Yasho Industries Limited (YASHO) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Yashow Industries Limited Q4 FY26 Onyx Conference Call, hosted by MUFJ in time. As a reminder, all participants will be in the lesson-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on its own phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Sejan from MUFG in time. Thank you and over to you, ma'am.

Thank you, Yusuf. Welcome to Yashu Industries Q4 and FI26 Earnings Conference Call. From the management today, we have Mr. Parag Zaveri, Managing Director and CEO, and Mr. Chirag Shah, CFO. Before we proceed with the call, I would like to give a small disclaimer that this call may contain certain forward-looking statements which are based on business operations and expectations of the company as of today. These statements are not guarantees of future performance and involve risks and uncertainties which are difficult to predict. A detailed disclaimer has been given in the company's investor presentation, which is uploaded on the stock exchange. Now, I would like to request Parasar to give his opening remarks. Over to you, sir.

Good evening, everyone, and thank you for joining us for the Yashua Industries Q4 and FI26 earnings call. We appreciate your continued support and I trust you have reviewed our financial results and investor presentation. FY26 was marked by a challenging global environment for specialty chemicals with price disturbance, geopolitical tension, supply chain volatility, and cautious procurement trend impacting demand and pricing. Despite these headwinds, Lester Industries delivered rich talent performance through discipline execution, strategic decision, and operational efficiencies. Consider revenue reached Rs. 830 crore up 22.7% year-on-year, while EBITDA stood at Rs. 144 crore. With margin improving to 17.4%, supported by product mix, operating leverage, and cost optimization. Exports contributed positively, while industrial chemical segment remains the key growth driver. We strengthen our long-term platform with investment in R&D. and manufacturing. With additional manufacturing line in high growth categories are being commercialized and expected to contribute meaningful to revenue and margins. A key milestone was securing a 15-year long-term agreement. This reinforces our capabilities and enhance revenue visibility for us in the long term. Advanced funding of Rs. 51.4 crore has already been received, reflecting strong customer confidence. Our planned facilities operated at above 60% utilization in FY26 due to the various challenges what we have faced. With improving sentiment and enhanced customer engagement, we target over 75% utilization in FY27, supporting EBITDA margin expansion. For FY27, the compliance plan of CapEx software is 125 growth, which will be completely funded through internal accruals. Our R&D facility, completed in October 25, is now fully operational, accelerating innovation, and strengthening our portfolio. In this happening times, I would thank our investor for their continued faith and trust in Yashow. We continue to work towards building a strong business and increasing shareholder value over the long term. Victor? I hand over to our CFO, Mr. Chirak Shah, for the detailed financial updates.

Thank you, Paragwai, and good evening, everyone. I will now take you to the financial highlights for Q4 and FY26. For Q4 and FY26, revenue was Rs. 246.72 crores, up 33% year-on-year. EBITDA stood at Rs. 44.71 crores with margin at 18.1%, reflecting 23.7% growth. This was driven by improved execution, cost management, sourcing efficiencies, and plant productivity. For FY26, volume growth was 33% year-on-year, supported by stronger customer traction and scale-up across categories. Industrial chemicals contributed 87% of revenue for both the quarter and the full year, while exports accounted for 62%, underscoring resilience despite global challenges. In FY26, the company generated positive cash from operations of Rs. 152.75 crores. Financial discipline remains strong, with debt to EBITDA improving to 3.75 times from 4.70 in FY25. We also prepaid Rs. 23.30 crores of FY27 liabilities, leaving only Rs. 15.6 crores due. Easing the repayment pressure and enhancing flexibility. CAPEX for the year FY26 was Rs.75 crore. For our long-term contract signed in FY26, we received an advance of Rs.51.4 crore with execution progressing as planned. We expect the revenue from this to start realizing in FY28. With improving demand, strong operations, and continued financial discipline, we are well positioned to deliver consistent and profitable growth to our investors. Thank you, and we now welcome your questions.

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 withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Dheeraj Kumar Reddy from Alpha Square. Please go ahead.

Sir, thanks for the opportunity. Sir, I just wanted to understand what kind of, you know, where are we seeing the 1,500 crore revenue target to be achieved by FY28? What is fundamentally driving this? And what are the kind of molecules which we are working in order to build our capabilities?

