Tatva Chintan Pharma Chem Limited (TATVA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Tattwa Chintan Pharma Chem Limited Q1F527 Earnings Conference Call hosted by ICICI Securities Limited. 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 the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is when recorded. I now hand the conference over to Mr. Mohit. Thank you, and over to you, sir.

Thank you, Anushka. Good evening, everyone.

Thank you for joining on Tattwa Chintan PharmaChem Ltd. Q1 FY27 results conference call. We have Tattwa Chintan Management on the call, represented by Mr. Chintan Shah, Managing Director, and Mr. Ajesh Pindai, CFO. I would now like to invite Mr. Ajesh Pindai to initiate with opening remarks, post which we will have a Q&A session. Thank you and over to you, sir.

Thank you. Good evening. On behalf of the management, I am pleased to welcome all of you to Tattwa Chintan's results conference call. To discuss financial results for Q1 FY27. Please note that a copy of all the earnings call related disclosures is available on both the stock exchanges i.e. NSE and BSE as well as on the website of the company. Any statement made or discussed during the call which reflects our outlook for the future or which could be considered as forward-looking statement must be reviewed in conjunction with the risks that company faces. A detailed disclaimer in this regard has been included in the investor presentation that has been shared on both the stock exchanges i.e. NSE and BSE. I will take you through the key financial highlights across our major business segment for the quarter. For Q1FI27, Sathwa Sintan reported operating revenue of Rs. 1671 million. Reflecting a 43% year-on-year growth and 25% sequential increase. EBITDA stood at 323 million, representing a 86% growth Y-on-Y and 15% improvement over the previous quarter. Now moving to the segment-wise performance, phase transfer catalyst contributed Rs. 428 million in revenue, a 38% growth quarter-on-quarter and 47% increase year-on-year. Electrolyte stalls achieved Rs. 63 million in revenue, recording a down 52% sequentially and a growth of 76% YOY. Pharma and agro-intermediates and specialty chemicals delivered Rs. 584 million in revenue, 63% growth quarter-on-quarter and a growth of 25% YOY. Structure Directing Agents reported 578 million in revenue, reflecting a 10% growth quarter-on-quarter and a 47% increase year-on-year. With this overview of the financial and operational performance of the quarter, now I will deliver the speech of our managing director, Mr. Chinkan Shah, on his behalf. As we begin the new financial year, I believe this quarter marks an important milestone in Tattwa Chindran's growth journey. Over the past several years, we have consistently invested in developing new chemistries, expanding our technology capabilities, strengthening manufacturing processes, and building long-term customer relationships. We are now beginning to witness these efforts translating into tangible commercial outcomes across multiple business verticals. What is particularly encouraging is that this process is not being driven by a single product or a single market. Instead, we are seeing positive developments across several strategic businesses simultaneously. The increasing commercial acceptance of our products, the expansion of our opportunity pipeline, and the confidence to undertake fresh capacity investments together reinforce our belief that company is entering a new phase of sustainable growth. While the global business environment continues to witness geopolitical developments and evolving trade dynamics, customer procurement patterns across our key businesses have become significantly more predictable. This provides us with greater visibility and enables us to plan our manufacturing, technology, and capacity expansion initiatives with increased confidence. Let me now take you through the development across our major business segments. Phase transfer catalyst. ETC continues to remain one of the strongest pillars of our portfolio. As industries across the chemical value chain increasingly focus on improving process efficiency, enhancing product selectivity, and adopting more sustainable manufacturing practices, the relevance of phase transfer catalyst chemistry continues to expand across a wide range of applications. Rather than being viewed merely as a catalyst, PTC is increasingly recognized as a process energy and technology of improving manufacturing economics while supporting green work industry. We believe this structure shift in customer preferences will continue to create opportunities for sustainable organic growth and further strengthen our leadership position in this business. Structure directing agents. The outlook for our SDA business continues to strengthen. The implementation of Euro 7 standards has now begun translating into revenue, and there is a very visible customer demand, validating the opportunity