Good afternoon, all
Nirmal Shah
Good afternoon, Kiran
Kiran Mukadam
Yeah, Nirmal Sir, can we start?
Nirmal Shah
Yes, please do. Good afternoon, Kiran
Prachi Mahadik
Good Afternoon, Kiran
Kiran Mukadam
Good afternoon everyone, on behalf of the company, I would like to welcome you all to
Chembond Chemicals Limited first Analyst / Investor Meet (Virtual Meet- Mode) for Q2 and
Half year ending FY 27.
Today on this meet, we have with us from the Management, Mr. Nirmal V. Shah – Chairman
and Managing Director, myself Kiran Mukadam, Company Secretary and Compliance officer
of the Company and Prachi Mahadik – Chief Financial officer of the Company, who will begin
the meeting with a brief opening remark, followed by a presentation of the financial results.
After the presentation, we will proceed to a question-and-answer session. Participants who
wish to ask questions can click on the Q&A icon on the bottom of your screen and post your
questions there.
We request all participants to keep their microphones muted during the opening remarks and
the presentation to ensure a smooth session.
Please note that certain statements made during this meet may be forward looking in nature.
Such forward looking statements are subject to certain risks and uncertainties that could cause
the actual results or projections to differ materially from those statements. Chembond
Chemicals will not be in any way responsible for any actions taken based on such statements
and undertakes no obligation to publicly update these forward-looking statements.
I would like to now hand over the meet to Mr. Nirmal Shah for his opening remarks. Thank
you and over to you, sir.
Nirmal Shah
Hi, very good afternoon, everyone. I'm Nirmal Shah, the Chairman and Managing Director of
Chembond Chemicals Limited with me in this room is Mrs. Prachi Mahadik, our Chief Financial
Officer, together, we both will try to put some perspective on the quarterly results and half
yearly results that were just declared a few minutes ago. Apologies for the slight delay. There
were certain technical issues for uploading these numbers on time, due to which this meeting
had to be delayed by 15 minutes. We'll walk you through some common stuff which you
already might be knowing about what the company does, just for the benefit of people
attending this meeting for the first time, and spend much more time on the numbers itself
and questions from your side, which we will try to answer to the best possible extent we can.
So let's not waste any more time. Let me just keep moving.
So, Chembond, everyone by now would be aware that we had a demerger and the parent
organization itself was established in 1975. This is the 51st year.
have
over 950 people. Last year, our consolidated revenues stood at 290 crores and our
2 |Investor MeetWe
24 Oct
2026
operations were run from three manufacturing sites. Our head office and the R&D center is
situated at Navi Mumbai in Maharashtra.
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Our businesses are structured in four buckets. The water technologies business is the largest.
Construction chemicals follows that. Distribution is the third largest. And the cleaning and
hygiene business is a joint venture with a German company called Calvatis, which formerly
used to be a part of guys.
So we'll talk a little more about what we have to offer for in water technologies. We do
chemical solutions. We have equipment solutions that complement the chemical solutions.
We do wastewater remediation and there's a lot of traction happening in this space and all of
these are backed by a very deep technical service team that's monitoring and controlling
operations on customer sites on a daily basis. Our chemical programs are offered across
cooling water for boiler water treatment, for raw water clarification, effluent treatment and
its recovery, foam control, so RO membrane treatment, fin cleaning, and drinking water
disinfection.
It's A cross-section of heavy and light industries that we serve. And recent addition to this
segment and of a sizable volume is the calls at the data centers that are being set up across
the country. Glad to inform that we are supplying to the largest telecom company and also to
a lot of independent data centers, some of them international ones, in Maharashtra as well as
in other states.
A construction chemicals business is about modification of concrete used in infrastructure. We
do sealants. A core area for us is the polysulfide and acrylic sealants. Waterproofing solutions
are offered as a post-construction as well as during construction portfolio. And we have a
range of powder products for repairing concrete or used grouts in engineering equipment
foundations and for tile adhesives.
Customer segments, as you would all guess, would be on all kinds of infrastructure, some
industrial, and we work a lot through applicators and distributors to sell our solutions. Cleaning
and hygiene business is the JV between Chembond and Calvatis.
We have industrial and institutional segments within this company. It's run as Chembon
Culvatis Industrial Hygiene Systems Limited. In the industrial portion, we serve large beverage,
food processing, dairy, and brewing industries. And in the institutional applications, it's
commercial kitchens, laundries, and housekeeping teams and departments in institutional
installations.
In chemical distribution, we import, stock, and sell various specialty chemicals. We structure
them for construction chemicals. We have additives in paints and inks. These 2 form the
largest component. Some additives in water treatment and then sealants and polyurethane.
coatings for an allied industry to construction chemicals. Coming to the H1 executive
commentary, I'll let Prachi do a little bit of the talking now, and I will step in again to give you
a little more context.
