Thank you. Good afternoon, everyone, and thank you for joining us on Aarti Industries' Q3 FY26 Earnings Conference Call.

Today, we are joined by senior members of the management team, including Mr. Suyog Kotecha, Executive Director and Chief Executive Officer, and Mr.

Chetan Gandhi, Chief Financial Officer. We will commence the call with opening remarks from Mr.

Kotecha, followed by a Q&A session, where the management will address queries of the participants. Just to share our standard disclaimer, certain statements that may be made in today's conference call may be forward-looking in nature.

A disclaimer to this effect has been included in the results presentation that has been shared earlier and uploaded on the stock exchange website. I would now invite Mr.

Kotecha to share his perspective. Thank you, and over to you, sir.

Thank you, Nishid. Good afternoon, everyone, and thank you for joining us for our Q3 FY26 earnings call.

We are pleased to have you all with us today as we discuss our performance and share perspectives on the business environment and the road ahead. The global operating environment during Q3 continued to remain challenging and dynamic.

Persistent geopolitical tensions, ongoing trade realignments, and uncertainties around global demand have kept volatility at elevated levels across commodity and specialty chemicals value chain. In particular, trade actions and tariff-related disruptions in the US had necessitated agility and swift recalibration.

Against this backdrop, we believe the company has demonstrated resilience and adaptability. Our globally balanced portfolio with proactive diversification of the export mix towards US, Europe, Middle East and Africa, and other select countries, along with a calibrated approach to the US, has helped us sustain and grow volumes while managing risk.

In the last few weeks, we also observed three major events which will positively impact the chemical sector. First, India recently concluded the India-EU Free Trade Agreement.

While the near-term impact of the deal may be limited, this landmark deal is expected to generate large growth opportunities for exports and strategic partnership possibilities in high-end specialty chemicals in mid to long term. The second event that we are closely monitoring is around the anti-involution strategy adopted by China.

This policy shift aims to curb the hyper-competition and the excess capacity that have historically led to the dumping of chemicals at lower prices. As China prioritizes higher-quality growth and enforces stricter supply-side discipline, we anticipate a more rational global pricing environment.

For integrated and quality-focused players like AIL, this transition could serve as a structural catalyst for sustainable margin recovery. Lastly, while we were managing to navigate the US tariff headwinds, the recently announced US-India trade deal does provide a sigh of relief and is expected to boost the business in the US in coming times.

All these three macro factors point to a structural shift in the global trade that favors India. Coming to the financial performance for Q3 was largely in line with previous quarter with incremental upside on the top line.

Revenues stood at ₹2,492 crores, an increase of 11% QoQ, driven by volume growth across products such as MMA, NT, DCB. During the quarter, the company, while absorbing part of the US tariffs, had witnessed the resumption of US volumes, leading to higher capacity utilization and better operating leverages.

As a result, EBITDA surged to ₹323 crores, making 11% QoQ increase. The company has provided for an one-time impact on account of implementation of the new labor code to the extent of ₹15 crores as an exceptional expenses for the period.

The company still awaits the state and central government notification to refine its working, and hence will take appropriate provisions, if needed, once further clarity is available. Exports for the period constituted about 65% of the total revenues for the company, the highest both in terms of percentage share and also in absolute basis.

Further, the increase in export has resulted in an increase in working capital, as a result the debt and interest cost have increased marginally. Despite some increase in finance cost and one-time exceptional expenses due to new labor code, the profit after tax for the quarter, driven by higher operational performance, surged to ₹133 crores, an increase of 25% QoQ, reflecting the robust operating performances supported by the increased contribution from the cost-saving initiatives and economics of scale at higher capacity utilization.

Going through sort of business segment reviews, the energy business led by MMA continued to remain a key growth driver. Volumes have been robust, supported by strong demand and favorable feedstock spreads.

While the US market volumes have resumed and are expected to stabilize, we continue to develop alternate markets with focus on Europe and are confident in our ability to scale volumes in these regions over the medium term. Our efforts to engage with global majors in this field is expected to start yielding benefits in the forthcoming year.

While near-term margins continue to be volatile due to evolving market dynamic, the structural strength of the business remains intact. Notably, we have begun to realize operating leverage benefits driven by increased MMA volumes.

Given the fast-growing business environment for this segment, we have taken a steadfast measures to further scale up capacities from about 290+ KT to about 360 KT, and expect the same to be available by end of this fiscal, that is end of Q4 FY26. Agrochemicals and pharmaceuticals continue to see stable volumes, but pricing remains subdued due to persistent dumping from China.

