20 Microns Limited (20MICRONS) Q2 2027 Earnings Call Transcript

Good afternoon, everyone, and welcome to the Q2 and H1 FY27 Earnings Conference Call of 20 Microns Limited, hosted by Wisdom IR. I am Muthu from Wisdom IR and I will be your moderator today. Thank you for taking the time to join us. We are pleased to have with us from the management of 20 Microns: Mr. Atil Parikh, Chief Executive Officer and Managing Director; Mr. Nihad Baluch, Group Chief Financial Officer; and Mr. Praneet Shah, Senior Finance Controller. The results for the quarter and the investor presentation were filed with the stock exchanges earlier and are also available on the company’s website. A few points before we begin: this call is being recorded. The recording will be posted on the company’s website shortly after the call and the transcript will follow in due course. All participants will be in listen-only mode during the opening remarks. The question-and-answer session will follow, and I will explain how to ask a question at that point. If you would like to type a question in the meantime, you may post it in the chat box.

Please note that some statements on today’s call may be forward-looking. They are based on management’s current expectations and are subject to risks and uncertainties, so actual results may differ materially. The Company does not undertake to update these statements publicly in light of later developments. The call will open with remarks from Mr. Atil Parikh on the Company’s business and strategy, followed by Mr. Nihad Baluch on the financial performance and CapEx progress. We will then move to questions. With that, I would like to hand over to Mr. Atil Parikh. Over to you, Sir.

MANAGEMENT COMMENTARY – BUSINESS & STRATEGY Atil Parikh (CEO & Managing Director) [2:43] Good evening everyone and thank you for joining us. Our CFO, Nihad Baluch, will take you through the numbers in detail after my remarks, so I will not repeat them. Instead, I want to use these few minutes to step back and talk about the kind of company 20 Microns has become and where we are taking it. Let me start with one line from this half. Revenue growth returned in the second quarter and our gross margin for the half rose by about 80 basis points. That margin did not come from price alone. It came from a richer product mix. More of what we sell today is engineered, specified and harder to replace. Over the last several quarters, we have made some deliberate choices. Where the customer wanted only the lowest price per tonne, we were willing to step back. We used that capacity and our team’s time to create higher-value grades, many of which take years to get approved. Some of that work is now slowly turning into business, and that is what I would like to explain. I would request a few minutes of your time on our business model, because I believe it is still not fully understood by many investors. We are often grouped with mining or commodity companies. I understand why – our raw material is a natural mineral – but what we sell is very different. A commodity producer mines, crushes and ships a few standard grades, widely available in the market, at the lowest delivered price. At 20 Microns, our customers do not come to us for catalogue products only. They come to us with a problem: a performance gap, an import-dependent product, or a formulation cost they need to bring down. We take a mineral and change what it does in their product. We use mechanical, thermal and chemical surface engineering for opacity, strength, flow, gloss and many other properties. Three things make this business durable. First, we are specified into our customers’ formulations. A new grade typically takes anywhere from three to ten years to move from the first brief to commercial supply. A leading FMCG company is only now moving into commercial supply after nearly ten years of trials with us. Once approved, a grade is rarely replaced, because changing it means re-qualifying the customer’s own products. That is why many of our relationships with India’s largest paints, polymers, rubber, ink and other customers go back 10 to 25 years. Second, we are moving steadily up the value curve. Functional additives – more than 250 specialised grades that we already carry in our portfolio – contribute about one quarter of our revenue. They are priced on the performance they deliver, not per tonne. Paints remains our largest market, but the market beyond paints – led by polymers, cables, rubber, inks, ceramics, agrochemicals and construction chemicals – now accounts for more than half of what we sell. This year alone, we showcased new products at Paint India, Plast India and the India Rubber Expo.