that we have been anticipating. We are witnessing encouraging momentum across our customer base, and the overall business environment for this segment is very robust. Considering gradual geographical implementation of Euro 7, we are confident that this business will position To witness a strong demand. Electrolyte source. Our electrolyte source business continue to make a steady progress towards larger commercial scale. The demand of our electrolytes for energy storage device is rapidly increasing, with consumption increasing broadly in line with our expectations. Severe short supply of certain key raw materials due to Middle East crisis led to significant production delays, impacting the revenue recognition for the quarter, and the situation is now gradually getting streamlined in terms of its availability. Equally encouraging is the progress achieved in Vitar hybrid battery customer, whose commercialization program is advancing well and steadily moving towards commercial supply. Coming to pharma, agro, and specialty chemicals. The PASC business has delivered one of its most encouraging quarters from a strategic perspective. The molecules commercialized over the recent quarters are witnessing increasing customer acceptance, resulting in repeat orders and visible improvement in demand. The transition from initial commercialization to recurring procurement is significant, I assume, and it validates both quality of our products and the confidence our customers have reposed in our capabilities. On the pharmaceutical side, I am pleased to share that the commercial production of one of our pharma intermediates commends during the very first quarter itself. We expect demand to strengthen progressively during this course of the year, while additional pharma molecules are also expected to move towards commercialization in the later half of the year. Whereas, the most satisfying outcome of this progress is the confidence it gives us to accelerate the next phase of product development. Several R&D ready molecules with this segment are now entering pilot-scale manufacturing, while development activities for others are already underway. This ensures that even as today's products continue to scale up, the next generation of opportunity is already moving through our innovation pipeline. Coming to semiconductors. I am extremely proud to share that our first batch produced on commercial plant scale was delivered to the customer during this quarter, and this batch has been successfully qualified by the customer. We consider this to be one of C.Tuswitch Engine's glaring achievements of the past decade. The significance of this achievement extends far beyond a single product. It validates our research capabilities, manufacturing excellence, quality systems, and our ability to meet the demanding standards of the global semiconductor industry. More importantly, it opens the road to significant larger opportunities as additional products continue to progress through the customer qualification. While this business will continue to require patience owing to its rigorous validation process, we believe this milestone marks the beginning of a long-term value creation opportunity for the company. In line with the growing opportunities across our business, I am pleased to share that our Board of Directors has today approved the establishment of a new greenfield manufacturing facility involving an investment of approximately Rs.200 crores. We have scheduled the groundbreaking ceremony for this on 20th July, 2026. This investment reflects our confidence in the future rather than merely addressing today's requirements. The proposed facility is being designed as a future-ready manufacturing platform that will support the commercialization of new products, provide greater operational flexibility, and create capacity required for companies' next phase of growth. Our philosophy has been to build capabilities ahead of demand. This project reflects the philosophy and demonstrates our confidence in the opportunities that lie before us. We believe the progress achieved during this quarter represents an important beginning, and we look forward to converting these opportunities into enduring value for all our stakeholders. Before I conclude, I would like to sincerely thank our customers, employees, business partners, and shareholders for their continued trust and unwavering support. This year marks 30 years of Sathwa Chintan, and this milestone belongs to every stakeholder who has been a part of Zhaar Genin. As we enter our fourth decade, we do so with renewed confidence, stronger capabilities, and an unwavering commitment to creating value through innovation, specialized chemistry, and responsible growth. Thank you. I now request the moderator to open the floor for question and answer session.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. This is the first question from the line of Shlok Patel from Zenflow Finance. Please proceed.