The current evolving China anti-involution strategic stance is expected to drive margin improvements in these products over the medium-term time period. The polymer segment had a mixed business environment.

PDCB demand saw an uptick driven by PPS growth in the EV segment, while the PDA product chains continued to face volume and pricing pressure due to large dependency on the US market. Given the recent India-US trade deal announcements, we anticipate these volumes to improve.

We have also started debottlenecking efforts to increase DCB capacity from 120 to 140 KTPA to capture the incremental growth opportunities in this segment. In benzene- and toluene-based chemistries, we continue to remain the go-to integrated player.

Importantly, the customer conversations have evolved from being a product-specific to now chemistry-led, R&D-focused, and value-driven discussions. We have mastered multiple new chemistries and continue to expand our portfolio with selective high-performance chemistries, while actively engaging customers on sort of integration-led solutions.

Our future growth strategy is now decisively anchored in the advanced material space. We are pivoting from bulk products towards high-value, application-led solutions by leveraging our R&D and specialized capacities, and we'll capture upcoming opportunities through strategic partnership, ensuring higher margins and deeper integration with global technology leaders.

On operations excellence and AI deployment, our cost efficiency programs are now nearing completion, having established a lean operational baseline. To further drive efficiency, we have initiated the deployment of AI and digital transformation tools across our manufacturing plants.

By leveraging advanced analytics for real-time process control, predictive maintenance, and production optimization, we aim to achieve measurable gains in plant uptime and reduction in energy consumption. The organizational shift towards data-driven decision-making and AI-led innovation is expected to structurally enhance our productivity, ensuring we maintain a sharp cost-competitive edge globally.

On upcoming projects, Zone 4 remains a transformational growth platform for the company. During the current calendar year, we expect the upcoming MPP, chlorotoluene, and downstream process blocks to be commissioned in a phased manner.

Notably, we are commissioning all of these projects using our in-house indigenous technology, which is a testament to our internal process and engineering prowess. These flexible assets would allow us to commercialize new products in a rapid manner and offer flexibility to make profitability-driven decisions on the product selection.

Driven by some of the fast-track expansion initiatives for MMA, DCB, and addition of PEDA capacity amongst few other new initiatives taken up in the year, the capex for the year is estimated to be about ₹1,100 crores, a tad more than our earlier guided capex of about ₹1,000 crores. It may be noted that these incremental capex are expected to drive higher ROCEs, and hence, given the market dynamics, the company decided to step up the investment in this project initiatives with significantly attractive payback periods.

Let us assure you that we continue to maintain our capex discipline and are taking all the right steps to improve the capex return profile as guided earlier. With Zone 4 getting commercialized in calendar year '26 and that there are no other large projects in the pipeline, we anticipate the capex for FY27 to be significantly lower.

The joint venture with Seppic is progressing well with commissioning expected in Q1 FY27, focused on paints and coatings application, which aligns well with our strategy of moving closer to customer and diversifying application layer. Speaking about the JV with REL, the construction work for setting up the first manufacturing unit have commenced in the previous quarter.

The project is progressing well as planned, and we anticipate the JV to be ready for commissioning in the first half of FY27. To conclude, despite a challenging external environment, AIL is well-positioned for sustainable growth.

Our focus on portfolio quality, value chain integration, and disciplined capital allocation, underpinned by our in-house R&D, provides a very resilient foundation. This is further bolstered by structural headwinds from the recently concluded India-US trade deal, India-EU FTA, and the strategic stance of Chinese anti-involution, combined with our internal digital and AI-driven productivity gains.

Together, all of these factors reinforce our confidence in AIL's trajectory as an innovation-led global chemicals leader. We remain confident in our long-term strategy and thank our employees, partners, and shareholders for their continued trust and support.

Thank you, and we'll now be happy to take your questions.

Oh yeah, hi team. Thank you for the opportunity.

My question is that out of the key products that we sell in US, the highest contribution is from MMA. You had already resumed sales of MMA in Q3 to US, and in fact, you did record volumes there in Q3.

Was there any tariff applied to MMA? That is my first question.

Yes, MMA had a full tariff applicability in the last quarter.

Was it not part of the Annexure 2? Because maybe I checked it wrong, I think I got it in the Annexure 2 list.

It was published in November.

It is not part of Annexure 2. It had full tariff applicability.

All right. Okay.

Second thing is on the PDCB bit. Is it a significant part of your revenues from US, or is it...

No,

PDCB is one of our major and our long-standing product to US. I think it's the second largest product after MMA, of course.

As part of our total exports to US, PDCB, depending on the quarters, can vary, but does account for anywhere between 15% to 20% of our total exports to US.

