Thank you so much, [unclear]. Good evening, everybody.

Thank you so much for attending the call on a Saturday evening. Let me start by welcoming everyone and a warm welcome for the quarter 1 FY '27 earnings call of the company.

I thank you for joining the call. Let me first speak on the business environment.

The quarter performance shall be viewed in backdrop of geopolitical headwinds impacting raw material supply chain and its cost. Non-availability of shipping vessels impacted timely export of goods leading to supply side challenges.

Further, the raw material cost in China were not impacted as much as they were compared to India. Despite external challenges during the quarter, Clean Science reported a steady performance during the quarter.

The company was able to improve revenue, maintain operational stability, and continue progress on its value creating initiatives. We are also pleased to report our highest ever consolidated sales in company's history reaching approximately 264 crores during the quarter.

Let me speak on the standalone business performance. On sequential basis, the revenue improved by 5% to 203 crores largely due to increase in realization in all the products.

The EBITDA and the PAT margins are at 43% and 36%, translating into an EBITDA of 87 crores and PAT of 73 crores. The Q4 FY '26 EBITDA and PAT after adjusting the one-off operative expense transactions is roughly 83 crores and 53 crores respectively.

Thereby, the current quarter EBITDA and PAT reflected a growth of 5% and 37% respectively. The Q-on-Q increase in revenue was primarily led by improved realization in all the segments.

Speaking on YoY comparison, the sales were moderated by 6% during the quarter. The revenue moderation was primarily led by decrease in sales volume, which was on account of supply side headwinds as mentioned earlier.

The demand environment continues to be steady. On consolidated business performance, the HALS scale-up continues to drive operating leverage and sustainable profit improvement.

HALS is now 22% of our sales and we have been able to de-risk our reliance on the top four legacy products by moderating their share from 85% in Q4 FY '23 to 60% this quarter. Another important point was that CFCL reached an important milestone by becoming operationally self-sustaining.

Having fully recovered its operating expenses, we now shift from investing phase to monetizing phase. Our first year of HALS sales were entirely domestic.

In contrast, the current quarter reflects a much more diversified geographical mix with exports contributing nearly 50% of the HALS sales. On sequential basis, the consolidated revenues grew by 7% to 264 crores.

EBITDA and PAT are 37% and 28% respectively, which stands at 96 and 73 crores respectively. On YoY basis, the revenue increased by 10% during the quarter.

The increase in revenues primarily led by consistent scale-up of our HALS business. Hence the sales profile looks like: performance, pharma, and FMCG, respectively 83%, 10%, and 7% respectively.

I would like to take a minute to discuss the key business development which happened during the quarter. Point one, we entered into a strategic collaboration with our Swiss partner called as GENIUS CHEM.

This represents an important step in the next phase of our HALS journey. This will provide Clean Science an entry into differentiated advanced grade of HALS chemistry that are technology intensive, value-added, and aligned and evolving global customer requirements.

Taken together, these developments reinforce our confidence that HALS platform can evolve into a much stronger growth driver for the company over the coming years. With expanding customer acceptance, improving export penetration, and a richer product basket, we believe that the platform is steadily moving towards more meaningful scale, stronger margins, and greater strategic importance within the company's portfolio.

The stabilization of the hydroquinone catechol plant has been largely completed and our operations are now progressing well. We have received the necessary customer approval and are ramping up for commercial supplies.

As the production scales up, we expect a gradual increase in revenue in the coming quarters. On capex subject update, the Performance Chemical 2 will get commercialized by quarter 3 FY '27.

During the quarter, capital infusion in the subsidiary was approximately 100 crores. With this, total investment in the subsidiary stands at approximately 850 crores.

I think that's all from my side, and I'm open for any questions and answers.

Good afternoon. Thanks, Siddharth.

Got couple of questions. First on the HALS, what was the volume this quarter?

Because to consol minus subsidiary it shows we have grown close to 170%. What was the mix of volume and pricing, and how much was the contribution of the products beyond 701 and 770?

In terms of price realization, Sanjesh, the product mix has improved. From 770, 622, we are now moved to the higher grades.

I think the average prices have moved from 440 odd to 5 550. This is in terms of price realization.