Third, innovation is our engine. Our DSIR-recognised R&D centre in Vadodara has a team of more than 35 scientists and engineers. Four new products were commercialised in FY26, each solving a specific customer problem, several of them replacing imports. The proof is in the consistency. Through a pandemic, supply-chain disruptions and sharp swings in energy and freight costs, our EBITDA margins have stayed between 12% and 14% year after year for over a decade. A commodity business does not typically behave that way. So where do we go from here? Our priorities are quite clear and we are executing them step by step. Our ₹100 crore capacity programme is under way. About ₹30 crores have already been deployed and we expect to reach nearly half by the end of this quarter, funded through internal accruals and selective debt. This quarter, we acquired captive mines in Rajasthan and Andhra Pradesh. Captive talc will also start from December. Mineral policies can change at short notice; owning more of our supply makes us a more reliable partner to our customers. Energy and freight weighed on margins this half, as Nihad will explain. Our upcoming 9 MW captive solar plant, due for commissioning in the fourth quarter of this year, will meet about 40% of our power needs, and we estimate an annual EBITDA benefit of around ₹8 crores. We are building in personal care, oil and gas, and construction chemicals through our joint venture, and in longer-term materials such as high-purity quartz. Some of these are early, and we will speak about them as and when they mature. The direction we set out with our FY26 results has not changed: a steadily rising share of specialty products, stronger margins and better return on capital. The building blocks are capacity, captive raw materials, lower energy cost and a maturing pipeline of approvals. These are being put in place now, and we will report progress on each of them as we go forward. Our priorities for the second half are simple: recovering our operating margins through pricing and efficiency, and delivering the CapEx on schedule. To sum up, 20 Microns today is a specialty mineral solutions partner built on surface engineering, customer-specific grades and long relationships. The foundations for our next phase are being laid now – in capacity, in raw materials and in innovation. We will keep our discipline on margins and the balance sheet as we build them. We know that trust is earned one quarter at a time, and we intend to keep earning it quarter after quarter. The deck we have shared walks through each of these points in more detail, and I would encourage you to spend some time with it. With that, I will hand over to Nihad to take you through the results. Thank you.

MANAGEMENT COMMENTARY – FINANCIAL PERFORMANCE & CAPEX Nihad Baluch (Group CFO) [9:03] Thank you, Atil Sir. Good afternoon everyone. I am pleased to take you through our financial performance for the quarter of financial year 2027. Let me begin with revenue. Our consolidated revenue from operations for Q2 FY27 stood at ₹238.16 crores, a year-on-year growth of 3.2% over ₹230.78 crores in Q2 FY26. This marks a return to year-on-year growth in the second quarter and reflects improving business momentum. On a sequential basis, revenue was ₹238.16 crores compared to ₹244.72 crores in Q1 FY27.

On gross profitability, we maintained a healthy gross profit margin of 47.7% in Q2 FY27, broadly stable against 47.6% in Q2 FY26 comparing Year on year, the stability reflects the benefit of product mix and raw-material utilisation, even as the operating environment continued to see cost pressures. Our EBITDA for Q2 FY27 was ₹27.73 crores. While this was lower than ₹31.85 crores in Q2 FY26 and ₹35.87 crores in Q1 FY27, we continue to operate with a double-digit EBITDA margin of 11.6%. The quarter’s operating performance was impacted by higher power and fuel costs, export freight expenses and some increase in employee costs as we strengthen our teams in preparation for our planned capacity. Finance cost remained well controlled on a year-on-year basis, declining 5.6% to ₹4.20 crores from ₹4.45 crores in Q2 FY26. Compared to Q1 FY27, finance cost was ₹3.91 crores, reflecting the timing and level of borrowing during the quarter. Our PBT stood at ₹19.20 crores and PAT at ₹13.64 crores. These were below the corresponding prior-year quarter and the immediately preceding quarter, in line with the moderation in operating profitability. Let me now update you on our ₹100 crore CapEx programme. So far, we have deployed around 30% of the programme. This includes ₹12 crores on captive solar and ₹7 crores on the two mining acquisitions. In the current quarter, we expect to deploy a further ₹17 crores, all of it on solar. That will take us to nearly half of the programme by Q3. The CapEx programme is being funded through internal accruals and selective debt, in a phase-wise manner over 24 months. I would like to give you a brief solar update, because it links directly to the margin discussion. We are building 9 MW of captive solar capacity across two plants – 5.5 MW in Rajasthan and 3.5 MW in Gujarat. The total investment is about ₹29 crores and we are targeting commissioning in the fourth quarter of this financial year. Once running, solar should meet about 40% of our power needs. We estimate an annual EBITDA benefit of around ₹8 crores – to put it into context, roughly 80 basis points of EBITDA margin. Energy was our single biggest cost headwind in this half; this project addresses it structurally rather than leaving us exposed to fuel prices every year. It also lowers our carbon footprint, which matters more and more to our customers. The mining acquisitions serve a similar purpose on the raw-material side. Our new talc mine in Andhra Pradesh and our quartz and feldspar mine in Rajasthan are expected to begin production from December 2026. They give us more control over the supply and cost of key minerals. The balance of the programme will go into capacity for specialty and value-added products in a phase-wise manner. Several of the actions I described should start to show in the numbers over the coming months: inventory normalising and cash flow catching up with profits. With both mines starting production from December and the solar plants commissioning in Q4, the full-year benefit will come from FY28. As with all CapEx, these timelines and benefits are management estimates, and we will update you on progress every quarter. From a financial management perspective, our focus remains on translating the improvement in revenue momentum and stable gross margins into stronger operating performance. We are working on tighter control over energy and freight costs, alongside continued product-mix improvements, operating efficiencies and disciplined cost management. We believe these actions, together with the capacity and capability investments under way, will support the next phase of growth. We will remain focused on profitable growth, cash generation and prudent financial management.