15% to 20% of the total exports to US would be PDCB. MMA would be how much?

I think roughly from a contribution point of view, if you look at it, MMA would constitute somewhere in the range of 50% to 60%. PDCB would vary between 15% to 20%, 15% to 25%, and remaining is MEA.

All right. Sure.

I think that's all from my side. Thank you so much.

Hi, sir. Thank you so much for the opportunity, and congratulations on a very strong set of numbers.

Sir, on the point of the China anti-involution that you highlighted, could you just touch upon what you've been hearing on the ground with respect to which capacities are being targeted and which would benefit Aarti?

I think the stated intent, which is available to everyone, is to curb deflationary export pricing and the overcapacity situation in China, right, which I think is applicable broadly throughout the chemical sector. In terms of specific actions, we have started to see some getting implemented in recent times.

I think one of the specific action that they took was to remove the VAT subsidy on many of the chemical value chain products. That impact of that on the pricing in the global market was immediately visible.

For example, as part of AIL portfolio, the NCB chain products, including PNCB, ONCB, and some of the downstream products, the VAT rebate on exports from China was removed, which led to sort of immediate change in pricing environment in the Indian and the global market. Now, this is just the sort of series of actions that we are anticipating in future, right?

The story that we are hearing is it's a continuous process, not a one-time action, and in that context, we remain hopeful that the deflationary export pricing that we have seen over the course of last 2, 2.5 years should fundamentally get corrected. How it impacts individual products and individual value chains, we will have to, of course, monitor and observe over the course of next few months and quarters.

Sure, sir. That's very clear.

Just a second very quick question was, I think you are once again debottlenecking your MMA capacity to 360. Just wanted to understand what is the medium-term strategy, because it's already a fairly sizeable part of the portfolio.

I do understand that you are finding new markets and new customers, but just some thought process with respect to are you comfortable with this becoming an even more significant part of the portfolio, or it's just a case of there being demand and you being able to capture it at a fairly low cost? Just some thought process over there would be very helpful.

Thank you.

I think if you look at the long-term strategy, Vivek, that has not changed. I think we discussed this in the last conference call.

We feel MMA will ultimately settle anywhere between 30% to 40% of our portfolio, right, if you take a two-, three-year outlook. I think we continue to maintain that strategic stance.

At the same time, given the nature of the product, we need to have capacities to play when the swing demand comes into the play. In that context, and this is a debottlenecking capex, done very, very efficiently.

From a overall product portfolio point of view, you will see one or two quarters where the numbers keep going up and down, especially also depending on the other product link bulk shipments. The number sometimes sees very differently.

On a steady-state basis and on a medium-term basis, as the Zone 4 also gets commissioned, we feel MMA will settle somewhere between 30% to 40% of our portfolio, which is sustainable. Also the kind of diversification now we have done with respect to clients as well as geography, and more importantly, now going forward, even in terms of the application, right, and sort of different solutions that we will deploy, which will ultimately increase consumption of this type of products, we feel pretty diversified and comfortable in terms of maintaining that range.

Sure, sir. That's clear.

I'll rejoin the queue, and all the very best.

Good morning. Thank you for the opportunity.

Sir, again, question is on MMA, because it is full tariffed. Now that with the recent announcement, should we expect some kind of margin uptick on this?

Because I think we earlier said that the tariff was shared between us and the customer to a certain extent. What kind of impact we can see on the pricing as well as margins on the MMA portfolio?

Second, if it would help us if we can understand what part of your overall US exposures is coming under the full tariff and non-tariff bucket. That quantification would also be very helpful for us to understand the margin upside potential.

I think the answer to the first part of your question is yes, I think it should help. While we have agreed for certain volumes and commercial arrangements with existing set of customers, as we go to the next set of negotiations, this tariff reduction will play a role, right?

We will continue to honor all of our existing contracts, but as we get into the conversations for the next wave of contracts, this tariff numbers will definitely play a role. In general, directionally, it should lead to better realization compared to what we have seen in the past.

This one. Second, in terms of tariffs, just to be very clear, we have four large products that we export to US, right, MMA, PDCB, MEA, and NCB, out of which the only product which was sort of kind of exempted was MEA, right.

Rest all three products had full tariffs. Now, each product and each customer had a different level of settlement in terms of who shared what percentage of tariffs and where we were able to claim back the tariffs based on the re-export potential from US.

It is difficult to comment on every product and every customer in terms of exact tariff impact. Generally, as a trend, given the reduction at an overall level is going to be quite significant from 50%+ to now 18%+, there will be a margin that will accrue to all players in the value chain.

