Thank you. Welcome, ladies and gentlemen, to this quarterly earnings call.

We know your time is precious, we'll get right into it. Joining me is Nirmal Momaya, Managing Director, and Santosh Parab, CFO.

Santosh will first give you highlights and numbers of the quarter, after which both of them will answer your questions. Thank you for being here.

Santosh?

Thank you, Ashish. Good evening, everybody.

I'll directly jump into the business. Yes, this quarter has been a bit tepid.

We had a turnover of 572 crores, where it was almost equal to what we did in the Q2, but there is a 6% hike as when we compare it to the last corresponding quarter. We had been telling you that we'll be doing high amount of vanillin sale.

We had done almost 700-odd tons in the last year, which, looking at the entire tariff scenario and other things, we had control our sale because we feel there is more than likely to have higher realizations because of the tariff. As we have been selling at an average price of $12.50, especially in US, because of the tariff situation.

In this quarter, we did 490 crores of sales to the third party. However, in the internal channels that is with subsidiaries in India as well as in the financing distributors, we have around 500 650 tons out of which around 500 is committed sale at $12.50.

The recent reduction of tariff to 25%, we can have a benefit of that on the 400 crore ton stock which we have, some part of it will fall in the quarter 1, the quarter 4, and then major portion will fall in quarter 1. From quarter 1, the real benefit of this will be appearing.

Vanillin, we did 490, which is around tons, which is around 55 crores, with a realization price of $12.50. As far as straights, the main ingredient business is there, it has seen a fall in it.

It has come down to 80 crores from 87 primarily for two reasons. One, the prices have been going down, and that's what is impacting our margins.

As there are local manufacturers who have come, and there's intense competition in India itself. Plus, this business has a very plateaued growth, and hence, there is an intense competition.

We had a bit of lower volumes also, but the major portion was because dip in the realizations on straights. As far as blends is concerned, we have been saying blends has been the hallmark of our business, and we have grown by around 11% corresponding quarter and almost 13% this quarter.

We clocked around 271 crores in this quarter. Of course, this also was pushed by our recent acquisition which happened in December 1, the French company, Vinpa, a listed company, which contributed almost near to 13 crores in this quarter, and that has also helped to grow the business.

Blends remains on track. It is going to grow at a very high growth rate of what we have been saying.

As far as performance is concerned, as we have been saying that this is what diphenol other than aroma and the straights, these are other chemicals where there were always lower margins, and it remains plateaued. In toto, the revenue was 457 crores.

Coming to the cost structure, you'll see employee cost. We have been saying employee cost has been increasing because we are bracing for this future.

We have been acquiring new geographies and companies all over the world, and this requires people on the ground all across who are experts to help us sales. There a lot of investment in employee cost, which has been happening over last few quarters.

Now almost we will be adding few people, but not more. You can see the employee cost has been quite stable.

The only increase is because of the acquisition which we did in Vinpa. The salary also increased one month's in fact and generally in the American and Latin American market there, it's like Diwali and Christmas, there is some kind of statutory bonuses also paid.

As far as other expenses are concerned, they remain under control, and we feel that they will remain in this range for the next quarter and will increase as the revenue grows. Coming to the EBITDA, yes, EBITDA expectation of high because we had said that we'll be doing a higher number on vanillin, which we have in a way controlled it to take the benefit of the tariff because if we would have sold now, in any case, realized only $12.50.

Delaying the sale into the subsequent quarters will help us to get $2 to $3 more per kg and which is plain cash and entire EBITDA. That was a plan to do.

You would have also learned that we had disclosed that there was a fire incident last week, last Saturday, at one of the blending unit in Brazil. It was a massive fire at one of the machine which was being commissioned.

The fire was of such extent that almost we have lost all the stock which was there, it was along with the warehouse this unit. However, we have another unit also which is working and is operational.