In terms of volume-- Sanjesh, volumes are basically crossed 1,000 ton and the product mix has significantly improved to the higher grades of HALS, meaning last quarter where almost 50% of contribution came in from HALS 770, this quarter it has come down to 35 odd percent. Hence, the gross margins have improved on the subsidiary level.

Got it. Got it.

Siddharth, we were looking at towards close to 3,000 metric ton for HALS this year. You think you can do much better than that?

We have started with 1,000 metric ton in Q1. Yes,

yes, my HALS guy says, yes, they can do it.

What are we looking at now? Even the export has picked up, you mentioned that 50% of the revenue now HALS is coming from the export market.

What is the realistic number we are looking at in HALS for FY '27?

Annualize this quarter, it's 250, 300. If you just annualize this also, this will reach to 250, 300 crores of annual revenue.

That we are very comfortable, correct?

Yes, that should be comfortable. Now

second question on the gross profit margin. Last year we were hovering under 40%.

This year consistently above 40%. Was there any benefit of low-cost acetone we were carrying and price increase has helped us and lower raw material cost is benefiting on gross profit margin, or you think this 43%, 45% of gross profit margin in this segment is sustainable?

I think it should be sustainable and we had no real advantage of cheap raw material. In fact, we started moving to higher grades, and of course, improving our operational efficiencies has helped us to get to these margins.

Got it. Got it.

One last question on HALS. Can you give us more detail on GENESIS?

Are we also trying to acquire 25% in the distribution company? It's more like a distribution company, right?

They're not really a technology company.

How did you get that? No,

I thought I read that in the press release, I was a little confused. What is the transaction between us and GENESIS?

No, no,

the thing is if you go through their website, the founders are highly technical people, and they have come up with advanced HALS technologies. They have developed and patented products in Europe, US, Japan, and I think also China, I am unsure of China.

These are far advanced level of NOR HALS, which is called, and these products will now be made at Clean Fino-Chem and supplied globally. With this, we will get entry into some of the very advanced level of customers who would also buy these advanced grades, but also help us in our other portfolio of HALS.

It's a very,

very tech-driven company.

The tech transfer is happening from them to us, or how is it?

Yes. Yes, yes.

They have developed this very interesting technology and this patented product and the tech transfer is happening and the plant will start in quarter 3 this year.

What is Clean Science paying for all this?

Sorry?

The tech transfer and all is for the production and we will be official contract manufacturer for this Swiss company? Is that the way to think at it?

We are contract manufacturing with the tech belonging to the customer.

No, no, no. We are also doing joint marketing.

Okay.

We

will

also do the joint marketing this product.

The product will be exclusively supplied to them or we are free to supply to anybody?

We have some geographies defined between us so that we don't want clash, but everything will be like a co-branding. Yes, it will be like a co-branded product where their name and our name will appear on the packaging and in all the documents.

Got it. What is the revenue potential we are looking for from this partnership, say in '29?

'28, sorry.

In overall three to four-year period, we are looking at 300 to 350 crores of revenue. Additional revenue.

From this partnership.

Absolutely. Got it.

Got it. That's pretty clear.

Last on the legacy business. The decline on a YoY basis was largely because the non-availability of the raw material?

Yes.

Or it's only because of raw material

not available? Yes, yes, yes.

Because the main primary supplier in India had to shut down the facility due to non-availability of their key raw material, propylene. We had those I think about 2 weeks of odd shut down which led to this.

The demand is absolutely steady.

Starting Q2 we should see all those recouping? All the volume we should be to the normal level

or

there is still challenge?

Volumes is not an issue. No, volume is not an issue.

Raw material pricing is an issue and availability of shipping vessels, I'm sure this is across the industry.

Got it. Got it.

One last question. What is the now economical difference between anisole to MEHQ versus HQ to MEHQ?

Are we still competitive or you see Chinese competition still being intense in the MEHQ and value chain?

See, so far we are not seeing, otherwise you would not see these numbers, right? Correct.

We believe that HQ is still not as competitive for us to threaten the market share?

I think so.

Clear, clear. Thanks, Siddharth, for all those answers

and

best of luck for the coming quarter. Thank you.

Thank you.

Hi Siddharth, thanks for the opportunity and congratulations for a good ramp up in HALS. First, a clarification on this strategic collaboration.

