Privi Speciality Chemicals Limited (PRIVISCL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Preview Speciality Chemicals Ltd. Q1-FI27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. From the management, we have with us Mr. Mahesh Babani, Chairman and Managing Director of the company, Mr. R.S. Rajan, President of the company, Mr. Narayan S. Iyer, Chief Financial Officer of the company, Mr. Sanjeev Patil, Executive Vice President, Strategy and Biotechnology, Ms. Ashwini Shah, Company Secretary and Compliance Officer. And before we begin the conference call, I would like to mention that some of the statements made during the course of today's conference call may contain forward-looking statements about the company, which are based on beliefs, opinion, and expectations of the company as on the date of this call. These statements are now the guarantees of future performance and may involve risk and uncertainties that are difficult to predict. I would now like to hand the conference over to Mr. Mahinesh Babani, Chairman and Managing Director of Preview Speciality Chemicals. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining Preview Speciality Chemicals FY27 earnings conference call. FY27 marks another important year in Preview's growth journey. Our focus remains on... Currently underway, standing our special... The first quarter reflects a very positive part of the year. To benefit from the confidence that global customers place in previous manufacturing capabilities and ability to consistently deliver high-quality products, these enduring customer relationships remain one of our key strengths and continue to support our growth across existing products and new business opportunities. With that, I will now request Sanjeev to take you through the operational highlights of the call. Thank you, sir. Good afternoon, everyone.

Q1 of FY27 has been an encouraging start for the year. During the quarter, company reported revenue of Rp66.66, which is reflecting a growth of 19.22% year-on-year, supported by healthy demand across both domestic and international markets. Despite adverse global headwinds, demand across the fragrance and flavor value chain remained healthy during the quarter. Global customers continue to focus on supply chain diversification and dependable sourcing, while pre-emphasization and innovation across end-to-end use category continue to support demand for specialty aroma ingredients. These structural trends continue to create opportunities for companies with differentiated manufacturing capabilities, diversified sourcing, and strong execution capabilities like our company. Operationally, we continue to execute our expansion roadmap during the quarter. The balanced manufacturing base together with our sourcing flexibility across both processes remains an important capability advantage, enabling us to optimize raw material procurement while ensuring reliable supplies to our global customer base. Our product development pipeline also continues to progress well. We are advancing several high-value speciality molecules like maltol, ethylmaltol, ethylene vacillate, musti as we call it, cyclopendanol. Further, for long-term roadmap initiatives, introduction of 10 advanced speciality products as part of our Phase 2 and Phase 3 expansion program. The joint venture, Prigil, also continued to make steady progress during the quarter. Following the achievement of profitability in Q4F26, we remain focused on scaling the business further, supported by planned capacity additions with infusion of additional equity, as you all know, and development of high-value speciality molecules further. Operationally, our supply chain remains stable, despite the evolving global geopolitical environment. Our diversified sourcing strategy, particularly our backward integration into pine chemistry and global raw material procurement network, continues to provide resilience and flexibility in managing input availability and customer deliveries. This has enabled us to consistently meet customer requirements across key markets. Looking ahead, our focus remains on discipline and execution of ongoing expansion programs, progressing the specialty product pipeline, and further enhancing our position as a preferred global partner in aroma and specialty chemicals. With that, I now hand over to Mr. Narayan Iyer, our CFO, who will further into the financial details. Thank you.

