Thank you. Good afternoon, everyone, and welcome to Neogen Chemicals Q1 FY27 Earnings Conference Call.

Joining us today from the senior management team are Mr. Anurag Surana, Non-Executive Chairman; Dr.

Harin Kanani, Managing Director; and Mr. Gopikrishnan Sarathy, Chief Financial Officer.

We will begin the call with opening remarks from the management team followed by an interactive question-and-answer session. Before we begin, a standard disclaimer: certain statements made during today's call may be forward-looking, actual results could differ, and a detailed disclaimer is available in our Q1 FY27 earnings presentation, which has been uploaded on stock exchange websites.

With that, I would now like to invite Dr. Harin Kanani to share his opening remarks.

Thank you, and over to you, sir.

Good afternoon, everyone, and thank you for joining us to discuss our Q1 FY27 financial results and outlook. I hope you had an opportunity to review our investor presentation.

I will begin with key performance highlights and strategic developments during the quarter along with progress of our growth initiatives. Following this, our CFO, Mr.

Gopi Sarathy, will cover the financial highlights. The global chemical industry continues to navigate a complex operating landscape characterized by persistent geopolitical volatility, uneven end-market demand, and ongoing redrawing of supply chain dynamics.

While near-term macro headwinds persist, our core strength lies in how we navigate them with agility, financial discipline, and operational rigor. Anchored by the deep domain expertise and chemical synthesis capabilities we have built over the past three decades, we remain focused on protecting core margins, supply reliability for our customers, and driving rapid progress across three growth pillars, particularly the battery materials segment.

Amidst this ongoing shift, I am pleased to share that Neogen Chemical has delivered a strong performance in Q1 FY27, marking a solid start of the new financial year. This growth was driven by volume gains across our core business verticals, sustained customer demand, and our highest-ever quarterly revenue recorded in both organolithium and battery chemicals portfolio.

Let me quickly summarize the key financials. In Q1 FY27, on a consolidated basis, we recorded revenue of ₹250 crore, registering a robust growth of 34% year-on-year.

EBITDA grew by 53% year-on-year to ₹48 crore, with EBITDA margins expanding by 260 basis points to 19.3%. Profit after tax stood at ₹17 crore, surging 67% year-on-year.

Our base business demonstrated immense resilience despite ongoing global supply chain volatility, elevated shipping freight costs, and temporary overheads related to interim toll manufacturing arrangements. We have successfully initiated cost pass-through mechanisms with customers across key raw materials and input costs such as utilities, freight, and packaging to safeguard our operating margins.

I will now provide key operational updates across our core operations and expansion projects. Dahej replacement plant and insurance recovery update: so reconstruction of our replacement facility of Dahej is almost complete.

Trial runs are actively underway, with commercial production set to commence within current quarter, within Q2. On the insurance front, cumulative recoveries to date stand at ₹164 crore, which is comprising of on-account insurance claim as well as salvage realizations till now.

Our net claim receivable as on date stands at ₹186 crore on a consolidated basis, and we continue to engage closely with insurers to expedite final settlement against the same, followed by some additional recoveries under various other insurance policies, such as loss in profit. Board approval on fund raise QIP: to support our long-term capital requirement and prepare our company for growth opportunities coming future in the battery material as well as organolithium space, we decided to deleverage the deleverage our balance sheet, and the board has approved raising of ₹600 crore through an issue of eligible securities via a QIP, subject to shareholder and regulatory approvals.

Updates on battery chemicals and Neogen Ionics performance: so Neogen Ionics delivered a robust performance in Q1 FY27, generating ₹19 crore in revenue compared to ₹5 crore in Q1 FY26 and delivering over 50% of the entire previous year's revenue in just three months. Execution across our battery material facility remains on schedule.

Commissioning for electrolyte is targeted for H1 FY27, and lithium electrolyte salts remain targeted for H2 FY27. Mechanical assembly for our electrolyte plant is complete, trial runs are already initiated, and product validation leading domestic cell manufacture is actively progressing.

