Tatva Chintan Pharma Chem Limited (TATVA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Tattwa Jhantan Pharmacam Ltd. Q4FI26 Earnings Consents Call, hosted by ICICI Securities. As a reminder, all participant lines will be in the listening 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjeej Jain from ICICI Securities. Thank you and over to you, sir.

Thanks, Bhutanali. Good evening, everyone. Thank you for joining on for Tattwa Chintan Pharma Kevin Wittet Q4FI26 Results Conference Call. We have Tattwa Chintan Management on call, represented by Mr. Chintan Shah, Managing Director, Mr. Ajesh Pillai, Chief Financial Officer. I would like to invite Ajesh Chih to initiate with opening remark, post which we will have a Q&A session. Over to you, sir.

Thank you, Sanjay Chih. Good evening, everyone, and welcome to Q4-FI26 earnings call of Tattwa Chintan Pharmacam Limited. Our financial results for the quarter have already been committed to the stock exchanges and are also available on the company website. I will take you through the key financial highlights and provide you a brief update on the performance of our major business segments during the quarter. For Q4FI26, the company reported operating revenue of rupees 1,341 million, reflecting a strong growth of 24% year-on-year and 2% quarter-on-quarter. EBITDA for the quarter stood at 281 million, marking a significant increase of 214% compared to the same period last year and a 10% improvement sequentially. This growth was primarily supported by better product mix and improved operating leverage. Now, turning to segment-wise performance, first is phase transfer catalyst. It recorded revenue of Rs. 311 million, registering an 11% sequential growth, though the revenue was lower by 20% on year-on-year basis. Electrolyte salts delivered a strong performance with revenue of 131 million, reflecting an exceptional growth of 865% quarter-on-quarter and 1,378% year-on-year. Pharma and agro-intermediates and specialty chemicals generated revenue of Rs. 358 million, representing a 10% increase year-on-year despite a 24% decline sequentially. Structured directing agents reported revenue of Rs. 525 million witnessing a marginal decline of 2% quarter-on-quarter while achieving a robust 52% growth compared to the corresponding quarter last year. With this, I conclude the overview of performance for the quarter. Once again, our Managing Director, Mr. Chintan Shah, has entrusted me with the opportunity to deliver this address on his behalf, and I sincerely value the confidence placed in me. With that, let me take you through his perspective on the year gone by and the progress achieved across the business and the direction we envisage going forward. First and foremost, I would utilize this opportunity to congratulate all the stakeholders on achieving revenue in excess of Rs.500 in recently concluded financial year. This year also marks an important milestone as your company completes 30 years of operation, a journey defined by committed innovations. As we conclude the financial year, we are pleased to note that Satwa Chindan is at an inflection point where multiple initiatives across our business segments are beginning to converge, reflecting the early stages of a more structured growth. Over the last couple of quarters, we have been observing a gradual pickup in momentum in business activity across the segments. Order flows are becoming relatively more stable. There is a consistent gradual uptick in demand. Customer interactions are increasingly moving beyond short-term procurement towards broader business discussions and future requirements. The overall engagement environment across key end-use segment has improved significantly compared to what we experienced over the last couple of years. This is helping in better planning, improved continuity in business discussions, and more structured commercial engagement across all the segments. At an operational level, our efforts during the year remained centered around improving execution across businesses, stabilizing newly commercialized products, and preparing the organization for higher scale across select segments. Also, we remain focused on making the new production block at the head site operational. The new block is now fully operational on commercial scale. Alongside this, we continue to work on process optimization and on strengthening the manufacturing readiness for upcoming opportunities. As we move into the new financial year, our focus will increasingly be on translating these efforts into more consistent commercial outcomes, while ensuring the organization remains adequately prepared to support future growth across multiple business verticals. We believe the work carried out over the last few years has created a stronger operational foundation for the company. As several opportunities gradually move towards higher scale and regular business engagement. Let me now take you through the segment-wise developments. Phase transfer catalysts continue to deliver steady organic growth in line with historical trends. Over a period of time, industries across the chemical sector are increasingly recognizing the process and efficiency advantages. Offered by PTC Chemistry in various applications. We believe this gradual widening of acceptance across industries will continue to support the long-term organic growth of this segment. Structure Directing Agents. In Structure Directing Agents, the demand are consistently growing, and as we come near to the 2027 implementation of stricter emission norms via implementation of Euro 7, The demand will continue to gradually rise. The first implementation of these norms is beginning with Europe and would be followed by other geographies gradually. We are also witnessing improved customer engagement across key geographies, with business discussions