Good evening to all. Thank you, Sajeev. Thank you, Mahesh Bhai, and a very, very warm welcome to all of you. We are pleased to report and start the financial year 26-27 with strong financial performance delivered in a dynamic and evolving macro environment. Our performance reflects strong execution, discipline, cost management, and continued strength of our diversified product portfolio. Our performance for the quarter highlights our ability to protect profitability across cycles and reinforces our confidence in the structural strength of our operations and the organization. Key highlights for the quarter which has gone by. We reported strong growth despite subdued market. A 19.22% revenue growth was reported during this quarter on a year-on-year basis comparison. We delivered around 25% margins consistently now across the last nine quarters. The EBITDA margins are expected to sustain at a 20% plus driven by the operational efficiencies and improved product mix and increased capacities going to come forward in the near future and in the coming years. Our JV with Prejil is progressing as per expectations, and we expect meaningful contributions to keep coming ahead. On the CapEx update, as Sajeev mentioned, our Phase 1 of production capacity expansion is progressing as planned and is expected to be commercialized shortly. This shall increase our production capacity from 48,000 to 54,000 metric tons of all our existing products. Phase 2 of the M3 of the Multispeciality Aroma Chemicals Project is also progressing as planned. Additionally, during the year and more so during the quarter, We continue to make progress on the proposed merger of Pre-Speciality Chemicals Ltd., Pre-Refined Sciences Pvt. Ltd., and Pre-Biotechnologies Pvt. Ltd. This consolidation is aimed at simplifying the group structure, enhancing operational synergies, improving scalability, and creating a more integrated platform for future growth. Members may note that we are pleased to share that the company has filed the scheme with the NCLT post-receipt of observation letters from both the stock exchanges with no objection, this marking an important milestone in the merger process. We expect the merger to be completed in this financial year. Now coming to key financial highlights for the quarter, 26-27, quarter 1. The total income that was achieved on a consolidated basis for the quarter was around 681.42 crores, which indicates a growth of 20.01% on a year-on-year basis. The EBITDA achieved during the said period was 167.47 crores, registering a growth of 80.73 on a year-on-year basis. EBITDA margins were at around 24.58% for the quarter, and we expect, as mentioned, EBITDA margins to be almost similar in the near future. Profit after tax for the quarter was around Rs. 83.2 crores, as again, 61.46 crores, achieved in Q1 of 2526. The overall growth continues to be driven by volume, price increase, and improved product mix. This growth was supported by sustained demand across key end-user industries. An increasing fraction in our speciality and value-added product segments. While input costs remain volatile during the quarter, we continued to focus on operational efficiencies, cost optimization initiatives, and improved capacity utilization, which supported margin resilience. We have been able to bring down the manufacturing and other administrative expenses, which have enabled to improve the margins. Giving a key highlight on balance sheet, we continue to maintain a very prudent capital structure. I am very happy to inform that due to the excellent management and constant monitoring and focus, we have been able to bring down our overall working capital cycle in this quarter to 108 days during the period as against 141 in the previous year. Our next date, as on June 26th, was Rs. 865 crores, this is net of cash and surplus money deployed in mutual funds, with a net debt to EBITDA ratio of 1.29, reflecting our focus on maintaining financial flexibility while supporting growth investments. Our net debt to equity ratio was a very sound, healthy 0.57, reflecting good generation of profits. Our ROE and ROC achieved during the quarter was 21.7% and 22.72% respectively. Looking ahead, we remain confident in our ability to deliver sustainable growth. Our strong balance sheet, robust cash flows, and disciplined capital allocation strategy Position as well to capitalize on emerging opportunities while navigating external uncertainties. With the planned capacity expansion of existing products and the introduction of new specialty products, We have established a clear roadmap and are on track to achieve division and massage by our honorary and honorable chairman and managing director, Mr. Mahesh Babani, division of 5,000 crores in revenue and 1,000 crores plus of EBITDA over the next three to four years, representing a growth of about 2x. With this, I would like to conclude now and ask the moderator to open the floor for questions and answers.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Vivek Rakholia from FICOM Family Office. Please go ahead.

Very good afternoon. Am I audible? Yeah, yeah. Thanks a lot for the opportunity. My first question was... Will it be a bit louder?

Yeah.

Is it better?

Could be better. I mean, if you're a bit louder.

Yeah, sure. So, gross margin came in at 44.2% in Q1, FI27 versus almost 51% in last year Q1, FI26, which is a decline of about 650 basis points, even as the revenue grew by 20%. And what drove the compression and how much of it do you expect to recover over the balance of FI27? And also, in Phase 1 CAPEX completion in mid-August 2026 and commissioning thereafter, should we read that FI27 growth will more likely be back-ended towards H2 of this year?

Thank you. This is Narayan here, replying to it. Yeah, your observation with regard to the RNC percentage consumption, there being about 4% is true. I would like to take you back to last year, where we had stated that we had the advantage of low-cost raw material and the high cost of selling prices, which we were able to get during the calendar year 2025. But on an average, we had also mentioned that the RMC percentage on the sales. We'll be between the range of 52, 53 to 55 percentage. See, you also have to understand that we import CST and GTO from across the globe and across various periods and various cycles. And so there could always be the usage of the mix that may come about, by which there could be about a few percentage here and there on the raw material pricing.