To summarise: revenue growth is back, and we expect to see it continue in H2. Gross margins are expanding year on year, and the balance sheet is stronger with better cash flow. We are taking specific steps on the costs that weighed on this half, and the solar project gives us a structural answer on energy from the fourth quarter. With that, I’ll hand back to Mr. Muthu and Atil Sir, and I’ll be happy to take your questions. Thank you.

QUESTION & ANSWER SESSION Moderator (Wisdom IR) [15:53] Thank you, Sir. We will now begin the question-and-answer session. If you would like to ask a question, please use the raise-hand option and we will unmute you in turn. When you are unmuted, please introduce yourself and the organisation you represent, and then go ahead with your question. So that as many participants as possible get a chance, we request you to keep to two questions at a time. You are welcome to rejoin the queue for follow-ups. You may also type your questions in the chat box and we will take them during the session. The floor is now open for questions. There is already a question from Harshit Khadka. I’m enabling the audio so that you can ask the question directly. Please go ahead, Sir. … While we wait, I think Kavya has also raised a question. Kavya Varma, I’m enabling your audio – please ask your question directly to the management. … Kavya Varma, are you able to ask the question? … Harshit is also there. Harshit, please go ahead. Harshit Khadka (Participant) [17:27] Yes, yes. Thank you for the opportunity. Am I audible? Moderator (Wisdom IR) [17:32] Yes, you can go ahead. Harshit Khadka (Participant) [17:34] Thank you, Sir. You said we will see improved revenue numbers in H2. I wanted to understand the outlook for FY27 revenue and margins. Also, could you clarify the 18% year-on-year growth you mentioned after the CapEx happens – when exactly does it start, and over what base? Atil Parikh (CEO & Managing Director) [17:56] Mr. Nihad has already briefed you about the CapEx plan, which is in place, and we are already 30% of the way there. The remaining 70% should be deployed within the next 15 to 18 months, depending on the projects we have already identified and started to work on. The 18% CAGR is definitely in place with the projects and the mining reserves we have started to acquire. Given the unpredictability in the current situation, which will hopefully smooth out in the coming quarters, that should help us regain the CAGR we have anticipated over the next two to three years. Harshit Khadka (Participant) [18:56] All right, Sir. Do you have any broad range of numbers you can share? Atil Parikh (CEO & Managing Director) [18:58] No, we are not able to as of now, because of the current situation in the markets. It is quite unpredictable, and costs are also difficult to project. So we cannot put out a specific figure, but it will definitely be better than H1, for sure.