We have secured provisional approvals from four international customers for lithium electrolyte salts and successfully completed final site audits from all four electrolyte manufacturers. Commercial supplies will commence post final plant trial approvals, with global cell producers accelerating their transition towards non-FEOC, non-PAP-compliant supply chains to meet US tax credit requirements by 2027.

Neogen is uniquely positioned to serve this demand with our partner with established technology from Japan. Our strategic partner, Morita, remains fully committed to their $20 million equity contribution towards the joint venture, which is expected to come during Q2 and Q3 of the current year.

Turning the macro environment, the key industry dynamics, our battery material strategy is strongly backed by government support and proactive policy actions. Neogen with our customer remains currently the only gigascale example where the local supply chain has been established, which has been appreciated by various government departments.

The ecosystem is seeing accelerated accelerated momentum driven by the product ramp-up of PLI-ACC battery manufacturers, as well as non-ACC PLI manufacturers, and further the allocation of 10 gigawatt hour ACC PLI re-bidding tranche and government's proposed PLI scheme for battery components, which will be pivotal in in incentivizing raw material localization. According to the Ministry of Heavy Industries report, domestic battery demand is projected to surge from already 33 gigawatt hours last year to 92 gigawatt hours by 2027 next year, eventually reaching more than 200 gigawatt hours by 2032.

Out of that total, almost 63 gigawatt hour is currently under development in India and further expected to be commissioned out of this 30 gigawatt hour is expected commissioning in 2026 alone. This rapid scale-up underscores the expanding market opportunity ahead for us.

We position Neogen Ionics to serve both domestic requirements and global non-FEOC, non-PFE demand. FY27 represents a strategic turning point for Neogen Chemical as our capital investment transition into revenue-generating assets, with the rebuilt Dahej plant coming back online, Neogen Ionics scaling rapidly, and our strategic position as a trusted non-FEOC partner gaining strong global traction.

We are set to capture expanding market opportunities across both specialty chemicals and advance battery materials. Backed by solid customer demand, improving operational leverage, and disciplined capital allocation, we are happy to improve our standalone guidance from ₹875 to ₹950 crore to ₹950 to ₹1,050 crore in the revised range.

We remain fully committed to disciplined execution, expanding our market leadership, and driving sustainable long-term value for our stakeholders. With that, I hand over the call to our CFO, Mr.

Gopikrishnan Sarathy, to walk us walk you through the financial highlights.

Thank you, Dr. Kanani.

Good afternoon, everyone. I would now take you through the detailed consolidated financial performance for the quarter one.

Please note, all the comparison are on year-on-year basis. Revenue from operations stood at ₹250 crore, up 34% from ₹187 crore in Q1 FY26.

The revenue trajectory was anchored by strong volume led by organolithium, inorganic chemicals, and battery chemicals. Across our operational verticals, organic chemical generated a revenue of ₹194 crore, reflecting an 18% growth, while inorganic chemical segment delivered a standout performance with a revenue surging 158% to ₹57 crore.

Gross profit rose by 37% to ₹117 crore, reflecting an optimized product mix and cost pass-through arrangements. EBITDA stood at 48.2 crore, registering a growth of 53% from ₹31.5 crore in Q1 FY26.

EBITDA margin expanded substantially by 260 basis points to 19.3%. Margin expansion was achieved despite temporary expenses related to Dahej plant rebuild, toll job work-related expenses, initial expansion costs at Neogen Ionics, and freight spikes.

Depreciation was higher at ₹8.2 crore, up 42% due to smaller capexes which we had added during the year. Finance cost stood at ₹20.8 crore, up 64%.

The increase in finance cost reflects the higher debt drawdown to fund the ongoing capex at Neogen Chemicals Neogen Ionics, increased working capital intensity due to supply chain inflation, and temporary holding costs pending the insurance claim disbursement. Profit after tax reached ₹17.1 crore, growing 67% with PAT margin of 6.8%.