We construction chemicals. We have additives in paints and inks. These 2 form the largest
component. Some additives in water treatment and then sealants and polyurethane, coatings
for an allied industry to construction chemicals. Coming to the H1 executive commentary, I'll
let Prachi do a little bit of the talking now, and I will step in again to give you a little more
context. Hi, good afternoon all. So coming to the financial part, this is half year executive
commentary. So for half year 2026-27, our consolidated revenue stood at 182.25 crores,
3 |Investor Meet 24 Oct 2026
higher than last half year by 32%.
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
And segment wise, you can see water technologies is higher by 28% on account of good order
book growth. Construction chemicals, we focused more on sales expansion in few territories
invest in Gujarat, Maharashtra, which contributed to 30% increase. Distribution at 86%.
higher as compared to last half year and cleaning and hygiene 59% or last half year. Coming
to EBITDA beta at 22.55 crores, so higher by 2% or last half year and our consolidated profit
before tax is at 19.79 crores.
Higher by 2% as compared to last half year. Actually, here, what we have seen in quarter one
and now again in quarter two, our material cost have gone up and this material cost have
eroded our profitability. So in spite of higher volumes, the profit before tax still remains at
same level in absolute numbers and as a percentage to sales, it is down and on account of
material cost going down.
Yeah, I'd just like to add here that the costs have been increasing at a pace that's faster than
us being able to pass them on to our customers. There is a little bit of delay in customer
acceptance because these increases have been happening repeatedly through this last year.
six months, ever since this Iran war has broken out. Even today and even yesterday, we've
been receiving some inputs on material costs further increasing. It's an extremely volatile
situation and something that we haven't experienced in
all these years. It's even more volatile than it was in COVID because COVID, you know, at least
material costs did not go through the roof. Here, there is a little bit of fatigue at our end. Our
sales teams, by the time they finish one round of price increases,
there's already another one to go back to the customers and seek. And there doesn't seem to
be any immediate end insight because all the predictions that we've heard, we've read about
articles, indicate that there will be stability soon, but that's not
really.
being delivered. But we continue to maintain efforts on broad-basing our sales growth. So
revenues grew on the back partially due to price increases, but the major component was the
volume growth. You'll see later in this presentation a little more about that.
Coming to next slide on revenue track. So this is a quarter wise comparison for Chembond
Chemicals on a consolidated basis. These are last 10 quarters. So here we have covered
financial
year
24,
25,
financial
year
25,
26.
and the current two quarters, quarter one, quarter two of financial year, 26-27. So quarter
two financial year, current year, it is at 95.8 crores. Over quarter one, revenue has grown by
11%. And if we compare quarter two of last financial year, it has grown by 31%.
So, revenue. Has grown on the. Coming to profitability, track of Chembond Chemicals Limited
consolidated numbers. These are EBITA and profit before tax numbers, again, quarterly
comparison of last 10 quarters. So quarter two of current financial year, our EBITDA is at 8.4
crores and profit before tax is at 7 crores. In quarter one, EBITDA was 14 crores and profit
before
tax
was
at
12.8
crores.
So
if
we
see
this
track,
From quarter four, our quarter one has gone down and quarter two has further gone down.
This has updated by Nirmal, material cost has gone up and profits have eroded in quarter one
and quarter two as compared to quarter four and all the earlier quarters.
Oh.
This is on half year financial performance. So current year, April to September as compared to
last year, April to September. Revenue, we see there is a sales growth of 32%. So we are at
182.25 crores as compared to 138 crores in last half year.
4 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Prachi Mahadik
Hi, good afternoon all. So coming to the financial part, this is half year executive commentary.
So for half year 2026-27, our consolidated revenue stood at Rs. 182.25 crores, higher than last
half year by 32%. and segment wise, you can see water technologies is higher by 28% on
account of good order book growth. Construction chemicals, we focused more on sales
expansion in few territories invest in Gujarat, Maharashtra, which contributed to 30%
increase. Distribution at 86% higher as compared to last half year and cleaning and hygiene
59% or last half year. Coming to EBITDA beta at Rs. 22.55 crores, so higher by 2% or last half
year and our consolidated profit before tax is at Rs. 19.79 crores. higher by 2% as compared
to last half year.
Actually, here, what we have seen in quarter one and now again in quarter two, our material
cost have gone up and this material cost have eroded our profitability. So in spite of higher
volumes, the profit before tax still remains at same level in absolute numbers and as a
percentage to sales, it is down and on account of material cost going down
Nirmal Shah
Yeah, I'd just like to add here that the costs have been increasing at a pace that's faster than
us being able to pass them on to our customers. There is a little bit of delay in customer
acceptance because these increases have been happening repeatedly through this last six
months, ever since this Iran war has broken out. Even today and even yesterday, we've been
receiving some inputs on material costs further increasing. It's an extremely volatile situation
and something that we haven't experienced in all these years. It's even more volatile than it
was in COVID because COVID, you know, at least material costs did not go through the roof.