So, we make over 75 products which are based on almost 60 different raw materials. So, sometimes the raw material cost could be substantially skewed. But overall, as Narayan mentioned, that between 52 to 53 percent is what we are looking at. What you should also see is how much we have shared on other expenses. So as the volumes grow and as the value grow, economies of scale do sit in and overall we are able to not only maintain EBITDA margin but even subsequent from EBITDA to FAT we are able to maintain that as well because the impact of depreciation as well as interest also has come down. You know, so we see that, you know, EBITDA of around 24%, what we assumed is about 24 point some percentage point, 0.6 or something, but 24% and more, nearly to 25% is definitely on the cards going forward. Does that answer your question?

Yes, sir. Yes, sir, it does. Thanks a lot for that. My second question was, in FY26 annual report, in the chairman's statement on page number 17, it indicates that the capacity rising from 48,000 tons today to 66,000 tons by June of 2027, which is divided into phase one, increasing to 54,000 tons, and phase two, increasing to 66,000 tons by September of 2027. Okay. Which phase two date is correct? Is it June of 27 or September of 2027? And also, are we on track for phase two capex? Or should we expect some delay, you know, just like phase one? And in light of the above questions, would you like to revise your overall guidance for FI27?

So first, let me answer your last question. No change in guidance. You know, guidance do remain what we have said. We will achieve 5K, 1K in the promised time. That's first and foremost. Secondly, in terms of implementing our projects, we are on time and things are going on. It could happen, you know, for a week or two, you may not have any activity if it rains too much. But on the overall, the projects are being, you know, planned and being executed right now. To deliver the growth that we have promised to all of you. About the capacity expansion, you know, the current flagship product expansion will happen in the course of the next 15 days or so. So from 48, as Narayan said in his opening remark, from 48 we will go to 54.

So one last line I would like to make as chairman. We are confident of achieving 20%, maintaining 20% CAGR.

Thank you, sir, for the confidence, but just, again, a small clarification in terms of when would the 65,000 capacity, you know, be coming live, in June of 27 or in September of 27, just a small clarification.

So, let me clarify this. First and foremost, the 6,000 metric tons of capacity was to come by June 26, will now come by September 26, is what we are saying. And from 54,000 to 66,000 metric tons, the balanced 12,000 metric tons with regard to the phase 2 cafes, that's what we are trying to say that by September 27, the phase 2 will be completed. I hope I am clear now.

Yes, sir, very much. And the next question was on the bio-based pilot plant, what specific operating metrics like conversion yield or product priority, cost per kg, etc, will decide whether or not the company will move from a pilot plant to a commercial scale? And what is the minimum ROC that is being kept in mind and targeted for these projects?

So, we have been progressing very well in terms of conversion of biomass into several value-added products. A lot of patents are being filed now. And what we are doing is, we are putting up a demonstration plant, as we had covered in the last conference call. We are putting up a demonstration plant in Nevi, Mumbai, which would handle about two tons of biomass per day, which is a sizable quantity, which will then help us in terms of subsequent scale-up. Right now, we process about a few hundred kilograms every fortnight or so. So, we will be putting up two tons per day pilot plant, which will, you know, produce all the molecules that we are looking at. And that would kind of, as it says, demonstration and proof of the concept would be given, you know. So, that's what we are looking at. And investment in this is subsequent to the 5K, 1K plan. So this is something that would happen probably after we put up the plan, which will take about 12 months to 15 months. And once it is commissioned, we'll probably run it for a year to study all the nuances of manufacturing. And then we go for the large scale plan. We are at the moment very confident about the entire commercial profitability of this venture.

One closing remark I would like to give, Sanjeev, about this particular case, that in the 5,000 crore roadmap, this is nowhere.

And the last question, if you could throw some light in terms of how do we benchmark against the peers in terms of process efficiency? That will be very helpful. Thank you.

So that's an ongoing process, and we continue to work that. There is not a single day when it is not reviewed at the highest level. So we continue to strive because we always have believed and have proven that money lies within. So therefore, we continue to work every single day on improving the processes, reducing the steam costs, and doing all of that. So we continue to focus on that.