Harshit Khadka (Participant) [19:19] All right, Sir, thank you. All the best. Atil Parikh (CEO & Managing Director) [19:22] Thank you. Moderator (Wisdom IR) [19:25] Kavya Varma, you can ask your question now. Kavya Varma (AVP, Buy-side Research) [19:28] Yes – can you hear me? Moderator (Wisdom IR) [19:30] Yes, we can. Sure. Kavya Varma (AVP, Buy-side Research) [19:32] Hi, I’m Kavya. I’m an AVP at Apricus Wealth, handling buy-side research. I have two questions. Firstly, going through the presentation, three-fourths of our revenue comes from leading companies in paints, polymers, pipes, etc. These companies have been delivering pretty good performances, whereas our sales growth is not in line with those numbers. Can you give us some insight into why there is this deviation? Is there a lag, or is it something I’m not understanding? That would be my first question. I can give my second question as well, or you can answer this first. Atil Parikh (CEO & Managing Director) [20:24] When you directly correlate our customers’ financials with 20 Microns’ financials, it doesn’t give a direct comparison. Most of our end customers have shown double-digit growth because of the price increases they have taken in the retail market. We are a B2B business, and we cannot pass on the same level of price increase that they have claimed from the market. So it differs on a case-by-case basis. Product mixes keep changing across quarters in terms of what they manufacture, and that drives overall demand from the customer end. For example, we have grown in double digits with polymer, rubber and constructionchemical customers this quarter, but with paint customers we have not grown, because demand has been quite subdued. When their Q2 results come out, you’ll see they have raised prices three times in the last six months, but their margins have been squeezed. That explains the overall picture. Kavya Varma (AVP, Buy-side Research) [21:51] OK. Going forward, do we expect revisions in our contracts – maybe not spot – to pass through those benefits? Atil Parikh (CEO & Managing Director) [21:58] It’s an ongoing process. If there are very exceptional hikes in power, fuel or certain products, we definitely work with customers very closely. But for products where there is very stiff competition and competitors are not increasing prices, it becomes quite difficult for us to increase them. So again, it is very much case by case, across different segments and different customers. That’s how it works. Kavya Varma (AVP, Buy-side Research) [22:34] OK, thank you, that’s really helpful. My second question: considering where the company’s valuation is right now, and with tax laws making buybacks a better option, are there any plans to pursue buybacks in

lieu of dividends, or a combination of both? Also, are there any plans for the promoters to increase their stake? Any such conversations at the board? Atil Parikh (CEO & Managing Director) [22:59] A promoter stake increase is definitely discussed on a regular basis in the company. There are quite a lot of priorities in terms of different projects and strategic initiatives we plan to take in the future. So this is one of the areas we will be looking into, moving step by step closer to increasing our stake in the near future. But there are no plans for a buyback as of now. We are always working on different options to analyse what works best for the company, and if anything like that comes up, it will definitely be informed through the stock exchanges. Kavya Varma (AVP, Buy-side Research) [23:44] Perfect. If I can squeeze in one more – or if time is a constraint, I’ll pass. Moderator (Wisdom IR) [23:48] Yes, please go ahead. Kavya Varma (AVP, Buy-side Research) [23:49] Going through the presentation, we can see that value-added products contribute about one-third of your revenue. Any insight on when they start contributing to margins, and how do you see this percentage by FY29? Atil Parikh (CEO & Managing Director) [24:04] The specialty products have already started to contribute to margins. You have to look at 20 Microns on a consolidated basis – if you look at 20 Microns Nano as an individual company, it has grown in double digits this quarter and its profitability has also increased. But raw-material cost has been significantly higher, and due to that we have taken a small hit. Once the raw-material cost and freight cost stabilise and the supply chain is under control, value-added products will definitely give us better margins. Kavya Varma (AVP, Buy-side Research) [24:54] Got it. Also on raw-material cost – on the last call you mentioned that 30% of your requirement is met by captive mines, and you are acquiring more mines. By FY29, where do you see this percentage, from 30% now? That should also help with raw-material cost, right? Atil Parikh (CEO & Managing Director) [25:16] Yes, but there are two factors at play. There are imported products, and international mines we will be bringing material from, so the supply chain plays a major role and adds to the cost. For the local domestic mines, once all of them are active – and we still have a few more mines under discussion – we will be able to give you a better idea of the total cost. Kavya Varma (AVP, Buy-side Research) [25:49] Got it. Thank you, and all the best for the future. See you next quarter. Moderator (Wisdom IR) [25:53] Thanks, Kavya. I’ll now take some questions from the chat box. The first is from Amit Bhaiya, who has put up three questions. I’m reading the first one: “The deck says H1 EBITDA absorbed higher energy and freight costs. What was the year-on-year increase in power and fuel and in freight, in rupees, for H1?” And