Understood. Finally, and generally we have been shying off putting up a very large capacity on MMA because obviously it's a function of volatility between the gasoline-naphtha spreads and it has stopped us from investing heavily [yet and grow?]

. This is my understanding, correct me if I'm wrong.

Do we also have a case to being absolute leader in this space, maybe a swing capacity, swing supplier where by the virtue of having the largest capacities, have we looked at the MMA from this angle to be the ultimate supplier at a global level? Would it help us in having a stable margins in this product?

Yeah. I think if you frankly look at it from a market standpoint, right, not from a capacity standpoint, I think from a volume sold in the market, we can confidently say that we are the global leader, right, and we intend to remain a global leader as far as this product is concerned.

Our investments and our strategy has been a bit sort of understated to ensure that we make this business more consistent in terms of its performance. For that, all the strategies that we have taken in terms of diversification of customers and geography was the focus.

Going forward, in addition to that, I think we will also focus on how do we build better integration, right, in the entire chain to make the margins more stable. I think that will be the focus over the course of next one to two years before we take a significant jump in terms of capacity.

Okay. Actually, what I was trying to understand is what today probably we will move towards 350 KT+ capacity in MMA.

What kind of capacity you think will absolutely cement our place in this product? Is it close to 1 million tons or 2 million tons?

A ballpark number, what should be our expectation in terms of our capacity in MMA in a I would say medium to long-term perspective?

I would hesitate to give a number specifically. As I said, the potential is immense, right?

We compare this with MTBE and where it's in millions of tons, right, in terms of market that we are trying to target. I think we have to be also mindful in terms of how we're going to structure the business, given the value chain operates very differently, right.

At this point in time, we are steadily building up this business. We remain very confident in terms of potential of this business, but we want to do it in a way where it's more sustainable and sort of stable in terms of margin profiles.

Sure. Second question is on the Europe FTA.

While obviously we will have access to a larger Europe market without any tariffs, what is the risk associated with the imports into India from your European competitors into India? Would it negate some of the benefits from this FTA?

How should we think in this deal? Look,

at an overall level, we feel it's positive because I think though our direct exposure is limited, our indirect exposure through our customer would be decent. Plus, it will create a lot of partnership opportunities with companies who ultimately want to serve European market, because now you have a stable partnership from India to EU.

Building out assets in India to supply to EU from a long-term basis will get facilitated, right. In that context, I think the FTA from a mid to long-term point of view is hugely positive.

In terms of competing volume coming from Europe to India, I think it will happen in one or two chains, but we don't see a significant negative. Look, I think if we are competing against Chinese players trying to dump volumes in India, I'm sure we can handle European volumes.

Right, right. Finally, on the Chinese, you spoke about anti-involution, especially on the VAT subsidy.

What kind of impact we are talking about? Because if you go by product by product, the unit economics after removing this subsidy removal, is it very adverse?

What kind of ballpark we are talking about in terms of pricing upside one can expect?

Look, I think it will change. The only impact where it was immediately visible for us was in NCB chain, right, where pricing went up within a span of few days by almost 7%, 10%.

I think this is a combination of multiple things. We can't link the entire impact only to their stance of VAT removal.

The fact is 13% VAT removal is a significant move, right. It's not a small move.

What we have to see is to which all products it becomes applied going forward, and how many different initiatives they take to implement this overall anti-involution strategy, right. I think in upstream we are seeing interesting moves in terms of petrochemical capacity consolidations.

We are seeing phasing out of some of the older crackers. As we go more downstream, more specialty, what kind of initiatives are taken by the Chinese government to facilitate this anti-involution would be worthwhile to observe.

What we can see is that the intent is visible with few actions already getting implemented on the ground, and we have also started to see real impact in some of our products.

Right, right. Shouldn't we also be doing NCB debottlenecking along with the DCB then if we are seeing some kind of a benefit in the NCB chain?

It is currently under active consideration. Far, not yet approved, but it is under active consideration.

Thanks, Suyog. Thanks for answering all the questions, and all the best.

Thanks for taking my question, sir. Congratulations on a pretty solid set of numbers.

Suyog, on the Chinese bit that you...

Just give me 1 second. Give me 1 second.

Is this better?

Hello, is this better?

I was saying on the Chinese anti-involution bit that you've been talking about, is there a way to characterize what proportion of our portfolio over the years has been probably subject to what you call, maybe, aggressive pricing, where some sort of relief potentially can come in over a period of time?

Look, they are the largest player in the chemical sector. Globally, more than 60%, 65% of chemical industry today is China, right?

It is very difficult to find areas where they don't compete, to be honest. In general, I think the more important thing to track is in which areas of the chemical industry and in which value chains they take actions which will lead to a different behavior from players.

