All right, let's get into another earnings conversation. We do have Vinati Saraf Mutreja, Managing Director of Vinati Organics joining in.

The company's revenue in the first quarter grew by about 28%, the EBITDA, however, grew by just 7%, margins compressed, and the net profit on the back of that grew by about 4.5%. Vinati, thank you so much for joining in, and that really is the first question, because you've guided for 26% to 27% margins for FY27.

Now, despite the delay in pricing, or passing on the raw material price hike, are you confident of this 26% to 27% number? What kind of products will be margin drivers for you by the end of this year?

Hear me? Hello, good morning.

Yes, we can hear you.

Great. This quarter we saw an improvement in the revenue.

A couple of factors have led to revenue growth. One is of course the rupee depreciation.

55% of our revenues do come from export. Also, one significant thing is that the raw material prices increased a lot owing to the Middle East conflict, especially starting in March, April, May, some of which we were able to pass on as price increase.

With that, the volume growth we saw in certain products, such as antioxidants and certain other new products, and that is what led to the revenue growth. Now, consequently, the EBITDA margin did not grow by as much because most of it was just rupee depreciation as well as RMC increasing.

Right. You've guided for 26% to 27% margins by the end of this year, and you're confident of that, right?

I think that we should be able to maintain. Even this quarter, I believe, the EBITDA margin is in that range of around 26%.

That is taking into account our entire product mix of ATBS, antioxidants, butylphenols, as well as IBB and other derivatives.

In the second half of this year, how much would ATBS contribute in terms of extended capacity? Because you've increased capacity from what, 20,000 tonnes per annum to about 60,000?

That, and even Veeral Organics starts in October 2026. The second half will have a lot of these new products coming in?

ATBS we have expanded capacity from 30,000 to 50,000 of the high qualities, that is the metrics. We do expect some demand recovery in ATBS starting October.

Veeral Organics, like I had mentioned, the plant is under re-engineering, which should get completed by December, and we expect more revenue coming in from January. The second half should be better than the first half, and hence we expect overall, let's say volume growth, maybe translating into revenue growth also, of at least 15% this year, and consequently EBITDA growth as well.

This particular financial year, how much would be the incremental revenue from the ATBS capacity? Veeral this year would do how much?

Because on a steady state you said could do about 120, 130 crore?

Veeral Organics, the full potential on a steady state at 70% to 80% capacity utilization will be close to 400, 500 crore. Just this year, starting FY28, if I look at starting March 2027, I would expect about 150 crore from Veeral Organics itself.

Right. Okay.

All right. Hi, Vinati, good to see you.

Another debatable issue which some analysts have written about is about anisole. That's the key raw material for the new product line, I believe.

What they're saying is that it's cheaper when it's imported in comparison to when it's produced in India. Could you tell us what is your take on the situation?

See, yes, anisole we are going to make from phenol, and it will always be a make-or-buy decision. If it is cheaper to import it and buy it, then we will not make it.

We will import it, buy it, and then convert it into MEHQ as well as some other products that we are into. If phenol prices remain low, then we will produce our own anisole.

I don't think that is any factor as such in revenue or EBITDA growth.

All right. Just a final question before we let you go.

You've embarked upon a serious capex as well, which is currently still underway. If you could give us a sense on what your ROCE could decline to once the capex is at its peak, and by when does it start turning, and what the peak could be, and by when?

I think we are presently at an ROCE of about 15% to 16%. I think once we achieve fully capacity utilization of our capex, one can expect improvement in the ROCE up to 20% after 2 years or 3 years.

Having said that, we are making some new investments in downstream products, in some of our forward integration products, in butylphenols, as well as MEHQ, as well as 4-methoxyacetophenone, and a few isoamylene-based derivatives, as well as adding a few antioxidants to our kitty.

Antioxidants you said would be how much? You said that you are also considering new capex.

How much would that be roughly in value terms?

Actually, the marginal new capex in antioxidants will not be much. We will start achieving full capacity.

We're already running at a very good run rate. The AO market has improved quite a bit in the last 3 months, and we have seen realization improvement as well.

At the marginal capex, we will be able to add some new antioxidants, and soon we will be reaching a 20%, 15% to 20% ROCE in the additives business itself.

ROCE doesn't go below this 15%, 16% in the near term as new capacities come on stream before they start to contribute positively, right?

Because actually most of the capex has already been done. ROCE can only improve as the utilization increases.

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