Hi, am I audible?

Yes, you are audible.

Yeah, congratulations on the great results. My first question is on PTC segment.

PTC segment did very well this quarter. What led to this growth and can we expect similar numbers in coming quarters?

See, PTC demand is increasing because of the widening acceptability of phase transfer catalyst across the chemical industry. When we started back in 1996, PTC was a very new product. But over the time, chemical industries, I mean, various chemical segments in the industry itself have recognized the benefit of using phase transfer catalyst. So, the acceptability of this is going to go on increasing, and the demand for the steam is going to increase. But the factor in our case is that we have forward integrated the PTC into SDA and electrolyzed salts and solutions also. So, as and when the demand of SDA and the electrolyzed salts and solutions increase, We will be consuming more PTC into those products, and we will be selling less of PTC into market. But at the same time, we will have to cater to our loyal and long-term customers, so we will continue to produce and sell PTCs to the best of our capabilities. Okay, great.

My second question is on PASC.

So, can you give us outlook on the GLIMS which we sell for lithium ion batteries and what are the other molecules we sell in the segment?

No, we do not sell for lithium batteries. We are into, we are not into lithium batteries. And probably the question you are asking is from electrolyte salts and solutions segment and PASC is pharma and agro segment.

Okay.

So, in PPT, it is written that we manufacture GLIMS, which is useless solvent in lithium-ion batteries. So, that's what I was asking.

Which, yeah, you are correct. So, basically, Mono-GLIMS is one of the key products which we are doing on conventional chemistry and converting it into the continuous flow chemistry. By the time, we actually successfully translated this into continuous flow chemistry to make it more sustainable. The environment scenario in terms of pricing has become too aggressive from the Chinese supplies. So we have withheld our plan to invest as of now into the glass capacity addition. So, we continue to produce at a decent scale, using our existing infrastructure in place, and we cater to these demands. So, basically, we have very less exposure to the battery manufacturers, whereas our large customer base, in terms of blinds, we sell into more of parliament.

Okay. Thanks. I'll join back the queue.

Thank you. We take the next question from the line of PATH from Triinitra Asset Managers. Please proceed.

Yes, am I audible?

Yes, you are audible.

Thank you for the opportunity. And my question is, like, what do you see as the biggest

execution risk to achieving your FI27 guidance? Is it customer demand, raw material volatility, or commercialization of new products?

None of them. We don't foresee any obstacles to HR this year's guidance because all the demand from the customers and the segments are quite visible. And I don't think there should be any obstacle in achieving this target.

Okay. Thank you so much for the opportunity.

Thank you. We take the next question from the line of Raman KV from Sequent Investments. Please proceed.

Hello, sir. Can you hear me? Sir, firstly, congratulations on an excellent start to the year. I have a few questions. So, firstly, on the pharma molecule side, which you earlier in the Q4 call, you mentioned that you will be commercializing one molecule in Q1 and two more molecules by Q3N. So, what's the incremental revenue? Do we expect over FI26 from the three new molecules which are commenced during this year? And how much will these molecules scale in the coming FI28 years?

It should contribute around 70 to 80 crores of revenue from all these pharma molecules. And in this current year, current financial year, and gradually it should uptick, gradually it should uptick in next financial year too.

And how much can we expect from like, at full utilization, how much can we expect from this three molecules? 200 crores. In the range of 200 groups. Oh, and my second question is... On the semiconductor side, can you just talk about the product, which or what product are we working on, and where this semiconductor chemical, at what part of the value chain it is used, and if possible, can you also let us know what is the total addressable market opportunity for us in this particular space?

Basically, the application of this product, what we have now commercialized, the first commercial supply that became successful. So, this product has application getting into as a key starting raw materials to make the semiconductor. So, it's a key starting block to make the semiconductor. Parallely, it also has applications in itching of the printed circuit modes as well as in cleaning of the circuits. So, it is being used as itching agent, as a cleaning agent, and also as a key starting block for making the semiconductor. Of course, all these three applications have three variety of... Specifications, out of which the most stringent one is where you use it as a key starting block for making semi-conductor and approval what we have got from this quarter for this is basically for being used as a key starting block for making semi-conductor. So it is the most rigorous specifications among all the three applications and we have successfully met with the specification criteria of the customer. In terms of addressable demand, it is too early right now to wait, but I'm sure it's going to be a very large potential. Again, see, this is my first plant-scale trial. I believe at least three or four such plant-scale trials will happen over the course of next two years, and customer would want to test the consistency. In terms of how we can deliver the product in terms of consistency of quality and all the rest of the parameters and after that we will start talking about commercializing usage. And of course, as you know, any change in semiconductor is extremely difficult. Probably, it's not an easy cakewalk. It's going to be enough time getting into the commercialization and acquiring business. But once we set our footprint into any commercial application, then I think it opens up doors for very large opportunity.

And just a follow-up on this, you said we have received approval for this product. Can you also specify...

Successfully qualified. So this is not successfully qualified by the customer. So this is my first batch coming out from my plant. So a plant scale first batch. And this has now been successfully qualified. So customer has confirmed that your product meets all the desired specifications. So now there will be multiple stages, scale-ups would happen. So today we have just delivered few tons of this product. And it will go to few tens of tons, few hundreds of tons, and then we talk of commercialization.

Can I ask you who is the end client from whom you are getting quality approval? Is it the semiconductor company which makes the starting semiconductor or someone else?