Looking ahead, as the replacement Dahej plant begins the regular commercial operation and NIAL capacity scale up through H2 FY27, we expect the operating leverage to improve significantly alongside normalized cost structures. Operating performance will be further bolstered by pending insurance claim recoveries.

Additionally, our proposed QIP fund raise up to ₹600 crore will provide a substantial financial flexibility, allowing us to optimize our debt profile and also create a headroom for future growth. I am also glad to share further for FY26 we are publishing our first integrated annual report.

This report incorporates our Business Responsibility and Sustainability Report, BRSR, along with reasonable assurance report. Moving to the integrated framework reflects our deep commitment to transparency, higher governance standards, and long-term value creation for all our stakeholders.

That concludes my remarks, and I would now request the moderator to open the floor for Q&A session.

Good afternoon. Just wanted to understand the battery outlook in terms of chemicals.

How big can this opportunity be in 5 years' time and what would it be as a proportion of our business in that period of time? One.

Second is that we hear that battery technology is being restricted by China. Is it realistic to assume that the growth will take place the way we anticipate?

Sure. Thank you for your question.

When we are thinking of battery, Neogen as a policy talks about what revenue guidance we can give based on capex which is currently underway. The current capex that is currently undergoing can cater to give us a revenue of around ₹2,400 to ₹2,900 crore, depending on the lithium prices ongoing, and we expect to achieve this by FY29.

That was a target for full utilization which we had taken. If we are talking of two or three years' period, we expect around ₹2,500 to ₹2,900 crore of revenue potential.

This is mostly taking care of only 30 gigawatt hour of let's say electrolyte demand, and then little bit around 5 to 10 gigawatt hour of salt which is being sold internationally. That is what the current capacity is fully designed for, around 40 gigawatt hour of salts and 30 gigawatt hour of electrolyte.

Now as we have shared in our presentation that even today around 60 gigawatt hour of cell production capacities are ongoing, and over 5 years the government expects the total demand to be 236 gigawatt hour. Total demand is going to be approximately seven times of what we mentioned just for India, for the sake of electrolyte, and then also we will be open to international demand.

The demand is going to be reaching let's say if we are talking of 5 years, tens of thousands of crore in that range if we consider electrolyte for India and electrolyte salts and additives for the international market. At present, Neogen has already taken a significant step to achieve 2,500 to 3,000 crore in the next 2.5 years.

In 5 years it would be significantly higher, but as a policy, once we make some investment decision, then we can give a specific number to that.

Does this mean that our business, the way it will look is what 60% will come from battery chemicals and 40% from other chemicals?

In other chemicals also, we have many growth drivers, our pharma, agro, CSM, future potential business in semiconductor. We've not given any long-term guidance around that.

Yeah, 5 years down the line, it can be 50-50. It's a challenge to my regular business team also that how they can keep up with the growth we will have in the battery space.

What about the change in battery technology, sir? How will we handle that?

You also mentioned about restriction from China. Today Neogen's electrolyte and electrolyte salt capacity, we are very fortunate that we have Japanese partners, and internationally so there is no dependency on China for Neogen in terms of technology, as well as we had our own home-grown technology also, and the Japanese technology further improved the same.

We don't have dependency on China. Also, in terms of changing technology, lithium-ion battery remains one of the most efficient technologies currently.

There is some discussion about shifting to the sodium-ion, but that will be gradual and will be, in my view, only for some niche applications for low temperature or very low-cost kind of applications. However, lithium-ion batteries are right now the most efficient.

Having said that, in case of electrolyte, the way the sodium-ion technology is developing today, the same plant can also be used for sodium-ion. Between sodium and lithium-ion, there will not be too much impact on Neogen's operations.

Thank you, sir. Wish you all the best.

Thank you.