becoming more structured. Given the specialized nature of this chemistry and our established position in the segment, we continue to remain positive on the long-term prospects of the SDA business and expect it to remain an important contributor to the company over the coming years. Electrolyte salts and solutions. The electrolyte salts segment continued to scale gradually, supported by increasing consumption in energy storage applications. The customer utilizing our electrolytes for energy storage devices has shown a steady ramp up in volumes and we expect this trajectory to strongly strengthen during the current year. In addition, work with the customer engaged in hybrid battery application is also progressing well. We shall see a beginning of commercial business for this application in Q3 of this current year. With gradual scale-up across customers, this segment is steadily strengthening its strategic relevance within our overall portfolio. The current year will reflect electrolyte segment as a relevant contributor to our overall revenue. Pharma, Agro, and Specialty Chemicals, that is PASC. In PASC, commercial traction has improved meaningfully. The agro-intermediates commercialized earlier are witnessing sustained demand and are expected to see healthy off-take during the year. On the pharma side, all the validations of our products are successfully completed and commercialization will begin from current year. We have one product getting into commercialization in Q1 and the other two products will get into commercial production from Q3. These products would be produced and delivered on campaign basis. Overall, This segment continues to reflect the benefits of our focus on catalytic technologies and complex chemistry development. Semiconductor chemicals. In the semiconductor chemicals segment, we are pleased to report a significant milestone. Plant scale trials for our first product have been completed successfully, and its discharge would happen in the current quarter. This is a big confidence booster for our team, and this success brings in new zeal to putting more efforts to make this as one of our most important product segments over few years. This marks an important step forward in our long-term semiconductor roadmap, and while the scale-up will remain gradual, it strengthens our confidence in the emerging opportunity within this domain. As we discussed earlier, Our focus on building infrastructure for future growth remains a key priority. With respect to the new greenfield project at Jolwa, the preparatory work has progressed further, and we expect to commence the groundbreaking during this quarter. As the project engineering and planning were refined further, we identified opportunities to enhance long-term scalability and operational efficiency of this facility. We believe this additional effort at the design stage will strengthen the long-term value creation potential of this asset. This facility will be a key enabler for products with strong domestic demand and will significantly enhance our manufacturing collectability as we move towards commercialization over the next 18 months. The current ongoing geopolitical conflicts definitely pose challenges, this leading to rising costs of fuel, packing material, and of course the biggest challenge is the increased increase in the prices of sea raw materials, which are crude origin and related to ammonia. The freight rates are also increasing. The good part is that so far availability of raw materials continue almost smoothly, except for some delays in certain cases. We have worked closely with each customer and most of our major customer has shared the impact of rising costs. We appreciate the support of each customer in their understanding and support in this difficult time. With their help, we have been able to minimize the impact of increasing costs. Of course, as a part of our commitment. We have honored each and every open order for all the customers. The increased price have gradually been implemented on new orders. With multiple developments getting into commercial phase, we foresee the momentum of growth to continue for next two years. Once the new Greenfield Field project at Jolwa goes online, it will bring in the next phase of growth from financial year 28-29. We will launch two agro intermediates with significant revenue potentials. We have successfully piloted the innovative technology by which we will produce these products at the new plant. Besides the new launches, the Jolwa project will also have capacities available for us to grow within our existing products. As we reflect on the journey of the company over the last three decades, it is evident that the foundation of Saskatchewan has been built on consistent investment in technical capability, innovative technology, customer-centric approach, and disciplined execution. Today, we are seeing the results of these sustained efforts gradually coming together across the business, setting the stage for a more integrated and scalable growth platform. We remain committed to maintaining this disciplined approach as we move forward with a continued emphasis on operational excellence, technology-led differentiation, and long-term value creation for all stakeholders. We would like to sincerely thank our customers, business partners, shareholders, and employees for their continued trust and support over the years. With that, I now request the moderator to open the floor for question and answer session.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star then once on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you are requested to use answers while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and want to ask questions. We have the first question from the line of Siddharth Singh from Green Portfolio Private Limited. Please go ahead.