You said the product will be jointly marketed by you and the partner here. The global markets are divided that this X countries go to Clean Science and the balance go to you, or how is it?

This 3 1/2, 4 billion

that's More or less. See, let me answer one thing at a time.

See, they are based in Europe, they are present there, and they have already conducted a lot of trials over the last couple of years and have established a solid customer network. Okay.

There is no point in us duplicating those efforts. Hence, there has been a clear geographical differentiation.

Wherever they have done enough work, they will market it. Wherever they are not present and we are present, we will be doing it.

It's a very, very collaborative partnership where we have very open discussions to understand where who is where and wherever strengths to be needed, we will do the needful. Because it is all going under co-branding.

Sure. This 3, 3 1/2 billion, 300, 350 crores revenue that you are talking of, this is as a sort of output of this collaboration.

Is it the case that you are manufacturing from them on their behalf as well, for whatever they sell you will be manufacturing here in India? Or this 350 sale is only from your fresh sale as a B2C or B2B2 B2C?

No, it is only from us. Their sale is over and above.

Okay.

Say I'm just giving you a hypothetical example. If I am selling them at say €30, that is my revenue.

If they sell at €40, that €10 is their revenue.

Which is fair. Your direct sale is this 300 crore target that you are talking of, and if you are manufacturing anything on the partner's behalf that's a top-up, or everything is inclusive of this 300 to 350?

Direct sales to the market is incremental to this, yeah. No, no.

300 crores is only with them because they have prescribed volume which they have some understanding on

or

commitments on. Over and above whatever we develop, say if we sell 100 ton in India, that is over and above this.

Okay.

Okay. Got it.

Fair to say that given that you are saying that this is further differentiated and more advanced versions of HALS grades, we were not supposed to manufacture these ones or there is some overlap, and this will be having much higher realization here?

No, no, no. This is a further better product and one of its kind, and hence these are all patented products by them.

Sure. Whatever we are making on HALS using our tech that continues as it is, which is the ramp-up that you're talking of.

That continues and one of our raw material, 2020, which we will be making will be a key starting material for this chemistry. This is an additional market for our own 2020.

Okay. That's clear.

Secondly on the Kemin agreement wherein we are supplying the key ingredient for food and feed, if you can put some light there?

The light is that we have very, very close relationship with the customer over the last decade. I think they are they they are increasing their demand, we are being fulfilling them.

Because we would be making additional capexes on some of these products, we thought both of us decided to enter into a longer-term contract for a minimum period of 5 years with for a minimum period of 5 years where we will be supplying their needs of these products and that is where it is. It's a very, very interesting collaboration for us because this gives us an assured volumes from the largest customer in the world.

They currently buy BHA, BHT, TBHQ, which are all and AP, these are all our product portfolio which we supply to them and we have now an exclusive or more or less, we will be their supplier for all these products.

Sure. A few clarifications.

One, Kemin must be getting this sourced from somewhere, or was it captive for them, and whom are we replacing? No,

no, Kemin is an end customer, they make formulation for pet food industry. They are a manufacturing company with global locations.

We will be supplying these three ingredients to all their global locations.

Okay. The customer continues just that the size and scale is much higher now and you are getting a 5-year commitment.

This is not a new customer. He continues to be our existing customer for 10 years.

We'll just increase the wallet share with that customer.

Sure. Will this commitment-- Yeah, go ahead.

Will this commitment?

Sorry. Will this commitment require you for another incremental capacity addition or the existing capacities are sufficed to fund this?

No, we will need additional capacities and we have already started the process of that.

Sorry, there will be requirement of additional capacity, you said?

Yes. Yes.

Yes.

Okay. Thank you.

Third bit on the margin profile on the standalone side. You highlighted in your initial comments as well, the Q-on-Q increase is largely led by pricing, volumes are flat.

The margin slight dip that we are seeing here even on a Q-on-Q or on YoY basis is largely because of the pricing volatility, RM volatility, or there is a further pressure on the end product pricing also?

No, I think a major factor is the raw material pricing because of this Middle East crisis. You can see there has been increase in our RM prices.

End product prices here remain stable. From a competitive intensity perspective, no changes at the global level?

Not at the moment.

Okay. Fair enough.

Just on the standalone side, what could be the domestic export mix for the quarter if you may help with that number, please?