the follow-up: “For the ₹8 crore solar benefit, at what grid tariff net of O&M, and is the full run-rate in FY28?” Nihad Baluch (Group CFO) [26:28] There are two parts; I’ll answer the first one first and explain how furnace oil, energy and freight costs have impacted us. In Q1, the furnace oil rate was around ₹42 per kg, and it has risen to ₹56 per kg – a rise of about 33%, an impact of ₹1.34 crores. Gas has risen from ₹69 to ₹122 per kg, around 77%, an impact of ₹0.62 crores. Freight per metric tonne has gone from ₹2,108 to ₹2,346, an 11% rise, an impact of around ₹2.92 crores. That is the major reason. The total impact is around ₹4.78 crores, about 200 bps of consolidated EBITDA. If we exclude that, our margin would have been 13.8%, compared to Q1. Now the solar question – let me repeat it: “For the ₹8 crore solar benefit, at what grid tariff net of O&M, and is the full run-rate in FY28?” We reduce the tariff to around ₹3.45–3.5 [as heard]. That is how the economics will work, and based on that we expect a benefit of around ₹8 crores per year from FY29 [as heard]. Moderator (Wisdom IR) [28:19] I’m taking one question from Janish Shah: “Please give some colour on market conditions and growth in H1 and H2. Is the 18% CAGR targeted from FY27 or FY28 onwards, and does the 200–250 basis points of margin expansion include the benefit from solar power? Also, give some colour on the products in which the company is creating capacities.” Atil Parikh (CEO & Managing Director) [28:50] I think I’ve already answered the first part of the question with Kavya, who asked the same thing, so I won’t repeat it. In terms of product expansion, we are increasing our capacities on a regular basis in calcium carbonate. We are working on more specialised and engineered kaolins. We are increasing our capacities in talc. We are also increasing our nano-related capacities – the functional additives that we were producing at a smaller scale – given the conversions we are seeing with customers and the demand coming in from industry. So it’s a mix of different product capacities that we are building over the next two to three years, which should eventually lead to expansion in both the top line and margins. Thank you. Moderator (Moderator, Wisdom IR) [29:52] There’s a question from Manish Kela, a financial question: “What impacted our margins in Q2, and do we see any impact in Q3 and Q4?” Atil Parikh (CEO & Managing Director) [30:04] Q2 margins have already been covered in my speech as well as Nihad’s, regarding energy and freight costs, and Nihad explained it in more detail in the last answer. For Q3 and Q4, as I mentioned, it is very hard to predict – not only for us but for all industries – given the ongoing supply-chain disruptions, the wars and the upcoming midterm elections. We don’t know what’s ahead, so it’s a wait-and-watch situation; we hope things don’t get worse. But if it continues as in Q2, we would hopefully deliver similar to better results in H2 this year. Moderator (Wisdom IR) [30:56] The follow-up question from Manish: “Do we see any opportunities from new-age sectors like defence, semiconductors, data centres or space?”

Atil Parikh (CEO & Managing Director) [31:08] Yes, we have already started to work on certain advanced materials. If you look at our presentation when you get time, it touches on graphite as one of the areas we have started to work on and produce internally on a small scale, and we are exploring many options beyond natural graphite that go into these sectors. Apart from that, 20 Microns has placed its bid in the PLI scheme launched by the Government of India for rare-earth permanent magnets (REPM), in which 20 bidders participated. This is a very crucial product used across all these sectors. We await the results of the bidding, hopefully in the next couple of months, as to whether we get allotted or not. If not, we have plans to do it ourselves, since we are working towards the REPM technology. Simultaneously, we are working on certain high-purity quartz products used in semiconductor manufacturing. So yes, we have a few products in the pipeline. In the next two to three years, once the industry starts shaping up and producing these products in India, we will be able to supply these materials, if things are on track with these projects. Moderator (Wisdom IR) [32:59] There’s a question from Hardik K: “Are we facing issues in imports, and how much does freight cost impact margins? Please provide details about rare-earth and products relating to semiconductors, EV and solar – when will they be in commercial production, and what are the revenue expectations?” Atil Parikh (CEO & Managing Director) [33:23] I have just answered the second part, so I won’t repeat it. The projects are in the pipeline, and we cannot share commercial-production timelines or revenue expectations because they are government-linked projects. Until we hear back on the scheme, we will not be able to comment. On the first part – yes, rawmaterial pricing and freight cost have significantly impacted 20 Microns because of our import-related cost structure, with dollar pricing going up along with freight from all the countries we import from. So that has been a significant portion. On the exact quantum, we can get back to you, and my team will route it through. Moderator (Wisdom IR) [34:17] There’s a follow-up question from Amit Bhaiya: “Of the ₹30 crores deployed, ₹19 crores is solar and mines, and in Q3 ₹17 crores is all solar. When does spending on specialty capacity and Malaysia start, and what revenue does it add in FY28?” Atil Parikh (CEO & Managing Director) [34:43] Nihad, do you think you can take that question? Nihad Baluch (Group CFO) [34:52] Yes. Could you please repeat the question? Moderator (Wisdom IR) [34:55] Of the ₹30 crores deployed, ₹19 crores is solar and mines, and in Q3 ₹17 crores is all solar. When does spending on specialty capacity and Malaysia start, and what revenue does it add in FY28? Nihad Baluch (Group CFO) [35:10] Our primary focus was to protect EBITDA and get to around 118 bps of EBITDA margin improvement [as heard]. The prime focus was on renewables, which will directly give us about 80 basis points in EBITDA margin – that was our priority. On the Malaysia project, it is already ongoing. We are working on the