I think because that we can potentially correlate in terms of impact on Indian companies. That's how we will track it.

If you look at China's impact on India, I can broadly say that the entire chemical sector practically is impacted.

It's been a meaningful negative pull for our business also over the last two, three years in terms of after COVID that...

They are the largest and the most significant player in the global chemical industry, specially for players which have significant export exposure, where inevitably you end up competing directly with them head-on without any protection. They have been a big determinant of profitability levels in the industry.

Right. Secondly, on our unit Zone 4 capex scale-up, if you can give us some color on how do you see this phasing out, what kind of investments have we done in the project and when do you see optimal utilization here?

In terms of capex, the majority of the capex will be done this year. Only small part of it will sort of spill over for the next year.

We are coming towards the end of the capex cycle in that context. That's what will also be reflect in the next year's capex number, which we expect to be significantly lower than the current year.

In terms of ramp-up, I think we mentioned last time the calcium chloride and the multipurpose plant are expected to be commissioned within this quarter. The remaining process blocks will get commissioned throughout this calendar year as we go towards the first three quarters of the next financial year.

The utilization levels will gradually ramp up. Some of the units will ramp up pretty quickly like calcium chloride and potentially also MPP, but the remaining process blocks where we are doing specialty product which have to go through qualification cycles with the customers, there we will see a meaningful ramp-up in utilization over the course of two-year timeframe.

What would be the total capex on Zone 4 by the time we end this year?

The total capex on Zone 4 would be in the range of ₹1,600 to ₹1,800 crores. Bulk of that would be deployed by the end of this year.

I think hardly, sort of ₹300 to ₹400 crores would be left for the next year, but otherwise, rest of the capex will be fully deployed by the end of this year.

What kind of asset turns do you think we can do on this investment at peak?

Look, we've mentioned this last time, right? We don't prefer to give asset turn numbers because our revenues are linked to ultimately crude and BTX pricing.

From a EBITDA point of view, we have shown what is it that we are expecting from a sort of capex-led growth to be accrued to the P&L by FY28 timeframe. We still maintain that number.

Right. The last one, if you can give us some color on we've done a few JVs over the last couple of years, with various partners.

What kind of other incremental partnering conversations you are beginning to have with various players in India and abroad?

I think there are multiple conversations ongoing, and in lot of cases, the decision-making was stuck because of uncertainty around the global sort of trade realignments and potential geopolitical events. I think with the events of the last four to six weeks, we expect many of these conversations now to close, right?

I think that's the intent of the management team that we would really like to now narrow down and close some of these growth partnerships to ensure we have a long-term funnel getting filled in from a growth point of view.

Okay. Thank you so much.

Best of luck.

Good afternoon, sir. Thank you for the opportunity.

Sir, considering the utilization for all the plants, PDA seems to be having the lower utilization. What's your outlook on that front, sir?

Sorry, you were not very audible. If you can repeat the question, it would be super helpful.

Am I audible now, sir?

Yes. Sir, comparing to all your plants' utilization, PDA utilization seems to be less.

I just wanted to know your outlook going forward on the utilization front.

I think as we mentioned in our commentary, it was one of the value chain which was mostly impacted due to US tariffs because two largest customers actually consume this product in US. With the settlement of the US-India trade deal now, we expect utilizations to improve.

As sort of the detailing comes out, the conversations with customers will already get initiated in a span of few days. Structurally speaking, we should see better utilization of this value chain going forward.

Now, sir. Sir, your 14%, 15% EBITDA margin range, is it sustainable considering the MMA cycle after the Zone 4 coming into play?

Do you think that this is the sustainable margin from here only the margin will start improving going forward?

I think it is fair to say that for the non-energy different applications, the margin profile ideally should improve going forward with all the three macro factors that we talked about at the start of the call. I think it would be a safe assumption to make.

Now, sir. Sir, post this EU FTA, do you see any big supply contract for any bigger size molecular we being the intermediate provider in the two years?

I think we remain in conversations with multiple players, and as and when this conversation reach to a certain level of certainty, I think we'll be happy to come back and inform. At this point in time, the only thing we can say is that there is interest from global players for long-term strategic partnership projects, and the settlement of lot of pending points around US-India trade deal and India-EU FTA will help us close some of these conversations in near future.

Now, sir. Just my last question, a bookkeeping one, sir.

What would be our operating cash flow for 9 months, sir?

The operating cash flow for nine-month, the EBITDA was around 830... would be in the range of around 500 to 600 odd crores roughly.