Hi, good evening. Thanks for the opportunity.

Dr. Harin, if you can start with what is our current year guidance for the battery chemical business, top line and margins, then probably it will be helpful.

As I

as we explained earlier, we are looking at a ₹300 crore kind of revenue for the current year for the battery business. We currently maintain the same.

Most of this would be in the second half, as the US customers are expecting the US customers are expecting to shift from China to like non-China or FEOC to non-FEOC suppliers from January onwards. We have already started some trial supplies and some trial sales towards these customers, and we expect that to ramp up and we expect the shift to happen in Q3 and Q4.

The In terms of the other guide other guiding factors for this is the increase in the ACC PLI the cell production in India. Already there is one gigafactory which is started at a gigascale and now increasing their in the midst of increasing capacity.

The second gigafactory also has started their trial production and expected to start commercial production soon. There are two more expected to start before the end of the current financial year.

I think with this four customers, depending on the exact time at which they start, we would be able to like, we would be able to either exceed the production. Currently what we have done is that we've kept some buffer because last year we had gone wrong, we would like to maintain the same production.

If India ACC PLI the cell production increases or starts in a very nice way or ramps up faster, then we might be able to increase from the current guidance.

Safe to assume that a large part of this ₹300 crore guidance is coming from the salt revenue rather than the electrolyte? If that is the case, and you also mentioned that most of the main volumes will come from Jan 2027.

Largely the three months of salt revenue should itself will be giving this kind of a revenue. That's a right understanding?

Yeah.

We would expect sometime from November, December the uptick would start because January is when they need to shift. Shipments from India will start in November and December.

Of course, there will be some sales before that also. We have currently approximately kept around ₹200 crore for the salt and ₹100 crore for the electrolyte.

Of course, electrolyte is subject to Indian ACC PLI exact production, how the plants ramp up and how they start. We have not considered any revenue from Pakhajan yet.

We have said Pakhajan to come online in H2. The team is making effort so that we can complete it by Q3.

Any shortfall in electrolyte can be made up by additional salts which we can get from Pakhajan in Q4. That's the way we've currently planned it.

In case if the electrolytes are on track and we are also able to deliver revenues from Pakhajan, then we would be able to out-perform our current guidance.

Understood, sir. Just one more follow-up on the same topic.

This ₹200 crore salt we are talking about, what kind of a salt pricing and electrolyte pricing and LCE pricing that we are building in based on which this number is coming?

Currently, we have a long-term contract with one of the customers, and in this contract, the pricing is currently already fixed based on a lithium-based formula. The normal stable lithium price is expected to be $20 plus-minus $5, $15 to $25.

Currently we are expecting the current lithium carbonate prices are in that range. This is kind of like the stable lithium price between $15 to $25, close to around $20 of lithium carbonate.

Based on that, the salt pricing is currently derived. Both salt as well as the electrolyte, both prices are derived based on a stable lithium price.

For us, lithium is a pass-through for both salt as well as electrolyte customers.

Understood. Of this ₹200 crore that we are talking about, how much do you think do you see if it's from the firm order that you already have, kind of an order book kind of a business?

I think if you look at our contract, then based on the contract, everything is firm. As I explained in our opening remarks, that as the customers complete their qualifications, all the four customers have audited and approved Neogen facility.

Some of them are now ready to start purchasing slowly in Q2 as well as Q3. In Q2, Q3, they might require some special kind of a pricing.

Some of them are doing a trial at a commercial level in the plant, and then they would start shifting. We expect this process to get over in Q2, Q3 so that towards the end of Q3 and in Q4, they are able to fully buy their requirements from us.

That is currently the status is there.

Sir, you said something like a special kind of a pricing. What do you mean by that?

No, we have a formula price. Special pricing meaning normally we expect once the non-FEOC requirement kicks in, it will be completely formula-based price.

Before such a period, they may want to have, okay, what is today's market price? The market price in China is fluctuating every month-on-month.