Someone else. Semiconductor companies will never directly buy such things. There are always MNC companies who would end up supplying this to the semiconductor or the fan manufacturer.

Understood. Sir, also you mentioned in the call that there is a 200 crore greenfield CAPEX plan for the year. Can you specify for what product this is, and can you specify what kind of revenue do you expect from this 200 crore CAPEX, and by what timeline this CAPEX will be in place?

We have been working on our R&D products for quite a few years now, and this facility is being built for actually scaling up of those R&D ready products. As well as to meet the domestic demand that is looking at economic development in India, the demand of these chemicals would increase more rampantly in Indian economy. So we would like to cater to the domestic demand too. So this facility is more going to take care of these requirements. And as far as the revenue is concerned, we would be looking at somewhere around 1.2 to 1.5 times asset turnover ratio, which means we would end up having around 300 crores of revenue at peak utilization.

Yeah, I get that. I just want to understand, is it like a farmer or agrochemical intermediate we are working towards, or is it towards the electrolyte side, or is it towards the SDA side, or is it a new category as it varies?

No, no, it's a multi-purpose, multi-product facility that we are setting up. So, it is fungible within the sectors, and basically, We have introduced a lot of new products over the last two, three years. You know, you see these new pharma introductions, new agro introduced products, which is causing now capacity issues. So, and of course, we foresee there is a lot of organic growth that is also going to happen. There would be new molecules that are in pipeline to be introduced in the market. So, just keeping this vision in mind, we are setting up this facility, so that by the time we nearly saturate our Daesh facilities, we have an already infrastructure in place which can cater to these upcoming growth opportunities.

Understood. And so, finally, sir, you guided for 10% revenue contribution from electrolytes salt in FI27. Are we sticking to the guidance? And can you also specify how are we planning to increase the uptick from currently, which is like in the current quarter, it contributed to 6 crores of the revenue? And how are you planning to scale from 6 crores to roughly, let's say, 60 crores, almost 50 to 60 crores.

Between 40 to 60 crores, 7 is what we still hold the guidance. We have enough capacities in place to cater to this demand. We don't have to do anything special to watching this. Now everything is in place, customer demands are very crystal clear, very highly visible. It's just moving about in this zone. Unfortunately, we lost a couple of months due to unavailability of a couple of key raw materials in this space. It just happened because of the wall situation which impacted our productivity. We had to sit idle for a few weeks together. Otherwise, there is no issue, no challenges at our end in terms of infrastructure in place, customer demand in place, clear visibility. I don't see any challenges.

Do we have any specific order book for this in hand?

It is not, never an order book in hand, so it is basically happening on quarter on quarter basis.

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

Thank you. We take the next question from the line of Nirali Koppani from Munich PMS. Please proceed.

Yeah, hi. Thank you for the opportunity and congratulations on very good set of numbers. So, Thindan, the first question is on this revenue growth that you've seen in the quarter. So, what is the contribution from the pricing improvement because last few quarters pricing was an issue? So, still it be volume driven or pricing has improved?

Marginally, so that's not a major impact coming from pricing, a large impact is coming from volume growth, because actually, honestly speaking, we have not been thorough in terms of passing on the increasing cost, that is visible on our margins as well, because that was not an easy, because the price increase was too rampant and came at a very short notice, you know, so it just happened overnight kind of a thing. So, most of this is genuinely a volume growth and not a pricing differential. Now we are pushing for price increase. So now we are translating that we are, so since last, I would say since last 40-60 days now that price pass on has started, customers have started accepting the higher price because you know there is no other way to go. Globally the prices have rise and they have to gradually learn to accept and that's what we are also doing from our raw material supply. So basically the value chain has. The prices on all the fronts have gone up in terms of our incoming raw materials, and now we are pushing the price change in terms of trading our finished goods as well.

Okay, okay, perfect. And second is on the current capacity and on the further capacity. So, currently with our capacity, we can do a peak revenue of 900 crores. Does additional damage capacity available for next year or it's only after this third block comes into the picture?

Well, we are doing some de-bottlenecking stuff. We have one small block where we can do maybe four, five, six, three hectares or stuff like that, but not, not. Something which can really address the growth or the coming up demand. So, in reality, you know, anything beyond this 800, 850, we should have a place already, infrastructure in place to cater to this growth. Otherwise, we'll start kind of getting stagnated. And I foresee that happening from next year itself. So, that is the reason why we are focusing on this Greenfield project to push fast, so theoretically we want to finish it, so theoretically we say we want this site to be in place within, into operations within 21 months. Internally we are pushing to get it through within 18 months if possible. It's a task in itself, but we are pushing hard for that.