Here, there is a little bit of fatigue at our end. Our sales teams, by the time they finish one
round of price increases, there's already another one to go back to the customers and seek
and there doesn't seem to be any immediate end insight because all the predictions that we've
heard, we've read about articles, indicate that there will be stability soon, but that's not really
being delivered. But we continue to maintain efforts on broad-basing our sales growth. So
revenues grew on the back partially due to price increases, but the major component was the
volume growth. You'll see later in this presentation a little more about that.
5 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Prachi Mahadik
Coming to next slide on revenue track. So this is a quarter wise comparison for Chembong
Chemicals on a consolidated basis. These are last 10 quarters. So here we have covered
financial year 24-25, financial year 25-26 and the current two quarters, quarter one, quarter
two of financial year, 26-27. So quarter two financial year, current year, it is at Rs. 95.8 crores.
Over quarter one, revenue has grown by 11%. And if we compare quarter two of last financial
year, it has grown by 31%. So, revenue has grown on the coming to profitability, track of
Chembond Chemicals Limited consolidated numbers.
These are EBITA and profit before tax numbers, again, quarterly comparison of last 10
quarters. So quarter two of current financial year, our EBITDA is at Rs. 8.4 crores and profit
before tax is at Rs. 7 crores. In quarter one, EBITDA was Rs. 14 crores and profit before tax
was at Rs. 12.8 crores. So if we see this track from quarter four, our quarter one has gone
down and quarter two has further gone down. This has updated by Nirmal, material cost has
gone up and profits have eroded in quarter one and quarter two as compared to quarter four
and
all
the
earlier
quarter
if
we
see.
This is on half year financial performance. So current year, April to September as compared to
last year, April to September. Revenue, we see there is a sales growth of 32%. So we are at Rs.
182.25 crores as compared to Rs. 138 crores in last half year.
Operating EBITDA for current half year is at Rs. 22.55 crores, which is 12% of sales. And last
half year, it was Rs. 22.20 crores, which was 16% of sales. Profit before tax, we are at Rs. 19.79
crores, which is 11% of sales.
And last half year, we were Rs. 19.39 crores, which is 14% of sales. Absolute numbers, it has
remained same, but as a percentage to sales, it has gone down.
Coming to sales volume, this is quantity in metric ton. Here we have divided our sales
volume into water treatment chemicals, construction chemicals, and trading and industrial
hygiene.
So water treatment chemicals, our volume in this half year is at 13,343 metric ton whereas
last half year it was 9,268 metric ton. So volume has gone up in water treatment.
Construction chemical, if we see the volume actually has gone down, but sales have gone up
on account of price increase. So from 1988 metric ton, we are now at 1330 metric ton.
Trading and industrial hygiene, the volume has gone up from 690 metric ton to 1367 metric
ton.
6 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
Yeah, I'd like to add a little context to construction chemicals. Our product portfolio also
underwent a change. We had a higher sales contribution from a sealants business as
opposed to the admixtures last year. And that is also one of the reasons. So all this reduction
of about 550 tons is not due to reduced or increased prices. It's also due to a change in the
product mix sold and so at a group level, we talk of revenue, about 82% of our revenues
come from water, 8% from construction chemicals, 9% this year from distribution, and 1%
from industrial hygiene, pretty much in line with what it was, but we are increasing the share
of some of the other businesses and the cost of water treatment.
Prachi Mahadik
Coming to expense summary, again, half year to half year comparison. This is as a
percentage to sales. So material cost for current half year is at 56% of sales, whereas last half
year it was 46% of sales. So material cost has drastically gone up.
Employee benefit is at 20% of sales and now it is 17, so it has gone down. Other expenses as
a percentage to sales are 15%, whereas last half year it was 18%. So we see here the major
cause is material cost, which has gone up from 46% in last half year to 56% in current half
year of financial year 26-27.
Coming to our employee strength, this we have compared as on 31st of March 2026 as
compared to 13th September 2026. The composition here we have divided it into sales,
technical services, plant operations, support and R&D. So as on 31st March, the total
strength was 920 and now it has gone
to 940. And the division is technical services were at 674 numbers and now they have gone
up to 694. Our sales force 91 and now it is at 97. Plant operations stable around 65
employees. Support staff from 71 to 66 and R&D from 18 to 19. So this is the employee
strength what we have overall Chembond.
That's it on financial presentation. Nirmal, you want to add something?
Nirmal Shah
Kiran Mukadam
Zaki Nasser
Kiran Mukadam
Nirmal Shah
Zaki Nasser
No, so I think without spending more time on this, I'd like to open up the session for
questions.
Yeah, Kiran.
Mr. Nasir. Hello?
Hello?
Yes,
can you hear me?
Yeah, listen.
Yes
Yeah, good afternoon, Nirmal Ji. And I think, as you mentioned, that we have we have been
undergoing cost pressure. Our EBITDA margins this quarter have fallen, I think, to around 8,
8.5%.