Obviously, we will keep on continuing operation. There was great traction, and it remains very interesting orders on various blends as well as biodiesel market, which is a market in Brazil.

We have trying to provide raw material from our nearest geographies and also from the local distributors. We want to keep the sale happening.

Obviously, because we are sort of buying on spot, a bit of margins will get impacted, but we're trying to keep the traction on sales, keep our customer service, honor all our orders. As far as today's condition is concerned, insurance survey is expected to start tomorrow.

At this moment, we feel that we are adequately insured. The surveys generally take 3 to 4 weeks.

There will be clarity on the surveys and other things. We are also using local tollers to also satisfy the manufacturing and servicing the customers.

At present, the unit is entirely closed. We don't think it will be immediately usable.

As the time passes, we'll see how to rebuild it, where to rebuild it, and other things. You would have also read in our result that our statutory board auditors have already filed for a petition for liquidation of Europe.

Naturally, the continuing business of blends will continue, though the entity will be closed because we'll be shifting that business to our other companies in Europe. We are not worried about the revenue of continuing business.

The good thing is that the cash burn which has been happening will certainly stop going forward. The plea with the court is scheduled on February 26.

We'll have more clarity. As per the requirement, we'll keep you updated on that.

You would have seen that there were some few exceptional items also in this quarter. As we acquired Vinpa, the acquisition-related cost, the due diligent cost and other thing had to be recognized, which was around 3.69 crores, which has been accounted.

Obviously, we had aligned our salaries much earlier, we were very near to 50%, and hence, you could see that even though we have around 800 employees in India, the impact is not high. Other aspect is that we have a very younger workforce, hence, there is past service less.

We have provided for all the required under the statute, what is to be provided already, which is 2.25 crores. We have also provided for an advance-cum-loan, which was a very old loan which we had given for some project, which unfortunately we don't think accounting provision is required, but we still will be trying to recover it.

Subject to that, the PAT has been impacted for this, and we have also shown the discontinued business, which is mainly on account of Europe. It's around 9 crores and some portion on China.

China is also on the verge of liquidation. We have filed the necessary documentations.

We expect that the liquidation process will move before the end of this financial year. Going forward, as we feel that vanillin is the business, and the good thing is that the duty has come down by 25%, and in near future, it will come down furthermore.

Blends has been doing. We have this inorganic acquisition of Vinpa, which will certainly help us to grow our business at Vinpa as well as those products we will be replicating and selling all over the world.

The blend business is going to keep on growing at the same pace as it was in the earlier period. Now we open the forum for questions.

Hello. Hi.

Am I audible?

Yeah. My first question is currently, I have vanillin realization at $12, right?

You mentioned that they may increase by $2 to $3. According to me, let's say your realization in US is $18 if your tariffs move down by 25%, then your realization should increase by $6.

Where is the disconnect in this?

The price in US is around $18, $19. That's correct.

That's right. Right.

What comes from India, 50% duty has to be paid. To match the realizable value because there is a local manufacturer, that's Solvay, who is selling at $18, who doesn't add the duty.

If we have to match the price of $18, we have to bear the duty. Hence, we used to transfer the material from here at $12, pay the 50%, $6 duty, which is cost to us, and sell in the open market at $18.

That's why the realization was $12. Now if the duty becomes 25, that additional duty which we are paying to the government will help us increase our realization.

In other words, we'll be selling at around $14, $14.50, pay the duty at 25%, which will match the local price of $18.

Okay. Understood.

What is the volume guidance for FY '27?

For FY '27, we have both methyl vanillin and ethyl vanillin, and our guidance for FY '27 is between the two the total would be 4,000 metric tons.

Okay. Understood.

Sir, I had one more question regarding Vinpa. What was the revenue for the full year for them?

I know we have consolidated from December onwards, but just to get an idea. 12 12 million one 12

around 13 crores was their monthly, which has been consolidated. Their turnover has been in the range of 12.5 12.5 crores on a monthly basis till December.