To secure some volumes in Q2 or Q3, it could be slightly lower than the long-term formula price that we have. As we move to the regulated supplies in Q3, Q4, then it would be based on the formula price which we have taken for our consideration.

Current spot price is lower than the formula price, sir?

Yes, the current China spot prices are lower than the formula price.

Understood. Finally,

one In the last six months, few times they were higher, few times they are lower, right? It's a very fluctuating thing.

The difference between the formula price and the spot price is now significantly reduced as compared to what it was in 2025 and maybe some part of 2024.

Understood. One final question on the cash flow for this year.

If you take the capex for this year, if you can guide for that number and what is the source? How you are proposing to source fund those capex number?

That will be really helpful.

Whatever is a balance capex left for Neogen Ionics, that will come from whatever the remaining debt that we need to still draw because our contribution is largely done, and then some bit which will be coming from Morita's contribution. Ultimately from our side, maybe only ₹30-40 crore as a equity contribution we would need to do towards the end of the financial year when we complete fully the capex and start getting ready for contributing for the working capital.

From Neogen's side, there will be very limited contribution needed till the completion because the financial closure we already received.

Understood. Sir, one final question on the legacy business.

You increased the guidance for the legacy business. Was it driven largely by the underlying price increase or some kind of a capacity addition or a mix change?

How should we understand that number?

What we have seen is our organolithium capacity, we hit our peak utilization level. As you have seen when we took that plant, it was 10 tons per month active or 120 ton, and we increased the capacity 2.5 times to 300 tons.

Now in Q1, our plant was able to hit the full utilization already, and based on that, we are also considering to further increase capacity slightly by end of the financial year. I think it's largely driven by that.

Also when the organolithium business grows, in the past we've explained that we can also get some by-product lithium which we can recycle back, which also helps our inorganic lithium sales. Both these did very well.

Based on the performance of the organolithium, lithium, and we still seeing strong demand in the organic chemical space as well. Considering that, we have revised our revenue guidance in the legacy business.

Sir, in the legacy business, what was the underlying volume growth for the quarter and last six months, if you can share? Will be helpful.

We are comparing Q-on-Q, last quarter was the first quarter after fire and still our job work, etc. was not in place.

Of that ₹40 crore growth, around ₹15 crore kind of came from increased sorry, ₹15 crore came from increased prices related to lithium and other raw materials. The rest of it was completely volume-driven.

Understood, sir. Thank you very much, and all the best for all your plans.

Thank you very much.

Thank you.

Good afternoon. Thank you so much.

Sir, first on the ₹600 crore proposed fund raise, if you could please just help us with the proposed uses of this. Is it primarily debt repayment for the time being or also some capex that you're considering?

If it's debt repayment, then by how much do we expect the finance cost to go down following this? Okay.

The board has right now approved the QIP, and we basically expect as a temporary measure, yes, it will be basically for debt reduction. The main purpose of this is that we are seeing many future opportunities.

For example, in my opening remarks, I mentioned the Government of India is planning battery material supply chain PLI, as well as after JV with Morita, we've also seen a very strong demand in the international market. We would like to be ready for the case.

The current salt capacity that we have in place will cater to either the US demand fully or our India demand. We have to be ready for a case where we need to take care of both.

Of course, this is something which doesn't have to happen immediately, but as the business develops, we have to be ready for that. We have to also be ready the way organolithium business is progressing if we have to increase some capacity, and we also want to get into the next phase of R&D where from just making basic process, we need to invest into R&D where we are working on battery performance improvement by novel additives and novel electrolyte designs.

I think to basically be ready for these and few other opportunities which are in front of us, the board decided it would be good to kind of deleverage the balance sheet and reduce the debt so that we are ready to capture any of these growth opportunities which are expected to present in front of us. That's the main guidance.