65%,

35%. 65%, 35%.

Okay. Lastly, if you can guide on the capex, what should we take as an annual run rate going ahead given there could be some capacity expansion plans there?

Actually we have not worked out in that detail, but it's not going to be too much. We are still working on it and I'll be able to let you know in due course.

Okay. No worries.

Thank you and all the best. Thank you.

Thank you.

Good afternoon. Good afternoon, thank you so much for taking my questions.

First one just on the supply chain disruptions that impacted the volumes in the quarter. Was just wondering if it might be possible to share some color on how much better the earnings would have been.

I know the quarter is already significantly improved, my compliments on that. Could it have been somewhat significantly better had it not been for these issues?

Yes, of course, we lost couple of weeks, I think to be precise about 2 weeks or so in production. Of course, if we would have been able to produce, we would have got higher revenues, that is number one.

Number two is also with these all labor issues we faced because of these gas issues and all, that was another challenging time. If these issues weren't there, then I think you would have seen a better quarter.

Things are looking much smoother now in the second quarter, is it?

Yes. The issues which I mentioned with the prices are volatile, that is still an issue, but the availability is there, which was not the case in quarter 1.

Yes, I think all those issues are now behind us, except the RM volatility.

Understood. On the price hike side, were you able to fully pass along all the input cost increases that happened last quarter or are there still some further increases that you're taking?

No, wherever we had long-term contracts, we are respecting most of them. In that cases, we are not able to pass on.

Also it is not like we were not able to pass on 100%. In some cases, we were able to pass a percentage of the price increase.

Fair enough. Compared to the June quarter results which we have just seen, we should not expect any significant price increases benefit next quarter, right?

Yes, price increase might be a big question.

Understood. Second thing was just on this 300 odd crore revenue number that you quoted for the GENIUS CHEM tie-up.

Just wanted to clarify that this is a cumulative number?

Of course, it's a cumulative number over the next 4 years.

Yes, understood. The peak number in year four might be say some 100 crore plus minus somewhere in that range, is that fair?

100-plus, yes. Yes, that understanding is right.

Great, thank you. On the Performance Chemical 1 and 2, I know you made some comments, but is it possible to just share your thoughts on how both those projects are going?

The hydroquinone catechol, I mentioned we started the line somewhere in quarter 3 between October, November, December, the trials. The product trial started in first couple of months.

Of course, then we had these crisis, raw material shortages. We were not dedicating too much raw material to that facility, but running our regular businesses.

Again we restarted the operations in April, earlier quarter 1. Now the plants are more or less stabilized.

In the meantime, we took this period to sample with our all international existing customers, and most of this sampling processes are almost over, we've got some approvals. Now I think starting August, September, the revenue should also start coming in.

Plus, there will be operational efficiencies improvements will also keep happening as we ramp up the capacities.

Great. Thank you so much.

Just

one last-- Performance Chemical 2, the plant we expect to start in quarter 3, which could be November, December sorts.

Yeah. In terms of the ramp up for Performance Chemical 2, any thoughts on that aspect?

Thoughts in the sense?

Just with regard to timelines, should we expect a fairly--

Let's say quarter 3 and quarter 4 will majorly go into setting up the lines and getting the right product quality. We expect the major revenue should be come from quarter 1 next year.

Great. Just one last thing from my side on the Kemin agreement, congratulations on that by the way.

Thank you.

How large is this customer as maybe as share of the overall world market for these relevant products? That was the either question.

I guess this agreement now basically preempts any other possible new entrant into these products from getting into a tie-up with this company, right? Yeah.

Absolutely.

Absolutely. He's the largest buyer of some of these ingredients, and the relationship now gives both of us, both Kemin and us, the strategic alliance where we make sure that there is no shortages.

In all these difficult times we have been able to supply without any price hikes, which has given them that confidence over the last several years. Hence we have entered into this definitive 5 year of contract.

Yes, you are right that I do not see any scope for any other entrant or new entrant or any competitor from India or globally to get into this alliance.

Got it. Thank you so much, Siddharth, for all the questions, and wish you all the best.

Thank you.

Good afternoon, sir. Congratulations on a mixed set of numbers.