Okay. Understood.

Sir, our margins are down 2 4 5% this quarter. What do you think is our steady-state margin that we can expect after vanillin realizations going up and your volumes also increasing on vanillin side?

What are the kind of margins you expect, gross margin as well as EBITDA margins, from next year onwards?

Sorry, what is the margin?

Hello?

One sec.

Yeah. Okay.

The gross margin, as you said, were impacted by the straights business. As I said, the realizations have come down.

Almost the sale price of TBHQ, BHA, everything is down by around $1. The cost remains the same.

That has impacted us. The gross margin, which have come down because of the sale price decrease it was 46% in 9 months quarter 2, which has come down from 46%, it has come down to 45.8% in this quarter on operating revenues, and this is mainly because of impact of straights.

Also, the new acquisition of blend also will take time to settle, cost is there. EBITDA margin has got impacted also mainly because of straights.

We have sold lesser amount of volume in this year, which impacted the fixed cost on the vanillin business. That's why there is a reduction of around 55 basis point on the EBITDA margins as compared to quarter 2.

It was 7.3. It came to 6.7.

To answer your question on next year, FY '27, the gross margins should improve by at least a couple of percent with higher realization of vanillin as well as growth in the blends business, which is also depending on the product mix, there could be an improvement in margin. Our guidance is that we should improve the margin by 1% to 2%.

It will be in the range of 46%, 47%. EBITDA margins, based on the growth that we are projecting in vanillin and the blends business, should improve and go to between 12% to 14%.

Okay. Sir, we already are at 46% right now, and you are saying we'll be at 46% to 47%.

It should be higher than that, right, 48%, 49%, or something?

We are at 45 right now. We are at 45, we are saying we'll go to 47 also.

Okay. Okay.

Understood. Thanks a lot.

Sir, once again, EBITDA margins from 12%

to 14%? Correct.

Okay. Understood.

Thanks. Thanks a lot, sir.

Hi, sir. I just wanted to understand what is the duty right now in US?

It is at 25% or it is only 18%?

No, it is 25%. What is expected is once the trade deal is officially signed and announced, right now, only fact sheets and some other documents have been shared by both sides, but once it is finalized, it'll come down to 18%.

Today, whatever is being cleared from India in US, whether it is in bond or coming from the ship, the duty is 25%. The additional duty which was levied on 27th of August 2025 of 25% because of Russian oil, that has been knocked off.

The first increased to 25% on 1st of August 2025 still remains. That could come down after they sign the treaty deal between India and US.

Okay. Got it, sir.

Sir, the second question was that you were saying that we didn't do some sales this quarter of vanillin. What was the quantity of that?

We will say that we would have pushed and sold another 200 tons. We went slow

and

tried to push it in the next quarter so that we get the duty benefit. We would have made around another 200 tons at $12, $12.50.

Okay. Got it, sir.

The next quarter, vanillin sales should be in the range of what, sir?

In volume?

Yes, sir.

Yeah. What we are doing now is we are taking a campaign for ethyl vanillin.

Starting in the next week, we will start the production of ethyl vanillin, which we expect by March, we should be able to produce another 300 tons or so, and we've produced another 300 tons of methyl, we should be in the region of 600-plus tons.

Satish, to add to this, we have a channel stock of around 500 550 tons, and that 150 is at $12 because it's already committed. Another additional 200 tons is likely to be manufactured and sold.

You can just count that number.

Yeah. Okay.

Maybe around 700 tons kind of range, right, sir?

It should be between 600 and 700 because half the quarter has gone, the Q4.

Right. Got it, sir.

Got it. Thanks, sir.

Yeah. Thanks for the opportunity, sir.

First question is on the vanilla pricing. Sir, it looks like that both US as well as the Europe pricing currently look similar during the tariff period.

In the post-tariff scenario, if the US pricing is likely to see a rise, whether we should expect similarly in the Europe also?