Well, first and foremost, we are expecting to utilize our assets by FY28 by optimal. When we say optimal, 85 to 90 percent, that will drive us. Also in FY28, the special project where we got advanced, which will come in commercial operation, so that will also add to it, and that gives us confidence. Besides when we talk about the new molecules, we are working on a number of applications besides our traditional business, that's rubber loop, working on many chemists, so that should also add to the top line.

Got it. Sir, beyond 2020, Eric, what kind of areas are we working? I mean, beyond rubber, what are the additional categories which the company is currently focusing on in terms of R&D?

I cannot get too much into that, but I can tell you we are working more to the performance chemicals which can drive the future growth of the company. Also besides our traditional field where we are working today.

Sir, it is not rubber. You mean, it is extra rubber. It could be semiconductor or anything. I mean, I'm just guessing it.

I don't want to name it, but I don't want to give a wrong hope or feedback to you that we work on a semiconductor, we work on a data center. No, we don't do all that thing. We are purely chemical producers. We are the B2 base. We are not in B2C segment. So, and we are working on a different segment on different applications.

Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and one. Next question is from the line of Pariksit Gujarati from Neveshai. Please go ahead.

Hello.

Hello. Yes, please go ahead.

Yes, yes. Thank you for this opportunity, sir. My first question is, previously you mentioned that all the revenue growth has come from the volume growth of 33%. So there is no price growth means you have not seen any growth in the sense due to currency depreciation of INR

against USD and Euro? There was a very minor, as you know, we also import equivalent quantity of raw materials from overseas. So that, again, we always nullify. There will be a slightly more age on export side, but if you look at net-to-net, there is import-export and a little bit extra on export side. So I won't say that the currency pricing depreciation can help. Yes, it do help to some extent. The company always measures growth in terms of a volume, what we sell, rather than a value, because value is always volatile. In current situation, there is also a lot of pricing pressure due to the various factors. I had in FY26, so the prices were always under pressure, and margin was also under pressure. Okay, so perfect.

So, my second question is, many of our raw materials are linked to petrochemical derivatives, right? And also crude prices have moved up significantly due to this global crisis. So, I want to ask that how this crew movement...

I will give that credit to my sourcing team, greatly, how they maneuver the supply chain. Also, with some product mix also that has been negated, the low margin product has not been pursued, but the reasonable margin product has been pursued here. So, yes, it's a mixture of a lot of effort from sourcing team, manufacturing team, sales team, everybody together, help us to remain afroat and to hold on our margins. Okay, okay, perfect, perfect.

And so, my last question is that, so without naming any customer, for the order which you have got from the big MNC player, so if that order gets completed on time successfully, so there are other big additive players which are expanding into India, their operations, so can they be open to our customers

as well in the next 3-4 years? Yes, very much. Okay. Okay. Good. Thank you so much.

Thank you. Participants, to join the question queue, you may press star and one. Next question is from the line of Naeem Patel from Bassel Research. Please go ahead.

Hi. Thank you for this opportunity and congratulations on a good set of numbers. So, my first question was on the EBITDA margin side. So, historically, you know, Yasuo has guided for 17 to 19% guidance, and now I'm, so, is it in the same band, or, like, are they expecting now 20% plus, or, any color on that?

I think we are, I have already mentioned that we are looking for the better margins compared to this year. So yes, we are expecting at least 2-3% higher EBITDA compared to what we had. Only because of the operational efficiency, when we are dragging up the utilization beyond 70%, we should be able to rationalize a lot of cost.

Understood. And, you know, considering the tariffs as moderated compared to Q2 as well as Q1, and Q4 now has the customer base from US. What is the response on that side? And like, how are we looking into the America geography for F527, if you could highlight on that?

Well, definitely the target has helped us to expand our sales in Q4, and that comes in the results, and we believe that America's market is going very well for us, even in this quarter, too.

And for FY27 onwards also, we believe there are steady responses, is that correct?

I think, yes, yes, very much.

And just to follow up on the geographic front as well, we are seeing some slowdown in the European economy and, you know, Europe is also one of our key markets. And now we are targeting our capacity utilization to ramp up to 75% as well as this supply side disruption from shared hormones. So, like, how are we going to navigate to achieve this target of 75% utilization concerning these dynamics?

I know. One side, we see that the slowdown in Europe, and second time, some segment, we see the good demand coming up to us. Besides Europe, we also went swimming into the Asian market, which was not highly penetrated by us. And third, the American market is opening up. So that will also help us to achieve the better utilization.

And that's all from my side. Thank you very much. Thank you. Thank you.