Sir, as per your presentation in this quarter where you have mentioned that HALS stands for around 22% of sales. I just would like to know from you in FY '27, FY '28, how actually plan for that HALS will constitute around which percentage of sales for our company if you just give us few colors on it?

Achha, 20% to go to-- So

basically I told you in terms of revenue this year the target is between 250 to 300 crores.

Okay.

That could be around 30% to 35% of overall revenue growth. For the next financial year, let us work out, then we will come back to you.

Sir. Thank you so much for the information.

Second, sir, on HALS, I just would like to know from you in domestic and export both markets, who are the core competitors for these products as you have mapped out? If you give us the informations about this.

We have two major competitors in Europe. They are namely BASF and Sabo.

We have couple of them in China, major is Rianlon and Sunkean, who is also called as United

Chem. Sir.

Lastly on the financial front, in this quarter on a consolidated basis, I have seen that other expenses, it is surged by around 13%. Any primary reason for this?

I'm not sure you're referring to other expenses, right?

Yeah. In other expenses, I've seen that in consol level it is rises around 13%.

The primary reason if you can--

Sequentially there is a CSR impact. In quarter 4 there was a high expenditure towards CSR compared to quarter 1.

There was a provisioning towards some other expenses which were done in quarter 4 which was not required in quarter 1. This has led to lower other expense.

Okay. Can we assume is it for one-off kind of things, right?

Yeah.

Quarter 1 you can assume to be a sustainable number.

Okay. Thank you so much for the clarifications.

Okay. Wish you all the best for the FY '27 and FY '28 as well, sir.

Thank you so much.

Hi. Hi, Siddharth.

Siddharth, my question regarding this new HALS that you will be manufacturing through the collaboration. What differentiates this HALS from the HALS that currently Clean Science is manufacturing?

See, this is a very technical question, but I will still try and answer in the most simplest form I can. All the HALS we make are called as alkoxy HALS.

I don't know the 2020-- It is not alkoxy, the NOR is alkoxy. Oh sorry, sorry.

We make the free hydroxy. With this company, we will be making the alkoxy HALS, which are called as the NOR.

These are higher grade of HALS because their performance is far higher and superior compared to the conventional HALS which are made. However, these advanced levels of HALS are also far more expensive compared to the traditional HALS.

That is why the applications are also niche compared to the traditional HALS.

Okay. What about the end user?

The industry will remain more or less same or it will be very specific to

a particular industry? No, ideally because of this higher grade, these are more applicable to agricultural film businesses.

Where higher and harsher environment is there where these products are used. These NOR will be used in such applications where tougher environment is there in terms of agro films.

Also with this collaboration, what we get is these existing customers also use regular grade of HALS where we anyways are present completely. It will help us in cross-selling to the same customer.

Okay.

Okay. Do you see that these new HALS will replace the overall HALS that is being used or consumed by the end user, or will it be the totally new market creation?

For us, it will be a totally new market in terms of this particular segment of product. If a customer is using NOR, he will not replace it with a regular HALS.

Okay.

Yeah. Sorry,

sorry. Go ahead.

Go ahead. Of course, this will be a new segment of customers which will come up to us.

Okay. As far as the global HALS market is concerned, will these replace the existing ones or it's a completely new market?

Completely new market which we were not catering at all today. The NOR HALS market is different which we were not catering.

Now we will start catering.

Okay. Thanks.

Thanks a lot. Thanks, Siddharth.

The NOR HALS market is currently dominated by only BASF.

Okay. Okay.

Okay. Yeah.

Thanks. Thanks, Siddharth.

All the best.

Thank you so much.

Yeah.

Thanks. Thanks, Siddharth, for taking my questions again.

I got two questions. One on the contract with Kemin.

Now that they are signing a 5-year, are we giving any volume-based discount? What is an advantage from a Kemin perspective for locking in the contract?

Sir, it is a supply security.

It's a supply security. There is no additional commercial benefit we are transferring to them?

I think these are little finer details, but I think you can consider supply security as the major outcome of this contract for both of them, for them as well as for us for the complete volume offtake. The offtake which they will take from us.

Got it. Got it.

Second question on the GENIUS CHEM one. Are these same product goes as a UV stabilizer or the application is entirely different?

The application goes into agricultural films, which is a very large market in globally, and currently only I think more or less covered majorly by BASF.