quarry part, raising capacity from 4,000 MT to 8,000 MT, which we expect to achieve by FY29, and by FY30 the plant should also commence. There are certain more opportunities coming our way, which we will inform you about in the next quarter, which should give us a better EBITDA structure with margin stability. Moderator ( Wisdom IR) [36:21] A question from Janish Shah: “Can you please quantify the additional cost spent on power and freight in H1? How much are imports as a percentage of sales now, and from which regions are they sourced?” Nihad Baluch (Group CFO) [36:30] We have already given the answer on power and freight. Imports are around 40% of total material. The countries we import from currently are basically China, Malaysia and Vietnam. Moderator (Wisdom IR) [37:05] A question from Ashwin Reddy: “Can you talk about Minford? While it is a small part of our business, and I understand the raw materials are a by-product for you, how does it fit into your broader strategy? Is it a distraction considering the other ambitious plans you currently have? Could you talk a bit more about your vision for the company for the next five years?” Atil Parikh (CEO & Managing Director) [37:28] Minford is a very dear part of the portfolio of the 20 Microns group, because it is something we have nurtured through the by-products of 20 Microns, building a whole new area of mineral-based fertilisers, which is relatively new in India, mainly for organic farming. We have been focusing on farmland, and now the focus is also on urban gardens – households, residential and resort gardens, and other similar areas. We are developing a whole new range of products, because a lot of demand is coming in for newer-age products for soil, fruits, vegetables and other areas, with interest not only from India but from other parts of the world as well. Our focus is currently predominantly on India and some parts of Africa, where we have already started to export. We are also working on licensing in certain states within the country, which is a slow and steady process. So it is definitely part of the 20 Microns family, but we do not think it is a burden on 20 Microns, considering the wide range of products we cater to and our future goals. We see good demand growth in this sector and it is growing substantially, though it contributes very little to the overall revenue of 20 Microns. Moderator (Wisdom IR) [39:20] There’s a question that Shubham wants to ask. I have just enabled his audio. Shubham, can you ask your question directly to the management? Shubham Sahani (RSPN Ventures) [39:35] Yeah – am I audible now? Moderator (Wisdom IR) [39:37] Yes, yes, Shubham. Please introduce yourself. Shubham Sahani (RSPN Ventures) [39:39] Thank you for the opportunity. I’m Shubham Sahani from RSPN Ventures. First, I wanted to know the current order book, any additions you are planning this year, and how much of that value you expect to realise in this financial year.