Next question is from the line of Harshit Singhania from Robo Capital. Please go ahead.

Hello, am I audible?

Yes, please go ahead.

Thank you for the opportunity and congratulations on a great set of results. Just a few questions. So, you have guided that the peak potential of both the plants combined is around 14-50 crores. So, that is as per the existing capacity?

Yes.

Okay, and the Parkhajan plant has further potential to land on which there can be development?

Yes.

Great. And right now, we are taking an active effort of not taking much more debt. So, can that be assumed, like, for 27, 28, both, that the debt levels are going to be on the lower end only?

I want to assure that. What we are showing is that debt-to-abit ratio will come down, and our comfort zone will be in the two

and a half times. That's what we want to draw.

So, first let us see that, and then we talk about the debt. Till then, we don't want to talk about the increase in the debt. Absolute number could rise, but when you look at the ratio point of view, it will remain that.

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

Thank you. Thank you. Next question is from the line of Arnav from Ingaia Ventures. Please go ahead.

Good afternoon, sir. I'm on this side. So I just wanted to address then on the domestic demand that was related in Q3 and Q4 despite exports being on the lower side. So is this domestic demand coming from a new set of customers or is there an existing customer demand ramped up and which segment that is contributing to this domestic front, sir?

Domestic front is driven mainly by industrial segment. That is going very well for us. We have heard some few customers and existing customers also increase the share from us. Maybe they might be having a supply issue from some other existing supplier, so we have got opportunity to cater them. So multiple factors help us to expand our reach domestically also, and we hope that we continue that with the speed.

So, we expect this demand from this new set of customers and even the existing set of customers from domestic to continue. And so, one more point on this, what I've observed this particular quarter that despite having a higher domestic share, the margins have improved. So, do you see this trend continuing despite higher contribution from domestic, the margins will be there?

I think so, it will be. What grow the margin is the better utilization in a Q4. That will help us to achieve, if we are going to utilize the plant capacity to 70-75%, that will also improve the margin further up. And that's why we are giving a guidance of improved EBITDA to 20 or so.

Yes, sir. And, sir, final question, in the industrial segment, anything that you can highlight, whether it was rubber or lube additive, which was contributing?

I think all segments are doing quite good for us.

Yes, sir.

Thank you so much.

Thank you. Next question is from the line of Rupesh Tatia from Long Equity Partners. Please go ahead.

Hello, sir. Thank you for the opportunity and congratulations on good results. Sir, I have a very basic question. I'm relatively new to the company. Can you tell me what percentage of your revenue comes from automotive engine oils and what percentage comes from industrial engine oils? And with the EV penetration, what kind of risk do you see to our portfolio?

Let me be honest, I don't know how much my customers use for automobile or industrial. We don't have that data. Second question is on EV. EV is increasing, but we don't see that risk for next 15 to 20 years. That could be a reality down the line, but not in the next 5-10 years, maybe it could be a threat to the lubricant industry. Number three, besides the automotive, industrial segment of lubricants is also growing rapidly. Due to the data center, due to the solar, or due to turbine, or the wind power, so there is also increasing demand happening. So, we don't, and we are capturing all these segments. I don't see a big threat in a near to the, medium to long term, 10, 15 years horizon, we don't see a threat on our business software lubricant.

Okay, okay. The second question, sir, is there any area in which we make our own formulation for lubricant and sell that? Because what I understand is formulation is a bit hard, it's proprietary, and probably higher margin. So, any idea about what percentage of our revenue comes from formulations? How we are looking at it?

Yasuo don't do any formulation. Yasuo only makes the pure chemicals. So all Yasuo's customers are who make formulation. And we don't compete with our customer. That's the policy of the Yasuo. So we don't have any intention to go in that direction. Okay, okay.

That is very clear. And so the final question is, I mean, the current pathogen plant, we are currently in phase one, but in the past, we have also talked about doing phase two, and phase two will be sort of like a downfield apex. So, at what point do you start looking at Phase 2? What kind of products will you do there? Any comments on that?

I don't have, like, Phase 2 today because that's ongoing. In FY26 also, we spent about 40 crores, you know, as a little capex. We have a special project running that is about 90 crore capex in this year, and we are looking at 100 crore capex in Pakistan. So that's an ongoing process. That will continue till we totally exhaust our land available to manufacture.

So, your capacity went from 12,000 to 32,000. What is the capacity now, and what is the maximum that we can go to?