No, not in Europe. Europe, the anti-dumping duty on Chinese material is 131%, whereas in the US, it's effectively with the tariff at about 265%.

There is a difference that delta will remain. The DDP prices today in US are $19,

$19.50

DDP, whereas in Europe, that is around $15, $15.50.

Okay.

That differential will remain.

Our realization would be slightly lower than the other party? Obviously.

Yes. Right.

In US, what is the price differential between the ethyl and methyl, sir?

Typically, the price difference is between $1.50 to $2.

Okay.

In the US, that's about $21 or so, DDP.

Sure. Second question is on the Vinpa and Vitafor integration and way forward if you can just talk about it because this is a year of acquisition, integrations and some strategic plans about it, people addition, all that.

Next year, going ahead, how should one really think about those two business and that's contribution to the overall blends? Yes.

Vitafor, as is in the animal feed side of the business. After acquisition, we've got several registrations now for several of our products in many countries.

The push on Vitafor is going to be in the coming year, in FY '27, is to scale up from where we are currently at roughly €12 million to €13 million top line to take it to about €17 million to €18 million top line in the next financial year. We're looking at at least a 40% to 50% growth there.

We've launched the product in the US market, in Mexico, and in the next quarter, we are launching it in the Brazilian market as well as we've launched the product in the Indian market. Wherever our own sales force is operating, we have launched these products.

We are increasing our reach to the other parts of the world through various distributors. Also, in some countries, we are yet in registration process.

All of that will kind of start opening out in FY '27.

Okay.

For Vinpa, now the next one was on Vinpa. Vinpa, which is doing about 10 about €11 million of top line, in FY '27, we look at again scaling that up by at least 40% to 50%.

We've got several businesses in different parts of the world where our products have been approved by customers. Here, of course, there's no registration, but we have the approval process with customers.

We're pushing hard to see if we can grow it even faster than that. We've launched the product in India.

We've launched the product in Mexico and Central America, in Brazil. Wherever again our sales channels are there, we've started introducing these products in.

Okay. Sure.

Sir, next question is about the base business, the antioxidant business in ingredients. That has been seeing a kind of continued competition enhanced either because of Indians or because of the Chinese.

The kind of a price pressure also, that is a separate thing along with the crude. Given that, is it fair to believe that, okay, this business is likely to see a kind of a single-digit kind of growth, a decline, or something like that?

If that is a continuing phenomenon, what is the utilization of the diphenol plant that you are anticipating for next year?

For diphenol plant for the next year, we calibrate the diphenol based on catechol. Really, it's not so much the HQ.

It's more the catechol because HQ, even if we don't do value addition, with the antioxidant business, there are some opportunities in performance chemicals that we can do. At this point of time, we're seeing the diphenol capacity we will run at similar as what we had in the current year.

There is enough outlay for us for HQ in the coming year because we have some contracts that we have signed also, which will give us some volumes for selling HQ and catechol. Of course, vanillin is the big outlet for us.

Okay. Just two clarification I wanted, sir, on this fire impact.

Whether we are likely to see any kind of impact in the coming quarter, although it is fully insured, that is one? Secondly, are we getting any out of the liquidation process, sir?

No. Sorry.

What was the first part? Your voice broke.

Okay. About any fire impact that we are likely to see in the upcoming quarter for Brazil, although it is fully insured?

Yeah. We will have to see how the insurance process goes.

Very difficult to predict right now whether there will be any impact and if so, what will be the impact. At this point of time, in fact, the access to the premises has not been allowed as yet by the fire department because they want to check the integrity of the structure, and they don't want any other mishaps to happen.

Very, very early days to say whether there will be an impact and if there will be an impact, what that would be.

No, it is not only the kind of a fire-related loss, business loss subsequently in the subsequent period?

In the business loss, not really. We have the blending unit, which was our original blending unit.

This was a unit 2, which was just commissioned right now for looking at the expanding numbers that we had. In fact, the incident happened with a brand-new equipment also because that site was just being started out.