Hello. Am I ordered? Yes, we are ordered. So, to begin with, how should we think about the overall revenue growth outlook for FY27 and overall blended EBITDA margin? Like, as in Kupur, we have, I think, achieved 21% EBITDA margin. So, what is the overall outlook for FY27?

Yes. So, actually, the guidance has already been given in our previous calls. We have already maintained that we will be growing the revenue by around 25 percent, and EBITDA should be in range of somewhere around 20 to 22 percent on a very realistic basis. So, we will stick to that.

And like, due to geopolitical issues, like we are not decreasing our guidance, like EBITDA guidance.

Not actually, because the crises are going up due to the geopolitical situation and other things, but gradually it is being absorbed by our customers. Our customers are cooperating. Although they are not being absorbed at 100% level, but probably we believe that it will gradually be absorbed. And we don't intend to change anything on our guidance in that matter.

Okay. Sir, at the start of the call, like you told electrolytes, salt segment will be a key contributor this time in Epo27 lights. What will be the percentage, like if you can quantify it?

I don't... 8 to 10% that we had already informed in last earning call, and we are still going by the same.

Okay, okay. And, like, we are, we are getting any visibility about electrolyte salt orders, like, with any key customer in US or anywhere?

Yeah, actually, it's a sunrise, this thing, segment, and we have been an early entrant into it. So, we have been working with quite a few companies on this, and we have been very transparent in our earning call about it, and now gradually we are seeing that it's materializing, the things are getting stabilized at the customers' end, and the uptake of the products from our end is actually increasing. So, that is quite evident in the results that we provided.

Thank you. Okay. And, sir, one thing, like, I misbeet, like, what is the commercial execution timeline for Jolwa project?

We are actually at the planning state. We are actually at the planning state. And, uh, after the planning, we would take somewhere around 18 to 20 months. So, roughly around in January 2028, I mean first. A couple of months of 2028, we will be commercializing the old war plant. We will be starting the commercial product.

So, like current facility, like what is the peak utilization of current capacity, I mean revenue terms?

Around 85%, 80 to 85% range.

Okay, right now we are... So, peak potential revenue will be around, somewhere around 700 crores maximum from current capacity. And after Jolwa plant, we can like enhance that.

From the current facility, it would be somewhere around 850 to 900 crores of revenue. And Jolwa facility, the revenue would be on the similar lines.

Okay, okay. Your facility will go in multiple phases.

For phase one, we estimate the revenue potential in the range of 400 to 500.

Okay, okay. Okay, got it, sir. And one final question, like, on the semiconductor chemistry, as you told, like, we are going to dispatch our first trial this quarter only, like, but apart from that, like, we are seeing any more demand uptick here or any new pilot project or, like, we are still thinking about that commercialization will still be happening in calendar year 28.

It's a very complex chemistry, and there are a lot of validation cycles that will be happening till that period. Okay. So, it's the planned product that is being sent as of now, which again will undergo different validations, and then the final commercialization will begin somewhere around in 2029.

Okay. Okay. Okay. Thank you so much, sir, and all the best for your future. Thank you. Thank you.

Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. We have the next question from the line of Sanjeej Jain from ICSA Securities. Please go ahead.

Yeah, thank you. Thank you very much. I got a few questions. First, on the electronic chemical this quarter, we had seen a sharp jump. Quarterly-wise, is this the run rate we should see for the remaining year? Is that a fair assumption that what we are selling in this quarter, for next quarter, quarterly basis, should we sustain at those levels?

It's a sustainable growth. Sanjayi, it will be somewhere around the same point in all the quarters.

Okay, so this is not the actual to Apple every quarter, but on a yearly basis, you can say it would be four times of this revenue is worth it. Correct.

Okay, so we will see a very sharp jump then next year for this. And this is only for one application or this is including both the application?

Currently only for one application. Second application of hybrid battery will go online by somewhere in the phase of November or December of this calendar year.

And the run rate should increase from there, so that?