Well, I don't,

honestly speaking, I don't know what is my current capacity, but I can tell you in Pakhajan, we have made a two in a production building, and we can build additional four production buildings. So that four buildings will be constructed one by one as we see the ramp up or the additional demand coming in. Okay, okay. Thank you. Thank you for answering my question, sir. Thank you.

Thank you. Next question is from the line of Chintan Shah from JM Financial Family Office. Please go ahead.

Hi, thank you so much for the opportunity. Mr. Pada, I was just going through the presentation, and you know, we sort of changed the language there. So, Naomi mentioned that we are an emerging global specialty chemical partner to MNCs, and plus we are doing a lot more investment on the R&D side. So just wondering, as a strategy, is it changing more towards this sort of a CDM model? And just wanted to understand, is this more customer-driven, or what exactly is happening that is driving the stage? And if you think about it, four to five years down the line, how did the company evolve? Would we see a much higher, much video-driven contract versus the products that we manufacture on our own?

Yashor is not governed for the CDMO kind of work, but we don't mind leveraging our capabilities to tie up with some big user who is looking to source large volume from Yashor. Okay, so that's my answer.

Okay. Okay. Got it. Understood. That's all I have.

Thank you.

Thank you. Next question is from the line of Ankur from Access Capital. Please go ahead.

Yeah, hi, sir. Thanks for the opportunity. First question, you know, in our presentation, we are guiding for a 1,500 crore revenue by FY28. So what sort of, you know, visibility here do we have? Is it largely contracted with respect to the customer's demand, ramp-up, et cetera? You did alluded towards, you know, ramping up your existing capacities, but, you know, how is the demand visibility there?

I think with the more communication with the customers, and the expansion of our customer base, which is helping us to grow the market, with the current challenges, we are able to... Gain confidence of our customers who are, who are a little bit, you know, conscious that whether far away from India, the supplier can support us or not, that we have proven one in the difficult time of this. So that is helping us with some customer commitment coming to us on the table, which is helping us to give a guidance of 75% utilization. And if you achieve 75% utilization, that is more 15% than what we had. Today, that will give us confidence and also the project which we are doing with the customer, that will also start kicking in from early FY28. So all these things will help us to achieve 1,500 crore revenue in FY28.

Sure, sir. Just a follow-up here. The commitment and, you know, the customer ramp-up that you are referring to, this is largely a same product, you know, going to more number of customers and geographies, or these are new products also which are going to the existing ones?

Well, the relationship what you built with a new customer is exclusive to them. So, that cannot be said to anybody. It's what we, but similar chemistry we have also been, and that can be shared to all the customers about.

Sure, sir. That's helpful. And secondly, on our working capital, you know, if you can, you know, share some thoughts there. We used to be 120, 150-day working capital, but often there is an increase. So if you can just help us, you know, better understand how to look at that part.

I think we were at the 200 odd days, you know, FY25, but 215, 216 days, we have brought it down to 190 days today. Our daters are constant. That has not increased. Only the stock has dropped to some extent. That will help us. And let me be honest, higher stock has helped us a lot in this crisis. That was addressing these guys to us.

Okay.

So we could maybe get very well with the last three months supply challenges of raw materials. Since we had enough stock, we could manage it well. So, if you ask me today how much you want to reduce, I said I'm happy, but it will come down as a number of days, but as an absolute number, it will remain the same. So, we would like to bring it down to 175, 170 in the next 6 to 12 months, rather than drastically bringing it down and wait for a raw material to have a production.

Sure, sir. That's helpful. Thank you for all the answers and all the best.

Thank you. Thank you. Next question is from the line of Dheeraj Kumar Reddy from Alpha Square. Please go ahead.

Sir, in the CDMO model with you. Hello? Hello? Sir, am I audible? Hello? Yes. Hello? Sir, in the previous participants' question, can you just again touch up on the CDMO model because historically company has been evolving, moving away from commodity to entering into more complex areas. Can you just elaborate that answer again?

Well, CDMO is something which is done in more, you know, API segment and those kind of segments. We are not in that segment here. We are not here to cater for a smaller volume kind of thing. Somebody wants 20 metric ton, 100 metric ton. I don't think so. Yeso is there to do that kind of a model. We have a design package and looking into the molecule which we can produce at least 500,000 metric ton minimum and then take it up from there. So we are not looking at a CDM or CDM style, but yes, we are looking for a cooperation with the customer who are looking for larger volume, which they will source from us. Yes, we are there for that.

