good day.

Thank you. On behalf of MUFG Investor Relations, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you, everyone.

Thank you.