Now, sir. Sir, any guidance on the FY27 or we'll stick with that FY28 one?

No, we'll stick with the guidance that we have given for the mid-term. I think right now we remain very focused on executing all the actions that we have outlined and sort of continue towards that trajectory.

Now, sir. That was really helpful.

Thank you.

Hi, am I audible?

Sorry. Thank you for the opportunity.

To a previous participant's question, you mentioned that there are a few conversations that you will be able to close now, given that we have some clarity on the US tariff. Could you provide some more details on this with respect to the funnel, the pipeline, how big is this pipeline?

Will this help us with filling up our Zone 4 capacity, something on those lines?

Look, at any given point in time, there are multiple conversations. For example, one recent I think announcement you would have seen as part of our presentation that with Actylis, we announced exclusive distribution arrangement for PCBTF.

Now, it's a very specific molecule mostly targeted towards coatings sector and US market, but that agreement got concluded, right, with Actylis being an exclusive partner. I think many such conversations have been happening over the course of last 12 to 18 months, but in many cases, the final decision-making was getting hampered for the lack of clarity.

Now with this clarity, we expect that the negotiations to proceed at a much faster pace, and in due course, whenever things get concluded, we will talk more about it.

Got it. Okay.

That's all. Thank you.

Hi. Thank you for this opportunity.

Am I audible?

Okay.

Sure. Sir, congratulations for the great set of numbers, sir.

My first question is on the MMA. In fact, it looked like that in the very limited period of one year only, you have almost tripled the capacity.

In terms of the capex that you would have done, that would be also not much, considering the kind of annualized run rate of more than ₹2,500 crore kind of business that you are generating out of it. Is it fair to believe that the ROIC what we generate in MMA is much superior compared to the company-level ROIC?

We won't comment on a product-specific capex or return profiles. I think what we can tell you is that the overall strategy of building a integrated portfolio at our site in Jhagadia, where we did lot of upfront capex in terms of infrastructure, in terms of ability to produce large-volume products, and the storage infrastructure that we have built, supply chain infrastructure that we have built globally, which sometimes is not visible, it does come in the overall capex, but many times is not visible at a product level, but it starts yielding operating leverages as we scale up volume, right.

It does appear that in a relatively short span of time, we are able to increase the capacity dramatically and increase the volume. We have to admit that lot of the groundwork required in terms of infrastructure, which is beyond core ISBL investment, was done over a course of several years.

Sure. Second, we see even in case of MMA, it looks like that the customer diversification is one of the key development over the last few months that we have seen.

Given that, we would be having a large customer base, but I think ultimately the growth trajectories in MMA and how sustainable this would be, because this is in terms of the octane-boosting application, the industry is still in the evolution stage. Given that, what trajectory that one can think, sir?

Although you have guided for capacity expansion though for the short period.

Yeah. No, I think as I said, I think our strategy over the course of last 12 months was more focused on getting to a respectable level of globally leading capacity.

At the same time, diversifying both geography and customers. I think going forward, we are sort of a little bit change in the strategic stance in terms of we will continue to diversify and increase the customer base, especially we are targeting Europe this time around.

I think last year it was more around sort of Middle East, Africa, and US. I think Europe is still sort of kind of untouched, not scaled up in terms of consumption.

We'll scale up that as a market. On top of that, now the focus will shift around value chain integration, right, both in terms of developing solutions with complimentary products, with different blends, so that we have wider sort of solution offering to our customers.

At the same time, we have to also look at what we can do to manage the raw material exposure. I think that's what will be the focus for the next one to two years from a making this business more stable on a margin profile.

Okay. Sir, my second question is about this China tariff differential.

Now India is 18%, China is around 34%. Given that, what advantage that we can have for which all businesses, and what is the sustainability if you have any sense on this differential?

Yeah. If you compare only against China, then PDA is the one chain where there was a sort of straight head-on competition, where we should be able to recover volumes, where we should see impact immediately in the next few months kind of a timeframe.

On the other major products like DCB, MEA, and MMA, I think the affordability of the customer goes up, right? In terms of stability and increase in volumes, that will definitely support.

In many cases, the competition does not necessarily come at the product level itself. It come at a different stages of the value chain.

For example, in MEA downstream, though we may not have any competition in MEA, but in MEA downstream, there might be a huge competition in terms of trade flow from China to US. I think you will see impact for each of the product at a different scale and at a different timeframe, because exactly where in the value chain China dominates varies from product to product.

By and large, I think this differential of 34% versus 18% that you talked about should help us now get better volumes and margins going forward.

Okay. Just last one question from my side.