Understood. Sir, also in one of the interviews, you mentioned that beyond 28, the idea is to ramp up the current two facilities to probably four, five, six facilities, right? Sir, how do you see that journey coming here? What will drive that? What are the kind of areas which companies, at least if you can touch up on like what? I mean, how is the company forcing that growth curve beyond 28 is what we would like to understand it from you?

Well, beyond 28, we have a lot of molecules which we think that will help us to grow. Beyond that, even also our existing product, there are certain opportunities that we can go further. So we will like to do a deal. We will look at our product portfolio from where we can increase. And number two, we are in a process of introducing more chemistry in our portfolio, so that will also help us to grow.

And the strategy of entering into one molecule is more like replacing, so any Indian customer is already doing it, or it's only us who is actually supplying it to this MNC from an Indian geography standpoint? And what is the typical market size of each molecule, sir?

Well, we are looking at each molecule nothing less than 50 crores, at least to add to our top line. Otherwise, we are not interested to look at some molecule which does give a revenue of 5 crores. When you are looking at the 1,500 crores and adding a molecule of 5,10 crores revenue, does it want to help us?

No, my dear friend.

So we need to look at the molecule which gives at least 50 crores revenue to... To work in R&D is much more meaningful, because R&D takes a lot of resources, not only the human, also financial resources. So we need to be very careful where we are going to spend our money.

And what about this Indian geography competition, sir? Are we sole supplier for these molecules, or are there any other competition?

Always there is a competition. Always there is a competition. You cannot claim that you are a sole. It could be that one of the other, I could be sole today, tomorrow there could be some more producer. So you cannot claim that, and that's not, I would like to comment on it.

Understood, sir. Thanks, thanks a lot.

Thank you. Next question is from the line of Agastya Davi from CAO Capital. Please go ahead.

Hello, Dr. Olin. Am I audible? Yeah. Thank you very much for the opportunity, sir. Sir, most of my questions have been answered. One question that I had was, is there any sort of disruption or distortion, dislocation in the supply chain, either from your raw material side or the end user side or in the space of your competition, which you can point out as of because of the problems in Middle East?

Well, I can look at the number of... Time, number one, a lot of our imports are getting delayed, which generally typically takes three to four weeks. That ends up taking more than eight to twelve weeks to get the product. So that's one of the biggest challenges. At times, we don't know where our import countries align. And then those are the challenges. When we are exporting earlier days to the USA, it was only 25 days. Today it takes more than 60-70 days to reach the container to the USA.

But sir, these are just timing issues or sir, the quantity, the supply itself is missing. Will this sooner or later become a volume issue?

Well, this will at times cause a problem at our end that we have been stuck with a lot of material because it has not been moving out quickly. Or sometimes we are waiting for one of the key raw materials which has not come in, so the production hamper or you have to buy at a different price from the market. So there are multiple challenges come. And the number three, the challenge is because of the spectrochemical challenges, a lot of raw materials are not available or available at a very fancy price. So you want to take a decision, can you afford to buy that price or you have to wait. So there are multiple challenges today. Yeah, and the promotional services have been mitigated by having a very high inventory.

So, just last question to, I mean, just to elaborate this point. So, is there a particular time by when this problem becomes a really big problem, and you won't be able to substitute or wait long enough? I mean, when do the volumes really dry up?

Let me be honest, neither I have a crystal ball, nor I have a source from the White House which can give me that information, what's going to happen tomorrow.

Right. Okay. Thank you very much, sir. All the best, sir. All the best.

Thank you. Next question is from the line of Poojan Shah from Molecule Ventures. Please go ahead.

Thanks for the opportunity, sir. Can you give us some sense on the volume part for FY23?

Well, we already said that in FY26, we have grown by 33%. And in volume talks, and in the next year, FY27, we are expecting to grow by. Utilization to grow by 15% or so, and the volume growth should be somewhere in the range of 40% to 50%. Again, we should be getting that growth.

Sir, why are you asking me to try this short word? I stand on the chemical effects of all these small issues.

Sorry, Winter, we are not clear. Can you go slow?

Yeah, just, just short them.

M-K-N-A-S-O?

Yes.

Okay. So, my first question, the question why I'm asking is, I just want to understand, because we have seen quite a bit of increasing price pricing of the chemicals. Obviously, the base chemicals and even the lubricant chemicals have been increasing the price in terms of China and our competitors. So, I just want to understand how these prices have been sustainable going across for a year or two, and how we are seeing because we are being benefited by two things. Hello.