So that should increase, but that business will also get into full commercialization, so it will be a gradual ramp up getting into full scale by 2028, when the actual vehicle launch is happening in mid of 2028. Before that, probably late 27 or early 28 is when the actual ramp up will happen.

Got it, got it. And for PASC, this quarter we saw a decline. I thought we had a big win in PASC. How should we see PASC and how are we seeing the agrochemical demand and the demand for our product in the next quarter? Sorry, next year.

The demand is pretty stable. Why we saw this decline was not because of lack of order, because of That has happened because of, we started producing it from the new facility. Now we started trial production in January and commercializing in February. And post that we had seen a lot of challenges which we had to overcome to streamline the production. That is what caused a lot of delays in terms of dispatching the product. And then this has now been overcome and things are moving. So, in terms of orders, we have good visibility till end of calendar year, current calendar year, and I assume the same to remain, same to continue even for the next year as well.

So, agrochemical, we had two products, one is photochlorination and the other one is the larger product. Both are seeing the production ramp up or just one of them?

Yes, both are seeing. Both.

Both of them. Both of them are same.

Both of them. So, the photoclorination product also, we had lot of challenges. We gradually, gradually, one after another, we could sort out all the troubles. And now, there as well, the production has become much more smoother. And now, we are seeing consistent discovery at the top of our path.

Got it, got it. And on the pharma side, we said we are starting one product to commercialize from the Q1 onwards. How should we see entire pharma piece for FY27?

On the upper side, we should see a revenue in the range of about, I believe, somewhere close to 70-75 crores in this financial world.

No, 70-75.

That is completely a new add-on. 70-75 crores is a fair statement. That will be a completely new add-on to our existing business. So, of course, there has been revenue from pharma, but it was very negligible. Only coming from those validation trials and stuff like that. But now the actual commercialization has begun. So, we are already executing a couple of orders for this first product. So, production is ongoing, and the distributors have already started. So, yeah, we have clear visibility to scale within a range of 70

to 75 years in financial aid. Got it, got it. And on the SDA side, this year has been a very good year, and given that the gas prices have also gone up very sharply, which can become a tailwind for our ICE engine growth, and Euro 7 implementation on the card starting with Euro, How should we see this number is sustainable or you expect in FY27, we will grow the HDA even on the high base of this year?

We expect to grow at least by 20% in this current financial year. We should reach any wealth number between 250 to 300 CR.

Got it, got it.

Now, as we go ahead, you know, month-on-month basis, we are gradually seeing more orders being put up for the Euro 7 application. Now, that is happening. That switch is happening to Euro 6 to Euro 7. So, yeah, we will see that uptick. Probably somewhere around July or August is when you start seeing that uptick in the numbers as well.

Got it, got it. So if I look at the three segments, which is ESOS, PASC, and SDA, it appears that next year could be pretty strong than the 20-25% revenue guidance which we give, right?

I will stay with 25%. See, there are a lot of uncertainties in terms of

geopolitical issues that are happening.

It may not hit us, but it may hit us faster. So, there are a lot of uncertainties within this era. Right now, what is happening is something which we have never seen historically. So, I would stay a little conservative with a prediction of 20 to 25%. There are possibilities we can reach higher, but I would safely say, you know, to predict a growth of 25% is more realistic.

And on the West Asia crisis, we use a lot of amines, which is made from ammonia and all. How is the raw material situation and the price increase that we have taken? What is the ballpark price increase we have started taking now? Because that will also add to the growth, correct?

Yes. There was a phase of two or three weeks when nearly mines were not available at all. More or less immediately after this Iran issue started. Somewhere in March, we lost a lot of many production days because of unavailability of the army, but post that, the availability has become very smooth, so there is no issue in terms of availability, but the prices have gone up by nearly 30-40% of the army. So, that is a deterrent. So, in most of the cases, we have been able to pass on that price increase to the customer. Gracefully, most of the customers have, fortunately, even accepted it. That has not become a big challenge. There are certain pieces where customers are relevant in terms of only allowing us to change the raw material price. In fact, only if... Only passing on the impact related to the raw material size. That may have some adverse impact on Ibiza, but largely on a broader scale, with increasing volumes and a robust year that we forecast, I think that that compensated with increased fuel cost and a little heat in Ibiza margin to become of the system perspective should not really have any material impact in terms of what Ibiza margin is. There also we stay with 20 to 22%. Because what is happening is it improves the efficiency of the plant output. The occupancy of the plant is going up. That is taking care of some of these variables which are absorbed by in terms of efficiency. So that's a good part. The time when we are seeing the reversal in terms of demand is acting is virtually at a very good time which is taking this adverse impact.