You couple of times that you have mentioned now or emphasized about the internal technology or indigenous technology and processes and all that, and that is possibly in the context of the Zone 4 kind of capability that you are building up. How different this approach would be and how meaningful in terms of the value addition, value creation for your portfolio?

I think it is differentiated because it frankly allows us to be one of the lowest-cost producers in many of the molecules in which we operate, right. That, I think, is very critical.

I think despite all the macros, we can't forget the fact that China is a very significant player with a very large capacity, and we have to be ready for the competition if it comes to kind of a last man standing game, right, in some of these products. Having indigenous technology developed by our own in-house R&D, where we can optimize the cost sheets for each of these products, gives us that ability and license.

One of the reason why we have been able to increase volumes and, I would say, maintain our market share over the course of last 2 years, despite a significant pricing pressure from China, was because of the fact that many of these technologies are developed by us and we have ability to optimize the cost, right, where we can stand in a very good standing when it comes to global cost curves on many of these products.

Sure, sir. Thank you, and wish you all the best.

Thanks for the opportunity, and congrats on strong set of numbers. First question is on Zone 4.

In terms of our domestic and export mix, how does that stack for Zone 4? On the exports front, which and all are the key markets that we would be targeting?

Thank you.

As I said, Zone 4, giving any number would not be doing justice to it, given how the entire zone is now constructed, right? We have, as we mentioned in the earlier call, we have tried to build different chemistry process blocks in the Zone 4, and we will optimize the product portfolio subject to demand and the margin potential of each of these products.

Depending on which product we end up selecting to manufacture, this domestic and export will broadly vary quite significantly, right? It would be unfair for me to give you percentage, but it is safe to assume that it will not be tilted towards one very significantly.

I think it will be a relatively balanced mix of domestic and exports is the current central.

Sure. The second question in terms of the capex.

Given that a part of capex has been preponed to this year, next year, probably we were contemplating this capex will come. To that extent, FY27 capex will be lower than what we had anticipated earlier, barring the other comment that you made that you may go ahead with some expansions depending on the board approval?

Yeah. I think a slight increase from ₹1,000 to ₹1,100 crore is not because of preponement of Zone 4.

It's because of incrementally approved project around MMA capacity expansions, PEDA project that we announced, and the DCB debottlenecking project. It is not that the Zone 4 capex has been preponed.

The Zone 4 share of the capex from the next year will remain at somewhat similar level. Still, given bulk part of it is getting done this year, I think the next year capex number would be significantly lower.

Sure. That's all from my side.

Thanks a lot, and all the best.

Thank you.

Good afternoon. Thank you so much.

Just a follow-up on the MMA question that was asked with regard to the tariffs. Actually, this tariff differential for us now from India versus China on MMA, do you see that as a significant advantage in helping us gain more market share in the US?

I think it would,

from a long-term point of view, Abhijit, it will definitely help. To be very frank, I think it's not like we were competing with China in the US market, right?

I think it was more driven by affordability of the end customers for this particular product to ensure that the blending economics works out. That will get unlocked, right, with respect to tariff reduction, because the final cost of consumption for the customer will become more optimized.

We remain optimistic that it will help us improve both volumes and margins. Yes, from a mid to long-term point of view, given there are some Chinese manufacturers for this product, that does create a differentiating advantage also for us.

Suyog, you also spoke about integrating MMA to sort of make it more stable over the next couple of years, including maybe sorting out the feedstock dependence. Would there be plans to maybe backward integrate into this product or what exactly is the strategy or kind of envisaging here?

Lot of initiatives currently under considerations. Not in a position to comment exactly, but involves both backward as well as forward.

We are looking at several initiatives where we can play a more part of the chain and not only the part of the chain where we are playing currently.

Got it. Just one final one from me.

After a very good quarter here in terms of EBITDA recovery run rate on quarterly basis, do you believe that you've now sort of stepped up to a higher sustainable run rate on a quarter-on-quarter basis looking ahead over the next 12 months or so?

Look, I would say that as a management team, frankly, we remain focused on our mid-term target, right? I think there are a lot of initiatives that we have taken on our plate to execute to reach that target, and I think we remain committed to that journey.

There are bumps here and there, but I think by and large, if we are able to implement all of it, and if there is no major external event, then we remain committed to sort of achieve our mid-term targets.

Thank you so much, and wish you all the best.

Thank you.

Hi, sir. Good afternoon.

Sir, couple of questions from my side. Sir, firstly on the MMA contract that you said, the existing contracts are in place.

When are they due for renewal?

It will change from customer to customer. Difficult for me to comment, but in some cases they are quarterly, in some cases they are spot, in some cases they are 6 months.