In terms of manufacturing, there will not be so much of an impact for us if there's any shortfall because we have some new contracts that we are signing so for which if there is a shortfall in capacity, we have contract manufacturing tie-ups in place which we'll be able to service. Having said that, of course, since the raw material was destroyed, we have to arrange for raw material immediately for servicing the business that we have on hand.

That possibly can have some impact on margin in Brazil for the short term for the next 1 month or so till material which is on water will reach Brazil. Already there's a lot of material which has been shipped out in anticipation of all these contracts.

That should start hitting Brazil in the next 15 days. There would be some impact, but we are trying to buy material locally.

Of course, it'll be more expensive than what we would have supplied from India or from Mexico. Having said that, it's only temporary for 1 month or so there would be an impact.

Okay.

On the margin. Not on the top line.

Top line we'll maintain.

Okay. Any benefit that we are likely to see from the liquidation process, sir?

Liquidation of Europe?

European, yeah.

Yeah. No, the benefit is really the cash bleed that was there.

Every quarter that we were taking a hit, once it goes into official liquidation, which by end of this month, the tribunal or the court will have to decide. If that is the case, then, of course, the entity gets dissolved into a liquidation entity and, of course, no other impact then will come to us.

Any money realization out of the liquidation is not likely?

No, unlikely. Unlikely.

At this point of time, unlikely.

Sure, sir. Yeah.

Thank you, sir. Wish you all the best.

Thanks.

Hi. Good evening.

Thank you for taking my question. Am I audible to the management?

Yes.

Thank you. Just couple of questions.

What would be the margin profile at EBITDA level or gross level for Vinpa and the other acquisition?

Vinpa is really started less. It was a stressed asset we have bought.

Vinpa is just near break-even on EBITDA. The break-even should be at 15 crores.

They have done 13 crores. At present, they are just below the break-even margin.

As the business grows, they were not able to sell because they had no much access to the market, which we have given. It will generally go as the boss said, if it's a 50% growth, it will certainly start giving the margin.

At this point, it's almost EBITDA negative for a month. Vitafor is already broke even and has been making small 4 to 5% 10% to 12% EBITDA, and I think it will grow as we start increasing the business.

Understood. If you could just quantify the expense for Vinpa acquisition, I think you mentioned about 3 to 4 crores on employee expense.

On the other expense front, we've seen a sharp jump of about 10 to 15 crores on a year-on-year basis. You mentioned, I think, it is sustained.

Any reason for such a sharp jump was seen? Or is it only a one-time because of the acquisition?

No, to understand the Vinpa acquisition, it's better to compare it with last quarter. The increase in other expenses are predominantly because of Vinpa for a month.

Naturally, going forward, Vinpa had generally an operating cost of around 3.5 crores, 3.5 to 4 crores on a monthly basis. That will come.

That will be an increase in the next quarter. Similarly, there is around Vinpa's labor cost is also around 1 employee cost is around 1 1.5 to 2 crores per month.

That also will increase. As far as other expenses from other businesses are concerned, we don't think there will be an increase.

Obviously, there's a Brazil impact if it comes that there could be some expenditure on that. We don't think the other business are going to increase.

In the next quarter, obviously, my other expenses and employee cost will increase because the entire 3 months hit will come from Vinpa.

That would be proportionately with the sales as well, right? This quarter was only, I think, 30 days.

As

I said, it's a 30-day 12 crores. The run rate is already 12.5 crores when they were under stress.

Now we have come. We'll be certainly increasing the business.

Looking at this coming quarter, see it's a very short period, 3 months, you can observe, but everything is that we'll maintain that run rate for the balance year.

Understood. Sir, just another question on vanillin.

You have about 400 crores of stock, you mentioned?

400 metric not 400 crores.

No, 400 metric tons.

Yeah.