Thanks a lot, sir, for patiently answering my questions, and all the very best. Thank you.

Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1 on your touchstone telephone. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. Next question is from the line of Nirav Gandhi from Sunidhi Securities. Please go ahead.

Nirav, are you there?

Yeah, hello.

Yes, please go ahead with the questions.

Yeah, my first question is regarding the revenue contribution from the previous JV. How much was it during Q1, and what was the EBITDA generated from the JV?

You want to understand about Prejil? Prejil the revenue generated was about 18 crores and EBITDA generated was about 14-15 percent.

Yes, and my second question was regarding our understanding that alpha pionin prices have risen by 70-80% in the last five months. So, how much of that we have benefited from the price increase, and how do we see the prices of alpha pionin going ahead?

If I would have known that, I would have been a billionaire myself, but no one can actually predict alpha pinin prices. But the good news is, and as we always keep saying, that when we do CST procurement, we do the back-to-back contract with our customers, and that is what helps us. So to that extent, we are covered in terms of our CST and back-to-back with our customers also. As far as the balance alpha-pinene that is made from GTO, the prices are right now at a high level. There are both views, some views say that the prices may still go further, but they are at historic high. That fact remains. And we are able to pass on those costs to our customers.

Right, sir. And, sir, if you can share the break-up of revenue in terms of volume growth and realizations, that would be helpful.

We are not giving volume growth on quarter-on-quarter basis, so we will give you at the end of the year. It's a good mix of all the pricing.

It's an all-round growth, so let's not get into netting crisis, but it's an all-round growth overall. As I mentioned in my opening remark, it's a mix of product, increase in prices, as well as increase in volume.

And, sir, what is the status of the merger of Prevy Fine Sciences with Prevy Speciality?

Sir, it will happen by this year end. The good news that has happened in this quarter is that we have been able to file the application with NCLT. So, we have progressed in this quarter very well.

Thank you so much.

Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. The next question is from the line of Anisha Dalal from Universal Capital. Please go ahead.

Hello.

Yes, ma'am.

Hello.

Yes, ma'am.

Hello.

We can hear you, ma'am.

Yes, first of all, congratulations on the performance. I have two questions. One is, the cost of raw material and investment trees has been increased as compared to the previous quarter. Can you give some highlights on that? And the second is, the industry...

So, Manisha, I think the first question I just answered with regard to cost of FRA. So, it's actually a mix of various things, but last quarter, for the same period, we had some advantage of low-cost raw material and increase in the selling prices for the contracts for the calendar year 25. Plus, a good product mix was also there. So, you need to look that in Q2, Q3, Q4, the RM percentage vis-a-vis the sale was higher than what it is currently. And so, we are in line with that between 52 to 54 percentage that we always talk about, what could be the RNC as a percentage on sales. So, you know, and lastly, I've always been telling that do not look at privy on a few quarter-on-quarter basis. We need to look it into as a yearly basis because the contracts that we enter is on an annual basis. There are back-to-back contracts that we have. So, here you will find us the RNC disease unit. I said, to be around in that way. And with regard to camphor sales and camphor... It's in the background. A lot of background noise.

Hello. There was some mismatch in the manufacturing capacities that have come up to India for the camphor manufacturing, which has increased the prices of camphor. So in that regard, I wanted to know the highlights from you.

Okay, so camphor, camphor, there were always, always number of players who make camphor, but their source of making camphor is based out of gum treatment and oil, which is very volatile in terms of pricing. Whereas, we make it more from the CSC route, and it's a very small percentage of overall revenue. So, it's not an important product. We sell on our terms. We do not really need to sell.

Manisha, the most important thing is that, for us, camphor is 1 out of 75. For many others, it could be the product, you know, so that's why we do not give so much of importance to camphor per se in our overall portfolio.

Okay. Okay, fine.

It's about 5 to 6% of our total living, so we bother up to point, but we don't.

The previous participant got disconnected. We have our next question from the line of Sahil Goyal from Equinos Capital Ventures. Please go ahead.

Hello, I'm already here.

Yeah, yeah. Let me try to louder.

Sir, I have a question regarding your revenue mix. Which molecules contribute to the major portion of our revenue?

Pine continues to be the main contributor, you know.

Can we specify the name? Yes.