It goes as an additive, right? The use case remains the same.

Use case remains the same.

Just the application is agriculture film which are spread across the field, right? That's the one you're talking about.

Agriculture

higher grade of agriculture films. Sometimes even the normal some of the grades are also used, but these are for more harsher environment conditions where more pesticide, sulfur, chlorine is present in the environment.

Got it. Are we putting up any fresh capacity because of the two contracts or this can be catered with the existing capacity?

No. No.

Both are additional investments.

What kind of number are we looking at there for the capex?

Basically we are still working on it, but in terms of GENIUS CHEM, I think the plant will start. Where we are expecting for that particular product, we will be putting about 25 odd crores.

Got it. Got it.

That's clear. That's clear.

Kemin contract, what is the volume increase are we expecting from what they are buying as way? What could be the quantum increase because of the contract and higher market share?

Sanjesh, it is not Camlin. It is Kemin.

Kemin. Sorry.

Sorry. My bad.

My bad. Yeah.

Kemin is American. That is your emphasis.

Kemin is probably our offtake will increase by 20%

to 40%. 20% to 40% over 5 years?

Yeah. Or

you will start seeing immediately?

Start immediately, probably in the next 2-3 months time.

That's clear. Thanks.

Thanks, Siddharth, for answering all those questions.

Thank you.

Thank you so much for giving me again another opportunity, sir. Now, I would like to know from you that in this quarter you have done 100 cr of capex in Clean Fino-Chem Limited.

Sir, if you can please share us the long-term structural plan that you have built for this wholly owned subsidiary. That would be highly helpful.

All the products now in future in the company will only happen in this subsidiary, which is Clean Fino-Chem. All the businesses, all the new products, all the new lines will all happen in Clean Fino-Chem only as a company.

Okay. Okay.

Thank you so much for the clarifications. Finally, sir, as we all know, the geopolitical issues are actually continuing and all that, and this is unpredictable and uncertain, we all know it.

Sir, how Clean Science is actually planning out or mapping out for going ahead for the rest of the three quarters? If you please put some color on it, so that would be again very much helpful for us.

Basically, sir, this is all about supply chain. We are trying our best to have all supply chain, all raw materials to be delivered and to be present so that there is no delay in any of our productions.

That we have planned quite well, and hopefully we should not see any stoppages in any of our facilities in the next coming quarters.

Okay. That is what fully confident you are that stoppage will not even there.

It's just a casually I'm just asking you, if you just give us few informations regarding it. It is 100% confirmed from your end, right?

Sorry, what is confirmed?

No, no, that supply chain that you said it will not stop, that you are planning or mapping out that you said, it is from your end totally you are confident on it? That's I'm just asking.

See matlab itna confident nahi hai ki lock kar diya types hai. But-- Sir, that is uncertain and nobody can control.

This is exactly your point, nobody can confirm. Even I cannot confirm 100%.

Yes, yes,

yes. Exactly.

No, sir, as you said that just for that particular reason I just asked you. If that happens, so that will definitely better for you and for everybody as well, sir.

That is what I'm just asking.

Yes,

sir. We will take that update on Q2 as well, sir.

Sure.

Okay.

Thanks for the opportunity and good sequential performance plus the two new collaborations. First question, again on the GENIUS CHEM, in terms of tech transfer, is there any transfer fees or royalties that are attached to it or it is just

a

capex and then-- Okay, it's purely capex and then revenues will start flowing in. No.

Absolutely.

In terms of since these NOR HALS are probably niche set of products, the margins will be higher than the current margins on our entire basket?

Yes, technically it should be.

Perfect. Second question, in terms of HALS, you mentioned that this quarter there was almost 50% exports and 50% domestic, and the component of exports has increased tremendously.

Is it because of the high-grade HALS that we are manufacturing where we've been able to sell into the exports market and where now we are seeing a good amount of traction?

See, the point is over the last 1 year the sampling, paperwork, all this is happening. See, these are very large accounts which do not come very quickly.

There has been a lot of back and forth which was happening to get approvals to these accounts. We have now started seeing these approvals coming in, trial businesses happening, and now commercial shipments have started.

This also gives us confidence that all the grades of HALS which we are producing today, which are the higher grade as well as our commodity grades, are now completely approved and as per quality with other competitors in line. This gives that confidence and now you can see these ramp-ups are happening in advanced levels of HALS also.