Right. So, post this 850 crores will have some new capacity at Jolwa, then at Dahej. And then semiconductor will be the third opportunity.

We are nearly saturated. We have consumed all the piece of parcel of land in Dahej. So, now there is hardly anything. So, very small production block is what is feasible to be made. So, ideally speaking, Dahej is now getting into saturation more in terms of available space. So, any major growth has to happen only from the new site.

Okay. Okay, and semiconductors will be over and above this, right? For that, you are not doing any keep-its at the moment?

Not at the moment. Because we don't, honestly speaking, we don't foresee a major commercialization happening until, at least I would say not before Q4 of 2028. I don't see that it will commercialize in a large volume because it's going to take its own sweet time and very well aware of the process how they qualify. So, I know it's not going to be an overriding. It will take its own sweet time to commercialize.

Right. And lastly, so for this FY27, do we see this quarterly run rate of Q1 being maintained?

We see, yeah, so 25-30% growth is what we forecasted, and that's what we stick to. So, yeah, in pure mathematics terms, we are saying that, yes, we should maintain this 100.

Right. And for the full year, what kind of margin should we work with? EBITDA margins?

As I always say, unfortunately, we have lost one quarter with a little lesser margin, but I would still stick to 20-22% margin. In guidance, yeah.

Okay. Okay. No, perfect. That's it. Thank you so much. Thank you.

Thank you. We take the next question from the line of Gaurav Paul from Zenflow Finance Private Limited. Please proceed.

Hello, am I audible?

Yes, you are audible.

Yes. Hi, sir. Thank you for the great quarter and congratulations to you. My first question is regarding the geopolitical scenario. So, we keep hearing that there is a lot of anti-involution that is happening in China. I mean, Could you give some color on that?

Sorry, I am taking the mission acting in China.

Yeah, I mean, the prizes in China.

Pardon, can I come back?

What is happening in China? The prize, I mean, the government is taking away the VATs or taking away the subsidies that they used to give to industry.

This is still news, but it's not a law. So, if it all happens, it's expected to be in place from January of next year. So, this is what we keep hearing from customers and suppliers both. But let us see as and when it happens. So, most of these subsidies in terms of specialty chemicals or agro-intermediates or parma-intermediates is expected to go on. So that would of course push. So that would be in terms of Sattva Jinton per se within the chemical space. Companies like Sattva Jinton should see some benefit deriving out of this change. But it is too early to predict and you never know what the China is going to do. So let us wait and watch and not speculate on that.

Got it, sir. The second question is regarding the lithium-ion manufacturing momentum in India. Now, your salts are getting used in the electrolyte, I assume, right?

But electrolyte of different types of batteries, not in lithium batteries.

Okay. So, do we have any solutions also for lithium batteries? We don't, no. Okay, yeah, that's one from us.

So, basically, we have solution in the zinc battery solutions, in the supercapacitor battery solutions, but nothing to do with the lithium batteries.

Okay, okay, understood. Thank you.

Thank you. We take the next question from the line of Sarang Besai from Tamhora. Please proceed.

No. Audible.

Hello.

Yes. Hello. Am I audible?

Yes, yes.

Yes, sir, my question is on the front of the SDA vertical. So, since according to the past trajectory, when China was our biggest customer when it comes to SDA, and the diesel truck sales in China is continuously being replaced by the EV demand and hybrid demand. So, with the Euro 7 coming in, so do we see tapping markets in the Europe? Because the European diesel sales is still higher than the Chinese market. So, I mean, just wanted to understand the geographical. The geographical segmentation with the Euro 7, with respect to the HDA.

Euro 7 is, right now, is only being implemented across Europe. So, it eventually has to go to US, go to Japan, China, India. So, it will happen over the next 3, 4, 5 years time frame. As, yes, what you said about China is absolutely true. So, lot of demand of diesel trucks went to the gas. Gradually, what I understand is, gradually there is a very slow uptake in terms of diesel engines, but in terms of passenger vehicles, lot of demand is already going to the EV side, right? So, this is going to go out of purview of using SDA application in that area. But the real demand is not passenger vehicles, but it is from the large diesel engines. For the rest of the world, yes, the demand is growing rapidly, so that is a good part what we foresee. And Chinese demand is yet to pick up, so there is not really any uptick in terms of demand coming in from China. The rest of the globe, the demand is becoming stronger and stronger going on. As we move towards Euro 7, shift gradually, it will happen geographically, that will translate into stronger demand for Tertwa as well, because with Euro 6, we had certain geographical limitations in terms of sales, which goes away with Euro 7, so that will be an added benefit for us in terms of growing our market share.