So, we are telling that despite all this situation, we will maintain the margin and growth, probably there is a possibility of a green shoot, but we should achieve at least 25%. Absolutely, yes. And one on the... And customer, what is the feedback you are getting on ACKEM? Because I think there is a lot of concern on ACKEM volumes. Are you hearing the same concern from your customer for your product?

Not for it. It is not for our product. And we are very insignificant volume to the total demand. So probably we are not impacted by that. So we continue to enjoy our share of the business for those two particular products which we have newly launched. And I don't see any challenge, especially in calendar year 26. And what I hear is in terms of allocation, potential allocation for 27 years. I feel you have to be confident too, even in the pharma case. So both years, at least for this year and the next year, we have very good usability income.

Got it, got it. And the new plant we started, should it ramp up from the Q1 completely and should it add to the growth? Because sequentially now...

Yeah, so now it is working very smoothly and that's it. That's the only way where we can now say that we can scale up to a revenue of 850 crores from this existing facility. So, even before the Jolwa plant becomes operational, this is the place where, of course, we still have certain bottlenecks, very specific bottlenecks which we have to remove. So, there would be an infusion of some sapex, but very minor, you know, maybe ranging 10-12 crores a year kind of a thing, which will help us eliminate certain bottlenecks and still ramp up the revenue to a range of 5,900 crores. And this is only possible with this new plant which has become operational now.

And we should hopefully reach the full potential in FI 28?

Next, so not this current financial year but next financial year.

Got it, got it. And on the margin earlier we used to do 25% when the plant is fully operationalized, that target also is achievable, right?

That is achievable, yeah. Then it becomes realistic, yes.

Got it. And then on the Jolva side, can you help us understand what we earlier talked about?

We are into detailed engineering. So during this course of detailing, we got certain feedbacks from our designer team. This is on which we had to do some more further trials, which actually helped us to optimize the process and the engineering requirements to a very large extent. So that is what held us up for nearly four or six weeks. But that has really helped us to, you know, identify that this process can be further, become more robust, optimized, and that reduces our need for number of reactors to be installed at the plant. So that is what we achieved during this last four to six weeks. So now it is into final designing stage. And then potentially now we will be calling in for the bids from the various construction companies for civil construction. And then I think by within next 60 years we should be breaking the ground for it. From that point on, so let us say we are in mid-May, the background in mid-July, from there, let us consider the timeframe of 18 to 20 months to come into the products. So that is what probably calendar year 28, early calendar year 28, January to March, which I think will kick off.

And then we should be investing, what, 250, 270 crores there?

Roughly in that way, yes.

And this will have, as we said earlier, a dedicated plant and an MPP, right?

Yes. So this is one dedicated facility for this large agro program that we are launching. And just to mention here, which I'm really proud of, that this is being done by a new technology, It has been fully developed in-house. And we have not seen any single patent or process filed via this route of chemistry. So it is something exceptional that our team has achieved, and we are really proud of that. So this is what we have now successfully piloted as well, and now it is a matter of commercializing when the plan becomes.

Got it. And then one last bookkeeping question on the tax rate. This quarter, the tax rate appears to be exceptionally high at 38%. Can you just take us, how should we take tax rate? I thought we have this tax holiday because we were enjoying the tax holiday in our Dehage facility, which is the larger one. Can you take us through the tax rate, what's happening there, and how should we see it?

There are a couple of things into it. One is that we had some carry-forward losses on income tax basis, so the 10 AA benefits are not, we are not entitled to 10 AA benefits this year. And plus the capitalization, I mean, the CapEx has been very heavy, I mean, around 100 crores of CapEx has added, so which actually increases the deferred tax. And that both of them combinedly affect the quarterly listing. Otherwise, if you look at the annual figure, it would be somewhere around 26%.