Plus, with this collaboration with GC, with this further higher grade of advanced HALS will open doors to further more customers globally for us.

Right. Just one last clarification.

Compared to last quarter, in terms of the supply chains, things have been better during the month of July? See,

the supply issues have come down definitely because now I'm sure all other companies have also started importing and keeping those safety stocks. The basic concerns remain is because of these volatility in these discussions between these particular countries, the prices of crude oil keeps moving, which impacts the prices of basic raw materials, which impacts our pricing.

There will be issues in profitability, but not with respect to supply position is what my understanding is.

Perfect. Thanks a lot and all the best, sir.

Thank you so much.

Hi, good afternoon, sir. I had one question on the HALS business.

We have around 10,000 ton capacity. Just trying to understand how much of that would be the higher grade where like 70 to like 2020 and then-- See,

we are not getting into these sub divisions. We are not getting into this subdivision, but on more or less basis to just give you a thumb rule, we would be probably 40-odd 30%, 40% lower grade and balance should be higher grade.

Now which are these higher grades, I think it's too much detailing, but yeah, this is the split, 40-60 is what you can assume.

Got it. Sir, and are we currently in a position to produce NOR HALS, or that would require some plant and machineries?

No,

I think this is a completely new setup, new technology which we have acquired from this partner. Yes, it needed a capex and hopefully we'll start the production in Q3.

Got it. Sir, second question, I joined a little late, might be a repeated question.

On the Performance Chemical 2 plant, are we on track for September production beginning? No, no, no.

I think there will be delay because of all these labor issues we had over the last couple of months. I think there would be delay and we expect the plant to start in November-ish.

Okay. That will be commercial production or trials in November?

Commercialization. I think in between November and March will be stabilization phase, and you can expect any revenues from quarter 1.

I see. Got it.

All right, that's all from me. Thank you.

Thank you so much.

Hi, sir. Am I audible?

Yes, sir.

Hi, sir. Sir, thank you for the opportunity, sir.

Sir, I've been with you guys since the IPO days. As a layman term, I had a few queries.

The first query was regarding the HALS export. Since we're exporting more HALS now, do we see the EBITDA margin with profit to increase for 2-3 quarters for future years, round the line?

We see

second query regarding--

The EBITDA margins will keep improving because as we get into sales of more and more higher grades, the EBITDA margins will keep improving. Plus, running the plant over the last couple of years, the operation efficiencies also kicks in.

We are very confident that the EBITDA margins will keep improving.

Sir. Sir, second query is regarding the last two, three concall you had issues because of the Chinese competitors that were affecting the business.

Also because of the tariff, now we have a sort of idea about what tariff US is impact on India would put on India. Do we see any orders coming from the US or any inquiries from the US for it?

Is it good as of now? Has the China competition reduced?

Our exports to US have been very, very steady.

Sir. Sir.

Sir, your third thing is regarding the Middle East crisis. There are two parts to it, right?

One part is the prices of the raw material and the second part is the shipment cost. Now both are high, right?

That will impact our profitability maybe for some time till the

crisis

gets resolved. Is my understanding correct?

Absolutely correct.

Okay. Sir, the fourth part is we had, I think, the Europe deal signed.

It will be active, I think, next year. We have our subsidiary in Netherlands.

That subsidiary is for future planning, right, so that we can cater for all the clients from Europe? Is my understanding correct with that as well?

No, we will be starting the subsidiary in mid-September and it'll be operational starting then.

That will cater to Europe demand?

Of course.

Sir. All the best,

sir. We

just waiting to grow with you guys, sir. One more thing, sir, from the last two calls, I was not able to ask any questions.

Can you do one thing? Can you allocate 10 minutes of your concall to retail investors at the end so that if the retail investors have some queries, they can ask you?

Because we have only one medium to contact with you, sir.

No, sir, absolutely. Retail investor, there's no issue, absolutely

yes. Yes, sir.

Thank you very much, sir.

Thank you so much, sir.

Thank you all for attending the company's quarterly performance. I really appreciate all of you taking your time out.

If there is still more clarity, you can reach out to us. Thank you so much.

Have a good one and have a great weekend.