Okay, okay. And my next question was on the ESS vertical. So, like, we had an earlier concourse discussion regarding, we have some, you know, large volume orders from hybrid vehicle batteries, one of the customers.

Hybrid vehicle batteries customer is into the process of commercialization. So, it's now just beginning to get into commercialization phase. So, this should happen from October or November of this year.

Okay, but like the Rantop ESS that we are looking after is on the basis of hybrid vehicle batteries, which will come after October, right? I mean, the major part of the Rantop.

And then that actual commercialization, so full-scale commercialization of the hybrid systems is expected to happen somewhere in 2020, late 2027. So one year would be, so they are just initiating their battery manufacturing plant now. So it's going to take a while for them to stabilize and to achieve one year.

Okay, okay. Thank you so much. That's it from my side. Thank you.

Thank you. We take the next question from the line of Rohit. From Progressive Shares, please proceed.

Hi, Siddhartha, a couple of questions. First one on the continuous flow chemistry. How many of these commercial molecules that we have are currently using continuous flow chemistry? Two products. And in the next three years or so, how many more do you think can be added?

Now, majority of the development what we are doing, so it may not be in all stages of a product, but what I see is, let us say, about seven or eight products in near future getting into commercial phase or piloting phase. All of these products either have electrochemistry or continuous flow chemistry.

When these products probably move from batch to continuous, what sort of improvement do we see, do we see it in the year or the manufacturing time or is it the return on capital that is altered?

On all the fronts you see improvements in terms of your productivity going up, in terms of your cost coming down. In terms of certain, basically, certain chemistries, you are able to reduce the number of stages of chemistry. For example, the two-stage product, you can do it in one single stage. So, you have a lot of bandwidth that you create. So, as we move, so what we are now currently doing is our existing products, you know, what we are already doing. On conventional chemistry basis. So now we have started focusing on how we can move from a conventional chemistry to a flow chemistry. So this is what in one of the earlier questions I talked about trying to do certain de-bottlenecking of the plant and, you know, trying to optimize how we can generate larger revenue from the existing infrastructure. So these are some of the areas where we are focusing to shift. And working on moving the products from batch mode to continuous flow mode, which can release some of our reactor capacity and give us larger revenue from the existing product. Continuous flow is our core focus as of now.

If this chemistry has got such a big mode, do you think that the competitors will be able to replicate it over a period of time?

See, if tattwa can do, I don't believe someone else cannot do. So, it's just about, you know, I mean, it's... If we say we are a very small company, if you see within the chemical segment, then potentially we are the smallest player within the segment, whom you all know the rest of the company. If we can do answer with given dedication or a given vision, any one of them can crack this. It's not a big challenge. Of course, you have to remain behind it, stay focused and keep investing behind this because it takes time.

Okay.

Okay, on this…

The conventional is always faster and easy.

So, it has its pros, but it also has lots of cons. So, it's…yeah.

Makes sense. On this new reactor capacity, which product category do you think will consume most of this reactor capacity?

Is it the existing products,

new products, or will you be looking at contract management for some reason?

Both. So, we are, as I said, we are also right now focusing on converting some of our existing products from conventional to continuous. And as I said, among the eight products, what I foresee as the next getting into commercial stages, either piloting or commercialization. Each of these products has, in either of the stages of products, it has continuous flow. Thank you.

You don't have any vision or any wish to go for contract manufacturing for some customer or some client or something of that sort?

As far as, you see, we have a lot of things in pipelines, so I don't see that... Something is stopping me from doing my own organic growth, right? So we have, we are not nearing saturation in terms of our ideas of growth. So as far as we see that there is a lot of potential we can generate from our own resources and from our own contacts and from our own capabilities. Till that point in time, I don't see that we want to go and do contract manufacturing or stuff like that.

But for this new capacity, do you have some commitment made from some of the customers? Are you discussing with it or is there some talk before commissioning?