Last call, we were gauging that we would see some kind of channel inventory easing off. Are you seeing that happening?

Or are we still seeing a stuck channel?

It's With ADD

Sorry, what was your question?

I think last quarter when you had the conference call and the quarter before that as well, you were seeing build-up of inventory because of the ADD. You gauged that it would take a couple of quarters before you have a better insight as to how your demand scenario is going to pan out.

Consistently, you guys have also been scaled, which is extremely great in a tough time. Are you seeing a possibility for better tonnage going forward?

I know you've given a guidance of 4,000, but I want to understand, can we see European pricing move up to probably $14, $15?

The pricing will not move up. Pricing will remain in that region because the anti-dumping duty effectively makes a Chinese product come in at $15.

That's at DDP level. Which means at a net level, it's about $13.

We believe that the prices in Europe will not go up. It's only in the US where the tariff difference of 25%, our margin will improve.

In terms of channel stocks, they are being liquidated. That's the reason why we think that we'll be able to scale up our sales from around 2,500 tons this year, 2,300, 2,400 to about 4,000 in the next year.

Understood. If I can just squeeze in one last question.

Santosh-ji, could you just reexplain that provisional for 11 crores that we've taken for this quarter? No, the exceptional item?

Yes, I think that was 11 the PDD of 11, 11, 12 crores. Yeah.

The provision. Yeah.

There are three components: acquisition-related cost, labor cost, and we have also made a provision for a doubtful advance-cum-loan, which was given 5 to 6 years back. That was for anticipating a project.

The project didn't happen, and hence, now because 5 years have gone, this is an accounting adjustment. We will be taking other actions to recover that.

Understood. Thank you.

Sir. Thanks for the opportunity.

Sir, what was our vanillin tonnage in the first 9 months of FY '26?

First 9 months, Rohan?

Yes. 1,740 metric tons.

Okay. Sir, next year, we plan to do 4,000 tons, and even if we realize say $14 on an average, that is revenue of 500 crores.

In your comment on margins, there you said the gross margin should be at 46%, 47%. With vanillin scaling up and realizations improving, shouldn't it add more to our margins?

Or will the blends business face margin pressure, and that's why the margin improvement is likely to be lower?

The gross margin in the blends business typically is less than 45%, and we are going to grow the blends business by at least 20% to 25% next year. On a base of 1,000 crores, we are looking at at least 13 to 1,350 crores in the next year.

That's why we are saying overall margin will average out at this level.

Oh, okay. Your revenue growth should be much higher because vanillin will grow significantly and also the blends business.

Correct. That is the assumption, yeah.

Okay. Sir, on this 4,000 tons of guidance that you have for FY '27, have you committed offtake?

Or you are waiting for spot prices to maybe improve and get higher realizations? How are you looking at that offtake?

How confident are you of 4,000 tons?

In this environment, we have done 2,400. With large amount of channel stock lying pre-anti-dumping duty in anticipation there.

Our assessment is that the market will open up. We are not rushing in for any contracts because even customers are looking at quarterly contracts as opposed to longer ones because they don't know how long this channel stocks will remain.

I think our sense and our estimation comes from the fact that given all the adverse situations that were in FY '26 with channel stocks being emptied out to grow it by about 50%, 60% from where we were is very likely.

Understood. Yeah.

Thank you. Thanks for taking my question.

Sir, just wanted to clarify if right now the prices in the US is $19, and if we have a 25% tariff, we'll get a realization of $15. Is it right?

About $14.50 or so because there is also local freight and things. This is duty-paid DDP.

If the tariff goes to 18%, our realization would be

$15.50

or so, right?

Correct. Correct.

Correct.

Sir, and you said that the potential of price increase in Europe is lesser than US because US has much higher tariff, and it's not adjusted to that level, the dumping duty. Is it right that US is 19, and if you assume a 265%, it comes to $23-plus?

I'm just assuming $6.50 in China.