Atil Parikh (CEO & Managing Director) [40:01] We usually don’t work on order books. With customers, we have a fixed volume on a quarterly basis, defined by the customers depending on market conditions, demand and their production requirements. It continues to remain the same in Q3 as of now and will continue to grow in Q4. As you’ve seen from the trends over the last few years, Q4 is usually one of the strongest quarters for 20 Microns and across the industries we cater to. So it will continue to grow in the same fashion. Shubham Sahani (RSPN Ventures) [40:42] So do we have any quarterly visibility for Q3? Atil Parikh (CEO & Managing Director) [40:47] I would say it continues to run the same way as Q2, because of certain impacts from the festival season, which starts from next week. It’s only after the festival season that we will see the uptick in demand. Shubham Sahani (RSPN Ventures) [41:10] OK. Secondly, as you said in your opening comments, you are very different from a commodity company and sell value-added products. Could you help me understand that better by giving the major segments of revenue and the margins in those segments – say, paints as one segment? Atil Parikh (CEO & Managing Director) [41:35] All the segments – paints, polymers, rubber, construction chemicals, oil and gas, cosmetics, oral care, petrochemicals – have a certain allocation of value-added products. I wouldn’t say 100% of the products going into these segments are value-added, but they definitely have some component, and the shift is towards value-added. We work on these products in terms of how they can be incorporated into formulations to reduce customers’ costs. That is the goal. Shubham Sahani (RSPN Ventures) [42:15] Could you give me a revenue-wise split of these? Atil Parikh (CEO & Managing Director) [42:17] For that, you will have to get in touch with the IR agency, and they will forward your question to us for the particular breakup. Shubham Sahani (RSPN Ventures) [42:26] OK. And lastly, how much of your raw material do you import versus source locally? Atil Parikh (CEO & Managing Director) [42:31] 40% is imported and 60% is local. Shubham Sahani (RSPN Ventures) [42:34] And you see better costing on the locally sourced materials – is that right? Atil Parikh (CEO & Managing Director) [42:41] Sorry? Shubham Sahani (RSPN Ventures) [42:42] You get better cost margins on the locally sourced products?

Atil Parikh (CEO & Managing Director) [42:47] It doesn’t work that way. Different sets of products come in through imports, and different sets are locally sourced or locally mined, so there is no comparison between what works better, imported or local. They are mostly different products. Shubham Sahani (RSPN Ventures) [43:07] One last thing – regarding the acquisitions of captive mines and one more company: do you plan to use all of these mines’ output in your own operations, or will you sell it? Atil Parikh (CEO & Managing Director) [43:20] No, it will be used by us ourselves. Shubham Sahani (RSPN Ventures) [43:23] Great, great. Thank you so much and all the best. Atil Parikh (CEO & Managing Director) [43:26] Thank you. Moderator (Wisdom IR) [43:26] There’s one follow-up question from Amit: “What share of revenue is opacifiers that replace titanium dioxide, and what uplift do you expect from the new duty? And what share of exports is high-grade barytes now under licence?” So, two related questions. Atil Parikh (CEO & Managing Director) [43:47] Opacifiers come from both 20 Microns and Nano, and there is a whole range of them. Kaolin replaces titanium dioxide, finer calcium carbonates also replace titanium dioxide, and our high-grade opacifiers replace it as well. So there is quite a big mix of opacifiers working towards partial or full replacement. I don’t have the exact share at the top of my head, but the team can get back to him through you in due course. Moderator (Wisdom IR) [44:33] We’re almost through the questions in the chat box. One question is from Manish Kela: “How does the quality of output from our captive mines compare with that of competitors in a similar space, both within and outside India?” Atil Parikh (CEO & Managing Director) [44:50] Mining is an activity where comparison doesn’t really work. Everyone has access to a certain grade of material, and you cannot rely on that grade completely to build your product range – you have to rely on external sources as well. In some cases the mining is very similar, though the yield differs. In other cases it might be very different, because you are catering to a different customer base or a different industry, so the requirements are quite different. A direct comparison is really not justifiable. Moderator (Wisdom IR) [45:33] There are no further questions at the moment. We’ll wait for a minute or two – if you’d like to ask a question, please use the raise-hand option and we will unmute you in turn. When unmuted, please introduce yourself and your organisation. You may also type your questions in the chat box.

As there are no further questions, we’ll bring the call to a close. May I request Mr. Atil Parikh for any closing remarks? Over to you, Sir.

CLOSING REMARKS Atil Parikh (CEO & Managing Director) [46:33] Thank you for tuning in; I really appreciate the time you’ve spent joining this call. For any further questions or details you might need, please be in touch with our IR team and they will get back to you with the required answers. Thank you. Moderator (Wisdom IR) [46:52] Thank you, Sir. On behalf of 20 Microns and Wisdom IR, thank you all for joining us today. If you have further questions, please feel free to reach out to us at Wisdom IR. We wish you a good evening. Thank you and goodbye.