Of course, of course, we do. So there may not be a contract, official contract in place, but there is of course some submitment from a customer, you know, that yes, this is what is of our interest, and if you are able to crack this in a different way, then yes, we are the first one to come and buy it from you.

In the next three years, what sort of revenue growth is currently visible that you feel that, you know, these new products or the already existing one or the ones which are under the qualification, these can produce? What is the revenue growth that you see? Is it 25%, 30%, 25% growth on a CAGR basis?

So over the next three to four years, if you let us speak, because Joel was getting commercial, so let us say about coming four years from today. We should envisage at least 20% to 25% compounded growth here on your basis.

And anything on the minimum acceptable post tax, ROIC, if you have that calculated or have any rough work that has been done on that?

We are working on that. So, basically, we are targeting to cross. See, basically what the way we do it is some of these chemistries what we have done in last few years. First of all, phase transfer catalysts, SBAs, electrolytes, salts, so these were certain chemistries where our effect on ratio was very high. Then we started getting into this multi-stage chemistries, pharma intermediates, agro intermediates, even the next stages of developmental growth is going to come from this kind of intermediates of pharma and agro. So these are again multi-stage chemistries, so your asset turn ratio has started getting disturbed, right? So now when we talk, we say, okay, asset turn ratio of 1.5, we are very happy. Right, and when we were talking of the earlier three product ranges, we were talking of asset foundation of 1 to 3. So the ballgame has changed. But when we talk of ROC, we looked at about 20-22% should be a decent achievement, and that is what we are focusing to in that direction.

Okay, Chintan, I thank you for answering my question. Thanks a lot.

So, the next question is from the line of Ketan, Cheta, an individual investor. Please proceed.

Hi, thank you for the opportunity and congratulations on good results. My first question is with respect to Monoglyme, I think one of the earlier participants tried to question that. So my question is, at one point in time, we were installing capacities for manufacturing Monoglyme and we were targeting to manufacture about 2000 tons or something of that sort. So could you just update what is the status on that? Are we producing, not producing? Did we install those equipments?

We did install the equipment to produce monoglym, which now we have converted to use for a different product. So that product is the electrolyte for supercapacitor batteries. So we produce the raw material of that from that equipment now. The reason why we moved a step back from Monoglime is a terrible price drop that happened from China. 4.6, 4.7, 4.8 dollars roughly. In that price range, the product price dropped from there to 2.1 dollars. It just happened within 30 days time when they dropped the prices. Now again, we see the price is going up to 33.5, but Right now, we are honestly not very keen on getting into a large scale. So, we do a few hundred tons of this product, but we continue to use our conventional chemistry in that place. Whereas the continuous flow equipment, what we installed, we have put to use for a different product now.

Okay, okay. And we also had one product which was flame retardant, and I think you had a similar experience there as well, that, you know, the economics was not very favorable by the time we ended up developing and were ready to manufacture. So, any update on that flame retardant? No, it still continues to remain in such situation.

Basically, it is radically connected to the polymer industry. Still, the situation, there is not much reversal in the situation.

Okay, all right.

So, we are not getting into commercialization of those products in very near future for sure. Sure, right.

The other question I have is with respect to our foray into these semiconductor chemicals. So, right now, we are going ahead, you mentioned about, you know, three-year applications, and you have kind of, you know, initially qualified for one of the stringent, the most strictest qualification criteria. Do we have other products in the pipeline for the same sector, or we are kind of yet to start developing?

Currently, we have five products on pipeline. So, one of these is now produced from the plant scale. We have another one produced from pilot scale, which is currently under evaluation from the customer side. We have two other products, three other products, which are in the development phase. So totally we are working on five different products in this space. Okay. Okay, sure.

And as of now, in our pipeline, the products that may be at lab scale or maybe pilot scale, could you give us a number across all your different segments? How many products are there?

In virtual pipeline, we have about nine different products. And the semiconductor products I am not including because these are long-term, so it's not going to happen before 2020. So, what we will commercialize before 2028, we are looking into 8 or 9 different products, which are now mature.

Okay, okay. Yeah, those were my questions. Thank you for answering them, and I wish you all the best.

Thanks.

Thank you. Ladies and gentlemen, due to time constraints, we take that as the last question and would now like to hand the conference over to the management for closing comments. Over to you, sir.

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

Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.