How do you foresee these going ahead, sir? At least what would the aspirational EBITDA
margins be? Do you think by the end of this year or early next year we could get back to that
15, 15 and a half percent?
7 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
Yes, Mr. Nasir, what we are finding is that there have been multiple issues. One is the first
round of increases that happened in the Q1, which was driven by a lot of the solvents. Q2 has
been driven by key components that are being imported from China due to fluctuation in
currency as well as the availability and the material cost. So all three factors came in together.
Q3 has been, as of now, the same as Q2 with supply chains not easing yet, freight rates also
being higher, and availability continuing to be a challenge.
There's a little fluctuation also in domestic markets. Some materials are suddenly going
through the roof due to unplanned shutdowns by a couple of the manufacturers and an
import, an export country has also not been able to ship out that material because of a
shutdown in their country. So these are some time-specific issues that we feel should ease out
in some time. But unfortunately, we've become so cautious that it's becoming very difficult
for us to put any kind of, provide any visibility to how soon we can normalize. We take solace
in the fact that the volume growth, our teams are putting in all the effort and just the whole
fatigue aspect is one thing that we will definitely overcome.
But the silver lining is that once these prices start normalizing, usually we found that there's a
couple quarters of tailwind, so we would not need to reduce prices. A lot of the new businesses
that we've acquired in these last couple months are at the higher prices.
So they will continue to deliver those margins, higher margins. And when costs come down,
those margins can improve. So I think double-headed challenge, one was earlier we were able
to maintain a 10% top line. We made a lot of changes. We started adding, you know, focus on
growing the business and the volumes. And now we've come across the situation should
normalize hopefully by the end of this financial year.
but can't put, can't give you any assurance.
Zaki Nasser
Yeah, Sir, we have we have seen a good, so we have seen a good growth in the top line, so,
and and generally Q2 H2 is better than H1. Do you at least see that trend?
Sustain going forward, sir.
Nirmal Shah
Very much, very, very much so. So the order book is very strong. There's also all the continuing
orders go well into the next financial year. So there is no doubt that this momentum will
continue for the remainder of this year. And Q4, which has historically been a high quarter,
high sales and profit quarter should also be nothing different this year.
Zaki Nassar
Sir, what is the biggest threat to business as you see it? See, because we are a very customized
kind of specialty chemical company. So do you think there is any risk from the source
manufacturers in terms of setting their own products in the company or no, I mean, there's a
moat enough in our business.
8 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
I am unfortunately not able to fully understand or comprehend your question, but if I got it
right, you want to know whether there is customer stickiness? Is that the question or? Yeah,
yeah, yeah. So yes, of course, customer stickiness is definitely there. Our customer attrition
rates are extremely low. and new business keeps growing. In fact, even some of the customers
that we do lose or we do let go experience poor treatment performance from our competitors
and do want us to get back. And that is the case in two or three of the accounts that we had
lost last year.
which we are back into at better prices and higher margins.
Zaki Nassar
Yes, yes, sir, So some light on the AI data center clients of yours, sir. How is that segment
panning out and what kind of demand do you foresee going ahead on that?
Nirmal Shah
So we, the top telecom company, all their data centers are being treated by Chemborn's water
treatment. There's also NTT, Yota, and a couple others, Control-S, large data centers. Each of
these is taking up our automated solutions. So they have an online monitoring and feed
control system. Remote monitoring is what they seek. So that's one component. And the
other is the makeup chemicals that they need, which is not significantly large, but the sheer
numbers of these in a concentrated locality provides an opportunity which pays for itself by,
you know, better monitoring teams and routine customer visits.
Zaki Nassar
And sir, before I come back to the queue,
The taxation, so we have ended up paying, I think, 35% in the half year. So why is that?
Nirmal Shah
I mean.
Taxation, yeah, I'll just let Prachi talk about why our tracks, but I believe it would be a lot
related to the capital gains on redemption of investments and on some of it would be. So,
Prachi, can you pull that out and throw some light?
We can come back to this in a few moments.
Zaki Nasser
Nirmal Shah
That will be fine, sir. Thank you.
Yes, thank you very much.
Kiran Mukadam
Thank you, Mr. Ritesh.
Ritesh Poladia
Yeah, thanks for the opportunity. Am I audible?
Kiran Mukadam
Hello?
Yeah.
Yeah, yes, sir, please.
Yes, sir. Yes, sir.
Nirmal Shah
9 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Ritesh Poladia
Yeah, yeah, thank you, Nirmal Bhai. Good afternoon. Sir, just wanted to know this margin
erosion is across the segments, or is it more into the distribution because it grew its growth is
quite high at eighty-six percent? That's number one.
Second, in construction, you said that there is a product mix change. If you can give some more
insights into it.
Why sealants are more and admixtures are less? Is there a change of strategy or something
on that? It will be helpful for us.
Third on employee base, can you give us an idea of what is this technical service employee
base?