As you are aware, we have stopped giving this mix of product mix and product segments and all. So, this is as per the board directive. So, the important thing is that, you know, it's a complete product mix that we are selling, and all our products and our capacities are close to 90% of the install capacities that we have. So, you should understand that.

And so, what are we? It has to be utilization right now?

Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. The next question is from the line of Rajesh Mishra from Liberty Trading. Please go ahead. Hello.

Hello.

Yes, sir.

Yes, sir.

Congratulations on great set of results. Sir, I have two questions. First is, due to the Iran war, impact of raw material project effect on profitability, and how you managed. Second is, what is percentage of time per segment in your total business, and it is increased month to month basis, or it is still same?

Yeah, with regard to the Iran war, there has not been too much of an impact on our RM percentage consumption, in fact, because crude as a segment and the product that we do is very, very limited, in fact. So predominantly, it is non-crude items that we manufacture. So really, we have not been impacted because of the war that has been going around. And your second question, Vidhikatu, CAMFOR forming a part of our overall portfolio, as Sanjeev rightly currently mentioned, it is between the range of 4% to 5% broadly on the total turnover that we do. And last, you asked for the capacities that we are operating around. It is around 90% or so. I hope I've been able to answer you, Mr. Rajesh.

Thank you, sir. Thanks a lot.

Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. The next question is from the line of Krish Talot from Wee Growth AIF. Please go ahead.

I just wanted some clarity on the capacity. So, our expansion plans are up to 70,000 metric term, but post merger, what would be our capacity? So, combining previous fine science, what kind of capacity we can see and further, we are not currently looking for for the backward integration, but previous fine science has have certain capabilities of backward integration. So, how are we looking to better integrate corporal as well, moving forward, so if you can share some that in that.

Okay. Thank you, sir. You know, to answer your first question, that post-merger, what will be the volume that gets added? It is close to about 6,000 metric tons that gets added to the Prevy portfolio. And second, your question, whether Prevy Fine Science has a backward integration for the product that it is manufacturing? Currently, no, sir, because it's in a different set of chemistry. The raw materials are available, and there is good margin available on that effect. But maybe going forward in future, we can always consider once it becomes a part of the preview portfolio.

The additions would be around 6000 metric 10, right?

That's correct, that's correct, that's correct.

Also, sir, on our previous joint venture, what kind of capabilities from the chemical know-how and prospects know-how that we are building or that we can utilize for other clientele based as well, which are also good in the flavors and in the flavoring segment?

We, I'll tell you, we don't really speak much about our technical details, but we have, you know, over the years, So, we are particularly good at hydrogenation, for example. We are extremely good at distillation. We also do a lot of other separations as well, which normally are not being done. All these chemistries we do, and that is what helps us in terms of, you know, overall looking at newer molecules as well. Other thing that we also do well is the environmental treatment. So, you know, we ensure that it is zero liquid discharge. So, in that area also we have substantial expertise in terms of, you know, treating all the effluents and ensuring that it is zero liquid discharge. These are platforms that we have, and there are a couple of more which I would not like to disclose, but there are some more, apart from biotechnology, there are some more technologies that we are working on, which are really breakthrough technologies, which in the due course of time, probably over the next 12 to 15 months, we will talk about those.

Okay. Thank you so much, sir. And just one more last thing. Are we looking for a similar kind of joint ventures, more joint ventures and partnerships?

Sorry, sorry.

Are we looking for more joint ventures and partnerships?

These are very, very tight ropes to work on. We'll have strategic alliances, but not joint ventures. We'll have strategic alliances. We have two underway, but joint ventures become very, very... Tight rope to work on because, you know, one customer feels you are favoring the other. So now we are going to do a strategic alliance instead of a joint venture. Of course, we have two strategic alliances underway.

Thank you.

A reminder to all participants, if you have any further questions, you may press star and 1. The next question is from the line of Anike from CERK Research. Please go ahead.

Hello.

Yeah, Nikit. Hello, I'm audible, sir.

Yeah, you are.

First of all, congratulations on a good set of numbers, sir, and thank you for the opportunity. So, my question, most of my questions were answered, but I would like to ask, what kind of a funding split are we looking when we are about to, like, start the Phase 1, Phase 3, Capex? So, I just wanted to ask about that. Thank you.