Yeah. First and foremost, again I said I don't know how long this will continue, what will happen. Nobody can answer that today. So I have no idea about when the price will normalize. Absolutely no idea. I cannot comment on that part of it.

Yeah, I agree, but my question pertains to how much percentage of price increase we have seen from the base like pre-war era to right now in current state? About 10 to 15%. 20th of September. Okay. Okay. And are we getting any benefits of being the yen appreciation or rupee depreciation altogether? So that will ultimately expense out more on the imports that will ultimately help which we have been seeing in the domestic growth. Is that a call? Is that can be a call we should take or it is more on the product quality and the working capital of what they like to manage because ultimately shipments are being delayed right now?

There are multiple reasons that can influence that. Number one, availability. Number two, how much you can pass on when the prices are increasing or margins always come under pressure. One cannot pass on 100%. One has to absorb something because of the relationship of what kind of contracture you have with the customer. So there are multiple reasons. One cannot say that what's going to happen tomorrow. So we are a little bit cautious on that side.

Okay, got it. That's all from my side. Thank you.

Thank you. Next question is from the line of Anupam Agrawal from Lucky Investments. Please go ahead.

Thank you for taking my question. Sir, I just missed your comment on the CAPEX that you have done in FI26 across WAPI, Pakhajan, and the new project. And what will be the CAPEX in FI27 for different projects?

Well, FI26, we spent about 75 crore. 25 crore we spent on R&D, about 40, 42 crores on Pakhajan, and about 7, 8 crores into the WAPI. WAPI was mainly for some adjustment to the new product when you introduce you to this one capex. So that's the reason. In M527, we are looking at about 125 crore capex. That will be purely done at the Pakhasa.

And what will be the share of our capex for this MMP project?

Zero.

Okay, understood. My second question, sir, just alluding to your comment to the earlier participant, 15% increase in utilization will translate to 40 to 50% volume growth?

30 to 40, you can see that this is a product mix. What product which will sell, everything different that, but anything between 30 to 40, 40, 45% volume growth will happen.

Got it, got it, sir. Thank you so much, sir.

Thank you. Next question is from the line of Manjit Buhariya from Stamya Advisors, LLP. Please go ahead.

Thank you for taking my question. Would it be possible to share what percent of our revenue in Q4 came from long-term contracts versus fourth market out of the 246 crores and the same ratio for the full year 26?

Well, in Q4, it's a regular business, what we had from Q1, Q2, Q3, so there could be some new customer added there in Q4, but mainly from our regular customer, only the businesses came up, and that has helped us to grow the business. Right, sir. And I thought there

were certain long-term contracts you were looking at and then there were certain business you were doing in the spread market.

So is there a ratio within that which you can share? Long term, when you say long term, we have customers who buy on a regular basis, they buy either quarterly pricing or six monthly pricing. So that is about 40% of the revenue, and balanced 60% come from a spot, what you call, or the customer between your relations over time, and they buy as and when they require.

Thank you very much. And the second question was, you know, over the next two or three years, as you know, the next of our products goes up the value addition in our products, right? Will our gross margin also insert from the 40% in FY26, or is 40% the right level to think about?

I think 40-40, anything between 40-42% should be the right guidance here. What will help us as we are going to do more utilization of all the assets that will help us to leverage all our expenses, fixed expenses, and that will come down drastically, which will also help us to improve our margins. Got it, sir. And the last question, sir, I missed your response in the earlier question.

Out of the 125 crore QPICs for FY27, how much is going to be funded by the, you know, strategic contractor versus, you know, our sales?

I missed that response, sorry. Oh, no. 125 is nothing to do with the strategy. That's a separate. Take us all together. That has nothing to do with 125 crore. 125 crore is actually done by Yasuo Industries, by its internal accuracy, for its product, which we want to launch new, or where we want to expand further. Thank you so much. Thank you.

Thank you. Participants, to ask a question, you may press star and one. Next question is from the line of Yash Mehta from SKP Capital. Please go ahead.

So, thank you so much for the opportunity, first of all. So, I've got a few questions. So, the first is, how should investors think about competitive intensity from Chinese suppliers going ahead, especially in brand lubricant, addictives, and industrial chemicals?

Strong, very strong. They are very, very competitive, and they do come hard.

Okay, okay.