It's quite unique for the means to us and also 18, 19% employees to sales ratio is also quite
high for the comparable companies in the chemical segment. So how are you different and
what we can envisage this?
In years ahead, thank you, sir.
Nirmal Shah
Awesome. Thank you very much, Ritesh, for posing these questions. I'll take them not
necessarily in the order you asked. Chemical segment is divided, is very, very versatile. You
would have polymers, you would have refining products, you would have clothing, you would
have so many different segments within chemicals.
We cater to a specialty chemical segment, and within specialty chemicals, our business is
highly customized and customer-centric. Our teams are deployed at customer sites,
monitoring and treating their water treatment, water systems day in and day out.
Large sites demand a larger team because the business value and the complexity is significant.
Our teams are qualified. They are chemists or chemical engineers. They need to know what
chemical processes are and our customer base includes refineries, steel mills, power plants,
to petrochemical complexes, and to the small ones like institutional hotels and hospitals.
So with the larger segments, we need to have our teams deployed. Within that large site, there
are multiple applications. One could be in raw water treatment. That's the fresh water that is
taken into the factory premises. Then we treat the cooling, the process water application.
So we would treat boilers, we would treat RO membranes, we would treat cooling towers.
And then there's the wastewater that's generated that needs to be treated before it is
discharged into public domain again. So for that, also, we have to have around the clock
monitoring, feed control, and make sure that the discharge meets the regulatory norms. So
for all of these, there are certain requirements that the customer puts up front.
Our bids and prices incorporate the cost of manpower and technical support.
that needs to be provided. As you would understand, water is not stagnant. It is a dynamic in
quality. Seasonal changes as well as source changes, as well as certain leakages from within
the
factories
can
disturb
the
water
balance
and
the
quality.
10 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
which needs immediate course correction in terms of the treatment we provide. So that's why
we need people in the field. I think our employee cost as a percent to sales used to be even
higher in the past periods has come down because it's a higher top line this quarter for sure.
And it's been like this for...ever since we've started this business, because this is something
we thrive on. I think one of your questions was also on the product mix in construction
chemicals. Yes, there were certain orders that we had for admixtures.
Those projects came to an end, so there was no more future supplies to those projects and
that sales was replaced by a proactive action by the team to build up customers for regular
moving those were the sealants. Sealants we have over the years gained a good reputation
for performance.
And it's the preferred benchmark in the industry in polysulfide sealants that a chem bond
sealant is considered to be T1. So that's what's getting back some customers on sealants. And
we are also aggressively pushing. We also repurposed one of our lines in the plant in Gujarat.
to make additional quantities of sealants. So we're able to churn out more volumes for that.
Was there any other segment question that I missed? If I have.
Ritesh Poladia
Third one was on margin. Is margin erosion across the segments or is it more in the distribution
side?
Nirmal Shah
Yes. No, it's across the segment, not so much in distribution because as a total percent,
distribution is still about 8 or 9% of the total. So water is the major concern. And we were just
doing a quick calculation that had margins even remained at Q1 levels, our profit would have
been higher by about Rs. 20 crores. So that's the erosion in numbers just because of these raw
material prices that have shot up.
Yeah.
Ritesh Poladia
If I can add a couple of more questions. So you mean to say you have a product business also
and there is a service element to it because you need to have technical staff into it. Sir, if you
can give some idea what percentage of revenue is scattered by this technical staff
Nirmal Shah
That's right, that's right, that's right, yes.
Ritesh Poladia
Nirmal Shah
And
80% of our business revenues come from businesses that need manpower dependencies and
are driven by technical solutions. And about 15 to 16% is purely driven by product sales and
the remainder is a hybrid where the basket is sold. So some products and some technical
selling.
Ritesh Poladia
So if your people are to this refinery or to their water treatment plants, can we say that you
have some mode to that extent that the client will not run away from you?
Just for pricing purpose.
11 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
Yeah, that's true. Yes, very much so. And that's what I mentioned. Our customer attrition rates
are very, very low. And even in instances where we have lost, where the customer has,
customer is not running away from us, they are throwing us out. They've actually invited us
back and...agreed to pay a premium to solve their issues created by a competitor.
Ritesh Poladia
Only one last question: any revenue concentration if you, if you can give like top 10 customer
revenue concentration or something?
No, actually, that's something that's a little too specific, and you know it's something that we
really wouldn't want to be in, you know, discussing in this forum.
Nirmal Shah
Ritesh Poladia
Thank you very much, sir. It's very helpful for us.
Nirmal Shah
Yeah, thanks. Thank you.
Yes, I think the next question is from Siddharthaji. Yes.
Kiran Mukadam
Mr. Siddhartha.
Siddharth
Neelkanth
Oh, thank you for the opportunity. Am I audible?
Nirmal Shah
Siddharth
Neelkanth
Yes
Good afternoon, Nirmal. In the previous calls, you had mentioned about these new age
industries like solar panels, copper plants, and data centers. So approximately what
percentage of our water revenue comes from these new age industries?