As far as the funding part is concerned, you know, so since we have mentioned and it's there on the public domain, that phase two we have already commenced and phase three we will come in somewhere around the end of this year or early next year or so. So, broad guidelines given is It will be prima facie done through internal accruals, and as in when needed, maybe we will borrow from the banks or from whatever institutions are available at very competitive prices. Even after having said that, you would see that our ratios pertaining to debt to EBITDA and debt to equity, they all shall be very closely monitored and be much, much below the so-called thresholds that normally people prefer to be around.

Okay, understood, sir. Thank you so much. My second question would be, like, can you just explain, like, up to what extent are we looking for adding continuous flow chemistry or is it being used across the manufacturing processes or are there any opportunities to increase the adoption and particularly for the new molecules?

Yeah, for the existing molecule also, you know, we, because each molecule involved between three to four chemical reactions. So, in some cases, for example, we may be continuous on two. We are trying to do all of them continuous. Distillations, most of our distillations are now continuous. And then we are, in the upcoming projects as well, we are trying to see wherever possible, we are trying to start with continuous manufacturing for large-scale molecules like maltols and all that. For speciality molecules, obviously, it can't be continuous, but otherwise, we are working on continuous chemistry on ongoing basis. Yeah. It's a good point to see.

Thank you so much, sir. That's really good to hear. So that's all for my name. Thank you, sir.

Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. The next question is from the line of Suraj Chindi from Yes Securities. Please go ahead.

Hi, good evening. Am I audible? Yes, we can hear you. Yeah, so my first question is what percentage of our raw materials are proof-based and how has this impacted the pricing?

Okay, as just mentioned earlier, this is Narayan here answering you. You know, crude-based raw material forms about close to 15% to 18% of the overall purchases that we do.

Okay, okay, and can you please tell us what amount of CAPEX that we will be incurring this year and also the next two years?

Okay, the broad outline for this year and the following two years, It could be around in the range of 850 to 900 crores or so. So that's the CAPEX that is outlined which will ensure phase 2 and phase 3 completion.

Okay, and can you talk more about your new products and the new initiatives over and above the 5k, 1k plan? Also, what is the progress in our peripheral products? At what stage are we in currently?

So, you know, our new 5K-1K story starting from about 2500 crore that we pulled last year, out of that, if you see your, you know, universal presentation on slide number, what is slide number? Yeah, 18, we have these details, you know, wherein we are given, previous investment presentation, I think, yeah, in which we are given these things. So, essentially, we are looking at three arms to this growth. One is chemistry, which is based out of furfura, you know, which is a building block, which is made from on-cob. So, we would be the only company, you know, fully integrated from the, from-cob up to making of molecules like maltol, ethyl maltol, and cyclopetidol. That would add about... 1,000 crore and more to the revenue in this vertical. We are also looking at a molecule called musk tea or ethyl bacillate. And then there are about 10 speciality molecules, 10 perhaps 11. And these molecules, of course, we are not putting any names to these ones right now because of obvious reasons. And all these plans are right now under implementation. We are expecting that by about middle of next year, they would be mechanically completed. And we expect that H2 of next financial year, we should start getting contributions from these plans. So that we are on our track to achieve 5K, 1K plans that we have made, that is 5,000 crore of revenue and over 1,000 crore of EBITDA, 1,000 plus EBITDA.

Okay, okay, understood, understood. Thank you for the opportunity. Thank you.

A reminder to all participants, if you wish to ask any questions, you may press star and one. Next question is from the line of Mithun James from MootDMS. Please go ahead.

Hi, am I an auditor? Yeah, yeah. Thanks for the opportunity and congrats on the course of the phone. So, my question is on the capex plan. So, if I am not wrong, you have, broadly, you have three Thank you. That's correct. Product Capacity, I think. And now it will happen. Yes, that's correct, Mr. James.