I think it's difficult for me to answer it on a customer-specific basis.

Got it, sir. Sir, secondly on the JV that is going online in 1Q FY27, I believe both parties are investing ₹150 crore each.

What would be the revenue potential, and if you could just flag off some color on the product as in how is the competition over there, who are the other suppliers? That would be helpful.

Thank you.

The revenue potential as we declared when the JV was announced was in the range of around ₹300 to ₹400 crores or so. The end-use application was agrochemical and paints and other stuff.

Ultimately what we will do is we will supply raw material to that JV, and the JV's finished products will get converted into a one more final product and will ultimately get placed into the market. The dominant application is actually paints and coatings, and small part of it does go to agro as well.

It will be mostly India-centric product and basically will lead to import substitution of that particular product, which is right now being supplied mostly by China and to some extent also by Europe.

Thank you, sir. That'd be all.

Thank you.

Thank you, sir, for the opportunity. Sir, I joined the call a bit late, pardon if I'm asking the same question.

Sir, on the agrochemical side, we have witnessed that on quarter-on-quarter basis and YoY basis, there is a dip in our top line. As you'd already mentioned, the pricing pressure still persist.

It has been now for quite a while now. When you expect this uptick to take place, and as a overall mix, currently we are standing at 12% of overall top line in agro on a quarterly basis, where do we see if this pricing pressure moves away, can we still go back to that original rate of 20% of overall top line, or MMA only would contribute a larger chunk?

No, we actually think agrochemicals will go up. Also, if you look at only one-quarter number, it might be misleading because some of the large active intermediate that we ship to US, the timing of the bulk shipment sometimes create quarter-on-quarter discrepancy.

I would strongly advise to look at sort of 9-month number or a full-year number to really get a sense of where the application is. It remains at a 17%, 18% odd level, and it has all the potential sort of possibility to reach the number that you are targeting around 20% odd percentage, specially as the Zone 4 also gets commissioned.

It will even potentially cross that number. Volumes have been pretty stable, margins have been under pressure.

With the latest stance and some of the changes happening in the global market, we are hoping that part of margin recovery can also be sort of visible over the course of next few months and quarters.

Got it. Sir, onto the dichlorobenzene, we are witnessing since last few quarters that volumes are growing up compared to NCB wherein volumes look flatish only.

In DCB, is there some new customer addition or any new product which we have started which is supporting the volume momentum? What is that so which is supporting it?

I think the significant downstream usage of PDCB happens to manufacture PPS, which is one of the high-end advanced polymer. That polymer consumption in electric vehicle has increased quite dramatically, and that's what is driving the demand growth.

That's also one of the reason where we have taken a call to increase capacity from 120 to 140 KTPA.

Sir, you mentioned which compound, PS?

PPS.

PPS is a polymer that is manufactured using PDCB as a monomer here.

Got it, sir. Sir, just one last question.

Sir, when we look at the anti-knocking agents, if we exclude the MMA, any other anti-knocking agents like MTBE or ferrocene, which is performing well similar to MMA, and how you see the distinguishion if someone is using any other anti-knocking agents, what are the benefits compared to MMA, and is there any replacement to this sort of anti-knocking agents?

See, to be fair, I think I would not comment on the other product portfolio in which we are not present. I think what we are very confident of is the value proposition offered by our product is definitely superior.

That's one of the reason why we have been able to push volumes and gain market share. We continue to remain focused on developing products which are new, but will offer better value proposition compared to some of the current product slate, right.

That's the overall strategy for the energy as a segment.

Got it, sir. Thank you.

That's it from my end.

Hi. Thanks for the opportunity.

My first question is on the first dedicated...

yeah? Hi.

Thanks for taking my question. My first question is on the capex that we did for our first dedicated contract, which then got terminated.

The utilization levels are a bit low, and we were seeing a bit of a ramp-up last year, and then tariff happened. With the change in tariff, how do we see the ramp-up of that particular capacity?

Thank you.

I think overall, given the end product is sold in US by some of our existing customers in India, we expect their volumes to go up, and in that context, the utilization level of that asset should improve. We had seen some early indication before the tariff got announced last year.

We'll observe for the next few months, but yes, I think with some lag, we expect the utilization level of that asset can be pushed further with now tariff settling at much lower levels.

Thank you, Suyog.

Hi. Thanks.

Thank you for your time today and for your ongoing support. While the sector has been undergoing through a difficult cycle and the macros, I think we are seeing some changes in the global macros.

Our robust strategy helps us navigate this phase to deliver consistent growth. We hope this session was informative.

Please feel free to reach out if you have any further questions. Thank you once again.