Nirmal Shah
Roughly about 7 to 8% so far.
Siddharth
Neelkanth
Nirmal Shah
Okay, and do you see this concentration growing in the next three years?
Siddharth
Neelkanth
Okay, and just a last question. So these customers, are they on tenders or are they on
contracts?
Nirmal Shah
In the initial phase, they come with the technology suppliers contract. However, with the
performance that we deliver, they end up becoming bid contracts. And in the bidding, there
is usually a premium that they are willing to pay for somebody who has already delivered.
who has already delivered.
Siddharth
Neelkanth
Nirmal Shah
Okay, so you can negotiate better prices with them.
Siddharth
Neelkanth
Okay.
Okay, thank you.
Yes, if this industry continues to execute all the projects that are in the pipeline, we expect it
to hit about 12 to 15 percent.
Correct. Better prices, not necessarily, but yes, they would want to continue to work with us.
12 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
Yes, sir. Thanks.
Kiran Mukadam
Umesh to Jinaal.
Hello?
Jinaal sheth
Good afternoon. Yeah, hi. Am I audible?
Kiran Mukadam
Yeah, yes, sir, please.
Jinaal sheth
Yes, good afternoon, Nirmal. Just, I mean, heard your comments on the margin side and
obviously that since that was a big hit. I just wanted to understand since your commentary has
been very positive on sales on growth ahead, what is driving this positivity? If you may kind
of, if you can break it down.
Nirmal Shah
Yes, hi, Jinaal. Most of the segments that we cater to, not only most, all the segments have
seen volume growth. Whether it's across the board, there's not one industry that is slowing
or which has slowed down. refining, pet chem, chemical manufacturing, agrochemicals,
fertilizer, power, steel, cement. Every segment, Janal has experienced growth.
Jinaal sheth
This is interesting, Nirmal, because, I mean, when we are tracking some of these industries, I
mean, obviously, it's a mixed bag what we hear. So I'm simply trying to understand, has there
been a change lately that is helping us with this strong growth? I mean, something on the
regulatory front, I don't know. I'm just kind of trying to understand.
Because, I mean, in the last few years back and in the last couple of years, I mean, there's a
clear bump up in the pace of growth that we are at, right? So I'm just trying to understand
what has changed. Is it, obviously, I know last time you did mention about newer products
that have been introduced as well that's helping, and then you did answer the previous one.
Where you know the new age, so I'm just, I mean, what is that that change that has led to the
strong growth?
Nirmal Shah
Yes, primarily it is an expansion of the volumes being produced by these industries. Second is
their effort on water conservation and recovery. They are trying to reuse as much water as
they can and, as a result of which, they continue to need better designed treatment programs.
There's also certain amount of regulatory change and the move in public sector from
elemental chlorine to using other oxidative treatments. But that impact In our performance
has been not even 4 to 5%, so that uptick is not driven primarily by regulatory. You know,
regulations, basically, uh, mandates.
Jinaal sheth
Okay, your commentary for this year is strong, but you see the opportunity, right? I'm not, I'm
not trying to hold you to a guidance or something. I'm just trying to say, yeah, so you, yeah,
you can resolve your, yeah.
Nirmal Shah
No, we expect off Couse industry, because I look at as over all within certain positive indicator
on the country and its export that are happening, the free trade agreement are only going to
make easier to Indian company to export, the more and more products are getting into
manufacturing domain within India which did not existing the few years ago, this momentum
is going continue, I don’t think see stopping within year or two this are long term commitment
shares by countries.
13 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Jinaal sheth
That's fantastic. And lastly, Nirmal, how are you seeing the competitive landscape? Can you
change it there or it's the same or?
Nirmal Shah
Ohh.
No, it's pretty much the same. There's been, of course, a little bit of change in one of our
competitors who's been taken over by another process chemical manufacturing company.
And I think that transition phase will last for a few more quarters and we expect that, and I
continue to maintain that that should be a positive for us because it's a larger, better organized
company
Jinaal sheth
Perfect. Thanks a lot, Nirmal, and good luck to you and the team.
Nirmal Shah
Thank you, thank you very much.
Kiran Mukadam
Mr. Madhuri.
Madhur Rathi
Sir, thank you for the opportunity. So firstly, if you could help us understand that how should
I look at our margin going forward, because you mentioned that we have been able to pass on
some raw material cost increases to our customer. And if you can help us understand how's
the execution cycle of these projects and when can we expect the increased margin or the
realization improvement that you have taken with customers to reflect in our margins.
Nirmal Shah
Yeah, so Madhurji, ours is a continuing business. It's not like an equipment supply that will end
with one project. So 90% of our water business is driven by the chemicals, which are like a
consumable and most of the contracts are either annual or biannual, so two year contracts.
They come up for renewal. Public sector contracts are fixed price, very difficult for us to revise
those prices.
within the contract period, unless we terminate the contract ourselves. Private sector, they
are much more reasonable. They will listen, they'll talk, evaluate, and pass on at least a portion
of the increase that we would seek.