And going forward, should the tax rate effectively come down because we will start...

Yeah, it will effectively come down. As we continue using these assets, as the depreciation between the books and the income tax synchronize more, the effective tax rates will come down.

And we still enjoy that tax holiday, right? Yeah, yeah. Because the tax cash what we are paying is just 7 crore, but if I look at P&L, it's much, much higher.

Yeah, yeah, yes, yes. Because of that, I'm in different taxes.

And what is the total capex we are looking for the next year?

Next year. Current financials are 119,000 crores, and 175 crores in the next financial year.

175 crores for next financial year, that will be for all Jolba, largely?

Both, both. 100 and 175 crores, both for Jolba, put together, because it will take nearly 20 months, right? So part of that cataract will happen in this year, and part of it will happen in next financial year.

Oh, so 100 crore in FI 27, 175 crore in FI 28.

Yeah.

Got it. That's very clear. That's it from my side. Thanks for answering all those questions, and best of luck for the coming quarter. Thank you.

Thank you.

A reminder to all, you may press star and want to ask a question. We have the next follow-up, we have the next question from the line

of Jai Vaghasia, another Wichita Investor. Please go ahead.

Hi, am I audible? Yes. So, Jinkanji, my first question was on the SDA. So what has happened over the past three to three and a half years is that initially we were caught up with the high cost inventory and in the later part there was, you know, the fluctuation in raw material prices which really hit us high. So, of course, we can't do anything about raw material fluctuation, but is this the inherent risk that the business has that in the SDA, we don't have confirmed PO, we just get the visibility, and then we are able to make the products, and eventually, if the price fluctuation is too much, it intersects in the PLA. So, is it the inherent risk in the business of the SDA?

No. Basically, how it works is you have an annual forecast. And based on that, they keep releasing the orders. Usually, they are very precise in terms of forecast, except if something becomes really unexpected, unpredictable or unexpected.

Sorry to interrupt you. Your voice is taken. Hello. Yes, sir. You're all right. Hello.

Okay. Yeah. So basically, the forecast is pretty much precise. And see, for example, in recent times, during this Iran crisis, suddenly the raw material prices shut up. Very immediately, post our inventory, so whatever we are holding in terms of ready inventory for the customer, that we continue to ship out at the existing rate, and they have readily agreed to, you know, apply the available formulas what we have, that this is the consumption of these three raw materials which impact to such an extent. So those implications have already been applied, and the prices for the new POS have already been revised accordingly. So that is not at all a risk in this particular part of business. The only risk is in terms of demand when it becomes really volatile. And that is what had happened during the past few years, that demand had literally vanished because of massive uptake that happened post-COVID, a lot of inventory piled up had happened, and suddenly the demand crashed because of that. But I think now things are pretty much normal, and we are seeing very residual orders being punched in the other customers.

Okay. And secondly, Chintanbhai, SDA is essentially a dual-poly market, right? So there's 85% around Sarkim and 15% would be us. So in India, our cost structures would be much better as compared to Sarkim. So once this Euro 7 kicks in and there is additional demand, can we expect that our market should be much better than 15%?

Here it is little different way how the business happens in this segment. It is not really a price sensitive matter. So, and that is the only reason why customers ideally says, okay, from next month you have the new price allocated. So, there is not much discussion over emails, it just gets done. It's not a really price-sensitive matter. When something is approved for one specific vehicle, then there is literally no space to change it. So, for example, if the Tattwa product is applied to XYZ variant, then it continues to remain there till the variant has its market presence. So replacing somebody is not an option here for an existing business. You only get opportunities and your doors open only for the new opportunities that come. So that is where we have slowly started gaining momentum over our competitors. And gradually we, so for example in Euro 6 times we were very late and turned. So a lot of things were already fixed up and we were quite late for that part of business to sit there. But Euro 7, we are very well in terms, we have our foot in the door right from beginning, so we will gradually see our market share keep on rising, because yes, there is definitely an advantage in terms of pricing between us and the U.S. manufacturer, so that advantage we definitely enjoy.

Right, so that's what I was asking, so any model that...