And Yasha has also mentioned strong demand visibility from Europe. So, has the India-EU trade opportunity resulted in better customer engagement and improved competitiveness or new inquiries from European customers?

Well, first and foremost, India, Europe and VTA will come in place only by early January. Hopefully. We are hopeful that it will come in by early January. So today what we see is our existing relationship, which is helping us to grow. Also, we have our team on the ground in Europe. Now they are almost a one-year-old team, so they are getting more mature, and we are confident that they will be able to deliver much better results to us.

Okay, okay. Yeah, got it. Thank you. Thank you.

Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Participants, if you wish to join the question queue, you may press star and 1. Next question is from the line of Karan Gupta from ACMIL. Please go ahead.

Yeah, so my question is regarding the DE guidance of 1,500 crore, what are the capacity expansion we have included in that, the WAPI and your pathogen is included in that? Yeah, WAPI.

When we talk about 1,500, the capacity expansion, what we did in FY26. This is included in that. FY27 could give some leverage for FY28. Definitely will give some leverage in FY28. And also the long-term contract which is signed will give us a leverage in FY28.

Okay, okay, and the margins will be maintained?

Yes, absolutely, the margin will be maintained.

And any sector-wise tools you can share, segment-wise, sector-wise tools you can share.

Sorry, I can't hear you properly.

Karan, I request you to please use your handset. Your voice is not clear. You are not audible clearly.

Now, now, I think it's audible.

Yes, please go ahead.

Yeah, so, there's 33% of volume growth. If you can share the breakup. May be product-wise, may be industry-wise.

Well, the maximum volume growth has come from the industry segment. I can give that much break-up to you. Whatever we gain is on, while there could be a slightly deep into our consumer

And the price we've taken, I think it's 10 to 15 percent, if I'm correct.

That has not happened across the year. That has only happened now, price growth. And maybe it happened in the last 10 days of March. Earlier, the price growth was not there. Price growth is now really kicking from April onwards. Because till March, we already have six prices with customers. So, we changed either the quarterly or the six months with our major customers.

Okay, okay. And just last one on the geopolitical scenario side, having this geopolitical backdrop, how you're seeing the quarter one, quarter two in terms of growth?

I have no clue on the crude side because I don't track that, honestly, but we see that the price volatility in our couple of solvents, strong volatility, some chemistry of sulfur-based chemistry, we see the strong volatility, but besides that, prices are quite stable.

Okay, then we are optimistic about the volume growth?

Yes, absolutely.

Any guidance you can give on the volume side?

We have already said that we will grow by about 15% on capacity duration and volumes are between 35 to 45%. Volume growth also will happen in FY27.

30 to 35 percent. 35 to 45 percent. 35 to 45 percent volume you're seeing and 15 percent on the capacity addition side.

Yes.

Okay. Okay. Thank you. Thank you.

Thank you. Next question is from the line of Nikhil Purwal from Perpetual Capital. Please go ahead.

Yeah, hi. Thank you for the opportunity. Paragbhai, my first question is just a clarification. So, the 125 crore CAPEX for FQ27, it doesn't include the CAPEX for the MNC, which is ongoing? Okay.

And once the plant for the MNC commercializes in 28, all these advance will be set up against future deliveries?

Yes.

Okay, and last question is on any problem on availability of Alpar?

There is a challenge. I won't say there is a problem, but there is a challenge to get what we need.

Okay, but the problem is that you are confident?

Yes.

Okay. I hope the higher inventory is adding you in this volatile environment now.

Yeah, to some extent, but we don't hold sulfur, unfortunately, so much quantity. One of the cheapest home material in our portfolio.

Okay. Okay. Yeah, that is it from me. All the way.

Thank you. Thank you.

Thank you. Next question is from the line of Laveena Jagwani from Spark Capital. Please go ahead.

Hello, sir. Just one question from my side. What is the current capacity utilization between WAPI and Pakhajan?

Well, for March, we utilize more than 60%, anything between 60% and 60% utilization, up until March, FY26, that was utilization. Currently, the cycle, in the current quarter, it's been improving, but I don't have the date, number of implement, how much we are improving.

What will be the individual capacity utilization for each plant?

Well, let me be honest. We will always talk about the Yosho level rather than talk about the individual capacity level. So, I like to stick to the Yosho level capacity.

Okay. Thank you, sir.

Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments.

Thank you very much, everyone, for joining this call. I appreciate your time. Thank you. Have a good day.

Thank you, sir. On behalf of Yesho Industries, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.