In China, $6.50 will come to $23. That is right.

Okay. There's still $4 upside in the price of vanillin if there's a pari passu the way the Europe is getting.

Okay. Sir, if the deal is signed today, then your realization will go up immediately, right?

Correct.

Okay. Then why are you saying that we'll be realizing less value for next year because there's a very high possibility of that being signed also, right?

Yes. Of course.

Till it is signed, it is not signed. We were waiting for this reduction from 50 to 25 for the last 6 months.

I can't predict that, no? We have to assume at 25% and work on that,

basically. Understood, sir.

On this stock, please I could not follow. Very apology for that.

You have 400 you have a guidance of 700 tons for Q4. Am I right?

Correct.

Of that 700 tons, how much will be at the $15 $14.50 and how much would be at the $12.50?

I would say the US will have out of 700 tons, about 350 to 400 tons will be in the US, which will be at higher realization, and in Europe is at the same realization.

Europe's same realization means $15,

$14.50? $12 No, $12.

$12.50, what we're getting today. Yeah.

Okay. Sir, is it right to assume the similar ratio would be there for FY '27 for entire 4,000 tons?

Yeah. It'll be 60% in the US and 40% in Europe.

Okay. Got it.

Sir, how much was the Brazilian value of the stock that you were carrying which got fire?

The stock value was about 20 24 crores. 16 million BRL, how much is that in rupees?

Okay, 16 million

BRL. Okay.

15 million 16 16 crores roughly, yeah.

16 crores. Okay.

Sir. What is our guidance on the new plant of the competition starting in the vanillin?

Can you give some color on that? I think the US plant was supposed to start for the vanillin.

Just wanted to know on that.

In Europe, actually, the European plant.

Yeah. Correct.

That, of course, that will start now soon. The total market, as we've said earlier, that between Europe and US is about 16,000 tons.

The two plants in US and Europe put together have a capacity of 10. There's a gap of 6,000 tons, which needs to be filled, which we expect that hopefully we should be able to fill at least 80% of that.

Got it,

sir. Before, yes, sorry to interject, I'll just correct the numbers because on the Brazilian loss by fire, a total loss at the book value is at 33 crores.

Out of that, 28 crores is inventory. He told 16 million, that is Brazilian reais.

The Indian rupee is 28 crores and around 4.5 crores of machine and equipments. It's totally 30 32.7 crores, right.

Got it, sir. If there's a delay in the insurance, then is it possible you'll write off next quarter and write back whenever you get that amount?

That's an accounting thing, how the insurance

company

look at it. We are confident, but you know how the insurance company, there are cuts and things.

If the insurance claim is finalized and there is no dispute, we may end up recognizing that shortfall in the next quarter. It's not at all determinable at this stage because the surveyors are not even entered that factory site.

Got it, sir. Sir, just I think you said about the channel stock, do you have any clarity because the US pricing will only go up to 23 once the channel stock is totally liquidated.

Any color on that side?

No, I think it is more driven by what our competitor in US does in terms of pricing. Since they are the leaders there and they define the price, we just follow.

In that sense, the price will be really defined by them. Currently, this is the price that they've defined.

As the channel stocks do come down, they will probably increase it by a dollar or so. I don't think they will take it to match it to the anti-dumping duty impact.

They'll keep it just below that.

Understand. Sir, last question on the China and the Europe cost, which were for the factories which are shut down, what was the run rate last quarter?

What will be the run rate, say, Q1 of next year?

In Q1 of next year, as I mentioned earlier, by end of this month, there will be a ruling on the liquidation. If it goes into liquidation, then there is no impact

cost

to us on our balance sheet on a running cost basis. Even China is the same.

By end of this quarter, that will also go into liquidation or winding up. Our estimate is next year we should not have any significant impact.

What was the impact for Q3?

Q3 was 8 crores on discontinued business of Europe and a crore rupees on a quarter of China. Both of this if the plea for liquidation is accepted, then pro rata will not have any cost from February on Europe because it is going to liquidation.