New bids and new tenders, new proposals are constantly being submitted. Those are
submitted at prices that would factor in the current material costs. And again, those would
also result if it is a positive result in orders that would be for one or two years. So this kind of
a cycle will continue. So it's a continuing business. It's not a one-off.
Pipeline, when I say pipeline for equipment, I think our book would be about 15 to 20 crore as
of now for this financial year and on chemical sales is everything else is a continuous business.
Overall, maybe 25, 30 percent of our total sales in water comes from PSU, which are fixed
price contracts.
I hope I've been able to answer your questions, most of all.
14 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Madhur Rathi
Yes, so, so, so, yes, so, so would it be fair to assume that over the maybe one next one or two
quarters our margin might be on the there could be some pressure due to if the raw material
prices don't decrease in proportion to the extent where the price lag happens with our
customers? Is that a fair understanding?
Nirmal Shah
Yeah, so as long as everything else is constant in the current situation, if the Iran war diffuses
completely and crude and all the logistics lines come back to pre-war levels, we expect that in
one or two quarters we should be able to see
all the effects of the, you know, cost increases be overcome.
Madhur Rathi
Got it. So, so I would, so if I look at your gross margins, they've not considering these two
quarters, but FY26 versus FY24 level, they've improved. So how should we look at our gross
margins going forward, considering we are moving into these new age industries where our
product might be much more critical as well as
The quantum or the business with our customers, like refinery, is growing. So can we expect
this to move to 40, like 50?
No, so see, there is nothing like more critical and less critical. Water is a critical element for
any industry. And if not treated well, it can cause several production related issues and
downtime and higher costs for the customer. So whether it's a data center or a refinery or a
power plant, water is equally valuable and important to be treated well. So from that
perspective, there is nothing, you know, that needs to be more weightage to water treatment.
And new age industries, when I say that, I'm saying that industries that did not exist in India,
they've started to come up.
So, so what kind?
And as a result of which, the market itself is expanding. These industries did not exist in India
until two, three, four years ago. And now we see that they are becoming a sizable component
of industrial manufacturing. So that's what I mean by new Age Industries.
Got it. So, so what metrics should we look at? So, considering, so what metrics should we look
at for the margin improvement for Chembond as a business together? Would it be more driven
by the chemistry that we provide or would it be more driven by as manufacturing, whatever
purchases that we are buying out from outside.
Madhuri, I don't think I can throw anything more than what we've already been talking last
30, 40 minutes. There's not much more to add to help you understand this margin
improvement will come when costs will reduce. Everything else is in its position, in its place.
So it's not that our CapEx has driven in interest costs up, nor has employee costs shot up
through the roof. So all those are still where they were. It's only the material costs that have
hit us. And as soon as those prices cool off and the effect of price increases sets in,
Our margin improvements will be seen.
Got it. So just one final question from my end. So can I ask one final question?
Got it. Thank you. Yeah.
Yeah, sure.
So, so just one, sir, how would be our competitive intensity versus a EPC or a water treatment
solution provider? So, what is the competitive advantage or right to win that Chembond has
versus these integrated peers who are building the plant as well as providing these chemicals?
together as a service to their end customers, whoever that might be.
I think the relationships that we have and the credentials that we carry still make us a
preferred choice because all the other EPC companies that are not into chemicals do not want
to award their chemicals business to our competitors who are doing everything themselves.
Nirmal Shah
Madhur Rathi
Nirmal Shah
Madhur Rathi
Nirmal Shah
Madhur Rathi
Nirmal Shah
Madhur Rathi
Nirmal Shah
15 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Lala Ram
Nirmal Shah
Lala Ram
Lala Ram
Nirmal Shah
Lala Ram
Nirmal Shah
Lala Ram
Prachi Mahadik
Lala Ram
Prachi Mahadik
Lala Ram
Prachi Mahadik
Lala Ram
Nirmal Shah
Lala Ram
So from that standpoint, we are a preferred vendor to those companies. And we have a couple
partnerships, or I would say informal or formal partnerships in place with these large
equipment companies where we are their preferred partner supplier.
Thank you. Yes, Mr. Lala Ramji.
Hello, could you make an audible?
Yes, sir. Yes, very much so. Thank you..
Good evening, and the management team. I have three questions. The first one is, you made
a remark that your profits would have been high about Rs. 20 crores if prices in quarter two
would have been similar to quarter one.
Uh, were you referring to the EBITDA or PBT for the first half?
In that remark.
The gross profits.
That's right.
for the entire half year, correct?
Q2, Q2 at Q1, yes, or for six months it would have been that month.
I have 20 crores. Okay, got it. Also, the second question is, if I look at your order two versus
quarter one, the foreign gross margins is not very dramatic. It is just a 1% drop from 42.7 to
43.7 to 42.7.