And here was a customer, you see, there are only very few select customers for our product. And customers also know that there are only two suppliers for this product. So they always try to keep a balance. Maybe if I say I get most of the shares, then I mean I may be getting 70% out of all. You will never get more than that, you know, from any particular customer for any particular product. Because that is how they want to keep both of us engaged in this business. That is the key. Right, right.

So, with Euro 7, any model with Euro 7 norms, we would be, wherever SACM is, we would be there, right? In most, 85 to 90% of cases.

Okay, okay.

And Jinkan, on the AgroChem side, PASC segment, so, the kind of pipeline that we have built, so, going down two to three years ahead, PASC would eventually be much more bigger than the SDA?

It has definitive chances to be so. You are very correct. So if I say not two years, but I would say once the Jolwa plant becomes operational, then very much it will become much larger than the SDF, for sure. Right, right.

And one more, sir, we have declared dividends this time. I don't understand the rationale behind the dividends. So, we have higher, you see, our loans have increased, sir, short-term borrowings have increased, and at the same time, we are paying dividends. So, it's not justifiable, right?

See, basically, it is that we retain 80% of our earnings post-Met. The net profit, we want to distribute nearly about 10% of that profit in terms of delivery. I think it is pretty fair. For all the stakeholders holding their, keeping faith in the company, then they should be paid back. That is pretty fair. We are loving that 90% of the earnings passed into the company.

Got it, sir. But just a request that at the end, I think there should be, you know, there should be equitability whether the P&L, the interest cost that is hitting in the P&L, that should also, yeah. But it is, again, it's a management decision. And, sir, my final question was regarding the semiconductor space. So, can you just throw some light on the supply chain that would be involved with, so, would we be sending our chemicals directly to the export market, or how would it work? Would it be sending directly to the pay, or there are intermediaries involved?

No, no, there are intermediaries involved. Basically, see, the fab companies normally have larger companies who supply into these fab companies. And the larger companies kind of work as, you know, bringing in multiple products from different, different, different suppliers. Then they re-test them, certify them under their own COS, and that is what they supply to the end customer. So that is how the supply chain is developed. So it is the quality, qualification first happens at this integrator level. It is definitely one very large MNC company. And then, the second stage of qualification happens at the end of the year. Here it is again, so, if SDA, I have been saying all these years is a very difficult entry barrier, most difficult part to get an entry into this ebay for the opportunity for years. This particular segment is even worse than that. It demands a lot of patience, and when the time is right, and probably we have been working in this since almost, I think now, eight or nine years now, when we are seeing first type of commercialization happening now. And this is also not commercialization, this is just getting into validation. Actual commercialization we expect by end of 2028, early 2029, when the product will be really used into cheap manufacture.

Right. So, as far as I understand it, sir, we'd be selling it to maybe Japanese or the South Korean MNC and then eventually they'd be sending it to the Taiwan. Am I correct? Correct. And, sir, the pilot plant that we have set up for the semiconductor space, so what level of purity have we achieved and what are the costs that we're involved? Because this multistate distillation and vacuum systems will be much costly.

So that whole setup is already ready. So that setup is already ready. We are going to actually display our first commercial scale batch, not the pilot scale. Pilot scale dryers have been finished long back. Now we are talking about our first plant scale batch, which has to be dispatched in this quarter. So that whole setup is in place, and when we are talking in terms of purity levels, I mean, not purity, so purity is unsaid, it goes as 99.99, but in terms of impurity levels, we are talking of impurity profiles all below 1 parts per billion. So we are talking of 1,000 parts per trillion range. Got it.

And so this chemical, so where will it be used? Would it be used in an itching or cleaning process or what are the...

Itching.

Right, right, sir. Thank you so much, sir.

That's it for me.

Thank you very much. Ladies and gentlemen, we will take that as a last question. And with that, we will conclude the question and answer session. I now hand the conference back to Mr. Ajesh Pilar for the closing comments. Thank you.

On behalf of Sadhguru Chindan, thank you for joining us on today's earning call. We trust that we have addressed most of your questions during the discussion. Should we require any further clarification, please feel free to reach out, and we will be happy to connect offline. Thank you.

Thank you, members of the management. On behalf of ICAC Securities, we conclude this conference. Thank you all for joining us, and you may not disconnect tonight. Thank you.