As far as China is business, there's a different process. We may have to bear 1 crore expenditure in the coming quarter and maybe another crore in the next quarter.

After Q2 Q3 of '27, your cost will become zero, which cost run rate is today

This year itself, in the next quarter. Europe, the hearing with the tribunal or the court is on February 26.

If the plea is accepted and given, then the bleed stops immediately because liquidation, when it goes to the liquidator, liquidator becomes the operator of the company. We are out.

If it doesn't happen, courts may take their own time a few months. It's Italy, it's very fast, but they may take a few months.

In that case, the control remains with us, and we may face that cash bleed of 7, 8 crores next quarter also on Europe. China has a 1 crore run rate of bleed because we had to keep some people there to look after the proceedings of liquidation.

We may end up a crore rupees of bleed for two more quarters. Got it.

Our run rate after this goes down, the China and the Europe, the EBITDA will improve by 9 crores per quarter. At present, this bleed is not shown in operational EBITDA.

It's shown as a discontinued business.

I know.

It's more of a cash bleed, how you read at the EBITDA is if it is net of that, then there's no impact on EBITDA.

Got it, sir. Great.

Thank you very much for the information.

Hello. Thank you, sir, for taking my question.

Sir, just a couple of questions. Sir, have we got the

Hello. Is it audible now?

Hello, is it audible now?

Yeah. Sir, have we got FSSAI approval for Essential 4001?

Hello?

Sorry?

4001.

Hello?

Yeah.

Have we got FSSAI approval?

No, we've applied for it. Acha.

Okay. What is the status of selling Vincard in Indian market?

There is a potential, we are working on that.

Okay.

It's basically the market is large. The cheese market is growing in India, and Vincard is a product which goes into manufacturing cheese.

The process is, of course, these are all processing aids, most producers don't really need to get FSSAI because we are FSSAI approved, but the product doesn't need to be because it's not part of labeling. That's a question of interpretation.

That's something that is in the pipeline.

Okay. Sir, what would be the overall take on vanillin sales for FY '27 guidance?

What would be your value growth?

No, we've already given that, no?

Okay. Guidance for blends?

For blends also, we've given that, 25% growth over FY '26.

Okay. Thank you, sir.

Thanks.

For the company as a whole, what kind of revenue guidance are we targeting for the next couple of years, '27 and '28?

So '27, we should be looking at about 2,200.

2,200. Okay.

Yeah.

Okay. For '28?

That'd be about 2,400.

Fair enough. It's considering as of now?

Sorry?

2,200 is considering similar prices as of now of the products?

Yes.

Okay. What kind of CapEx are we looking to put in for the next couple of years?

CapEx. At present, no new plants.

There is a maintenance CapEx, which keeps on coming because of the big plants which we have. We have a maintenance CapEx of around 40 to 50 crores on an annual basis.

At this moment, we have not approved

CapEx. Okay.

To the extent of working capital we have,

we are going to pay the debt also? If I'm going to increase my revenues, there will be

No, working capital is fine. I meant the long-term borrowings.

These are being

Nothing on cards. These are being repaid, and then we'll go on as around 40 to 50 crores, which is repaid every year.

Yeah. Got it.

I want to understand as a company as a whole, there are so many moving parts. There's vanillin, then there are blends.

As the vanillin prices rise, the blend prices are falling. Something or the other is pulling our performance down.

How should we look at it?

Very difficult to answer that question, eh? Our blend prices are not falling.

Our margins in the blends are quite stable. Gross margins are not falling.

It's only in the straights business, which is the TBHQ, BHA business, where the margins have fallen in this year. Vanillin, the gross margin remains stable.

Got it. Thank you, and all the best, sir.

Ladies and gentlemen, thank you very much for participating in this conference call. We look forward to talking to you in the next of this quarter.

Till then, good day. Good evening.