So the bigger pain actually has come from other expenses, which has gone from 11 crores to
16 and a half. So can you throw some more light on what exactly has happened there?
So our revenue mix has got technical service as one of the revenue. Here we employ our
labors. So there are few customers from wherein we have got technical service orders. So
labor cost has increased in other expenses. And also to some extent, freight cost and traveling
cost has increased. So this has contributed to increase in our other expenses.
Yes.
Okay, got it. Third question is, if I look at your employee base, majority of them are into
technical services. So does that mean all of them are at the customer site?
Yes.
Okay, so what is the scope of?
Cost optimization in this line item with say remote monitoring than any other developments
in technology.
So these costs are like when we receive order, the employee call, the labor and the employee
call number is specified in our order and that is the service what we have to provide. So that
is what we are currently following. So I don't see any optimization in terms of number. So that
would still remain the same.
Got it. One final question is in the previous calls you have mentioned about the vision of
thousand crores. Can you talk what we have done in the last few months with respect to this
vision? Maybe new categories, new segments, new geographies, whatever you can share..
I think a lot of it is across the board. And I think the revenue growth itself would be an indicator
that some of those are obviously delivering the goods. We had aimed that in three years, we'd
be at that number. So one was an organic growth, and that's something that we are pushing.
Second was to grow the smaller business within the company operation. And that's also what
we're trying to achieve in the distribution, in the cleaning and hygiene, as well as in the
construction chemical space. So both of these are something that we can do within our
company. And the third is looking at inorganic opportunities. So every now and then we keep
receiving.
Yeah.
16 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
Lala Ram
Nirmal Shah
Lala Ram
Nirmal Shah
Lala Ram
Nirmal Shah
Lala Ram
Nirmal Shah
Kiran Mukadam
Zaki Nasser
Nirmal Shah
Zaki Nasser
Nirmal Shah
Lala Ram
Aspirational value.
The questions would, you know, be like to do.
And specifically, product, or you know, whatever you can share in terms of framework.
No, I mean, it needs to be synergistic. It needs to be an area in which we have some credible
presence and strength. And it needs to be of a size that we can digest and manage to operate
without creating constraints for the continuing business. Pretty simple and logical from that
perspective. We don't want to get into something unconnected, something fancy, and
something unsustainable.
Got it.
Okay, one file was a second fiction.
I think I'm now running into finals a lot, so yeah, let's hear that. Yeah, go ahead
Yeah, sure. So I think we have done a very good job with cash flow in the first half. So want to
understand if we are looking to use that to say by doing buyback or increasing different payout
or anything of that sort. Given.
Yeah, we would surely be looking at it because if there's not an immediate need for this cash,
then we'd like to return it to all our shareholders.
Got it. Thank you so much and wish you all the best
Thank you very much.
Yes, sir, Zaki.
Mr. Nasser.
Yeah, sir. So, Nirmal, you mentioned 1000 crore aspiration three years down the line. So, what
capacities have are we already sitting on for this aspirational number, sir? And what, if
required, what CapEx would?
Further be required.
Yes, I think this is something I answer every quarter or every time we interact with all of you.
So our products are formulations and capacity is not a constraint. We have large enough plants
and that are small incremental expansions are yielding magnified capacity expansions. So
addition of a warehouse section would increase the material handling capacity multi-fold.
Adding 2 reactors would increase, you know, capacity multi-fold. It is not linear or constrained
by the, you know, the processing cycle is short.
And so, so, and the businesses that we are into, addition of capacity is not a multi-year project.
It may at most take two months to expand. The plants are made and designed in a way that it
is modular expansion. whether it's on inside the shop floor or an additional block or building
to be made, they can be expanded without disturbing the running operations of the plant.
So from that perspective, that's the least of our concerns. Our concerns are, you know,
typically towards profitability management and cash flow management. On cash flow
management, we've done, I think, a credible enough job.
On profitability management, we've tried, but due to some reasons beyond our control, we
have not been able to deliver to our own expectations, and I'm sure your expectations too.
Thank you, sir. Best wishes for the balance of day.
Yes, yes, yes, sir. Thank you. Thank you very much.
All right, I think there are...
Mm.
Mr. Lalaram, do you still have a follow-up question or it's raised from the previous question
itself?
Yeah, it's raised from previous question.
17 |Investor Meet 24 Oct 2026
Chembond Chemicals Limited
formerly Chembond Chemical Specialties Ltd
Nirmal Shah
Kiran Mukadam
Nirmal Shah
Kiran Mukadam
Nirmal Shah
Okay, okay. So great. I think we've reached the end of our time anyways. And if there are no
more questions, Kiran, can we conclude this meeting?
Yeah, yes, sir, please.
OK, thank you. Thank you everyone. Thank you. Thank you all and wish you all a happy Diwali.
Yes, I wish everyone a happy Diwali festival ahead.
Yeah, thank you all. Please. Thank you for participating.
Yeah. Thank you.
Thank You
18 |Investor Meet 24 Oct 2026