So Maltol and Ikhar Maltol both are right now made, I would say, over 95% is manufactured only in China. So it's an obvious China plus one, you know, course where we stand to achieve India as a source for manufacturing this. India imports significant amount of Maltol, which is used in making pharmaceuticals, and we are in touch with most of these customers. They would be very happy to procure it from us. Maltol as such is actually used as a flavor, you know, all the Ovaltine, all the chocolate, biscuits that you eat, that has Maltol. You know, it has that milky flavor that you get is from Maltol. There is, I mean, we are putting up a capacity which would represent almost, as per our normal strategy, one-fourth of the global opportunity, and we are confident that given that this will be consumed by our existing customers, and we would be the only company which would be fully backward integrated, only company globally, starting from Cobb right up to making... So therefore we would have substantial complexity advantage in terms of manufacturing costs and everything, and that's what gives us assurance that we will be able to scale up our revenues pretty quickly.

Sure, that's great to hear. So, this will be a similar play to your crew self at Up and End as well. It's like a base to that kind of a strategy. So, you are saying you are the only company in the world which has got this technology to sort of convert Con of the Corp to Malphar?

Okay, so there are a number of companies which convert, I mean, there are multiple ways of converting cob into furforal, okay, and there are a number of companies in China who process and produce furforal, which has a lot of other applications as well. I mean, furforal production is over a few lakh tons, you know, so there are a number of companies in China which process furforal, and they sell that furforal, and there are companies which make martol in China which then procure that furforal. What I am saying is we will be the only company which will start from co-op, make furfural, and for that also we have a slightly different technology, superior technology. That's what our advantage would be.

Just another quick, last question on the Prigiv JV. So, what sort of products are you targeting in that Prigiv JV? Is it more to do with supply towards Prigiv or how does that product...

Mr. James, you know, we have an agreement of non-disclosure, so I will not be able to give too much of details of that. But whatever is manufactured in the JV will be exclusively sold to Jivindan.

Okay, cool.

There are 42 products, and you can see their confidence in the joint venture by the fact that together we have decided to invest additional 50 crore rupees in equity for next phase of expansion.

Cool, thanks. So, thanks for the answers.

Thank you. We have our next question from the line of Nikkei Jadav from Parnatana Investment Advisors. Please go ahead. Hello, am I audible?

Yes, please.

Okay, I just wanted to ask about the crisis happening in the RHC currently, I think related to the Houthis. So, do you guys see your trade costs increasing in the next couple quarters? How are you tackling this issue?

See, Red Sea impact now has been for quite a number of years, and we have been sailing through that impact now. I can only say that. So, with regard to freight expenses on account of the hormones trade, we have not been too much impacted on that, but Red Sea continues to be as it is. Do you have anything specific to? Can it clarify?

No, sir. Just wondering if margins will be affected.

No, no, no. We don't find any such challenges.

Okay. Thank you. Thank you, sir. Thank you. I remind you to all participants, if you wish to ask any questions, you may press star and one now. The next question is a follower from Chris Talod from BeGlobe AIF. Please go ahead.

Great idea.

Prish, are you there?

Hello, am I audible now?

Yes.

I am just taking a question again. I just want to ask clarity on the my fault point. It would be a flavor molecule, then what, and it will go into probably pharmaceutical application, there would be approvals that would be required. So, what would be the approval timeline and process that we can see in the day?

So there are two maltols, Krish. One is ethyl maltol, one is maltol. One of these goes for pharma application, but as this is an intermediate, therefore it doesn't require any approval. As far as maltol is concerned, that goes for flavor. So our plants are designed as per GMP standards. So we will be getting good manufacturing practices certification to sell those products because it's a flavor.

Okay, I understand. And just one more question on the strategic alliance that you mentioned. Can you share some light on what would be the scope of the strategic alliance and what would be the purpose of the strategic alliance?

Currently, we are not in a position to disclose too much of that. So, at the appropriate time, we will announce.

But these would be typically, you know, let's say, let's say one or two specific molecules, you know, that our customers may ask us to do exclusively for them. So, that's what we'll work on.

Okay, thank you so much.

Thanks, Vish.

Thank you. Ladies and gentlemen, that was the last question of today, and I now hand the conference over to Mr. Narayan S. Iyer for closing comments. Over to you, sir.

Thank you. Thank you, Banu. On behalf of previous Specialty Chemicals Limited and the management on behalf of Mr. Mahesh Babani, I thank all of you investors, shareholders of the company and every person attending. This particular call, for having taken the time out. Thank you, and it was a pleasure interacting with all of you, and look forward to interact very shortly soon. Good day.

Thank you. Thanks. Thank you, speakers of the management. On behalf of previous Specialty Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.