I would ask maybe Gopi to comment how much the finance cost would reduce down by. See,

at the maximum thing, at the full ₹600 crore, naturally if at all I repay around say it's just a max if at all I repay, say, whatever crore I repay, you can just multiply with the interest rate, say, 8 to 8 8.5%, you can multiply it and take it as the interest saving.

Maybe roughly around So

if the entire thing is just repaid, roughly around ₹40-50 crore of for the year, for the reduction annually, once we spend

it. Again, subject to like, this is subject to, like I said, is there are some other opportunities, considering that, we will have to decide what is the final interest rate saving.

Sure. Number one, on the battery PLI component scheme that you spoke about, would it be possible to just help us understand maybe the broad contours of what might be offered by the government?

Is it capex-linked incentive, is it opex-linked incentive, how much in quantitative terms could Neogen potentially hope to benefit from it? Also, any expansion that you consider because of all of these developments, what would the timeline to embark on such an expansion be?

Do you have to do that by the end of this year or maybe sometime closer to say, approaching optimal utilization of your current expansions? See,

regarding the PLI scheme, I think this is still under discussion by the government, and while it has quite advanced stage, but not yet finalized. It would be not right for me to comment on that because ultimately this is government policy, and only once the scheme has been published, we should basically consider it.

The broad idea or the main intent of the government is to support localization of the cell production, because as we mentioned, the government is seeing very high growth in the demand for the cells, and unless there is a local production, there will be a strong dependence on imports internationally. Any restrictions can restrict our plans to reduce dependency on oil through EV or through ESS storage.

Considering this as a very strategic area, the government has already re-announced the bid for 10 gigawatt hour so to make sure that the entire 50 gigawatt hour ACC PLI, there are recipients. They also want to increase the number of recipients.

The revised scheme, the 10 ACC PLI is targeting two to three different players, minimum two to three, so that there are at least four or five PLI recipients. This is what the government's current target is.

To increase the competitiveness because the Indian industry like Neogen and few others battery material suppliers are just starting against competing against Chinese or other companies where already more than 100 gigawatt hour of capacities are available. Therefore, to give us some kind of a level playing for the initial, the government is considering this option.

Any step by the government would be helpful, whichever form, whether it is capex, whether it is opex. More important is the intention of the government to support the industry and the desire to have the local supplies.

Of course, this was already part of the ACC PLI requirement, but now the government is more proactively ready to support whichever stage, each and every stage, which is the positive sign for Neogen. In reference to your second, when the capacity increase would be triggered, I think we will be very careful in triggering this, once we have a full visibility of the utilization of the existing, only after that it would be triggered.

We have to appreciate that anything in the battery we do requires around 12 to 18 months to set up the capacity, and then another at least 6 months to 12 months to qualify. Therefore, we need to plan at least 2 years, 2 to 2.5 years ahead whenever you expect the capacity.

We will take a call based on that, but currently there are no specific timelines. We just want to be ready so that if needed, Neogen is ready to basically take action in that area.

Thank you. These PLI incentives, would you expect to pass along to the customers, Harin, or would you think that the industry could retain them?

That's question number one. Second was some of these cell manufacturers in India, they have Chinese technology partners, like for example, Exide and Amara Raja.

There's an understanding that maybe the technology partners might be asking them to use Chinese electrolyte formulations itself. In that context, how easy is it for us to break through with these guys with our Japanese formulation?

In that context, how confident are you feeling about the FY29 guidance for full utilization of electrolyte or what exactly underpins the confidence over there?

Sure. Like again, in reference to, how the PLI benefit will be shared, I think it's too premature to discuss till the government actually comes out with the PLI scheme.

What basically we expect is that it basically puts us at par, and while electrolyte is a local required material, therefore it has to be bought locally. The ultimate aim is that when the customer is doing that, they are not paying a heavy price as against what are international prices.

Basically to remove the disparity between prices which comes from time to time, in international prices and India prices. That would be the first concern, to make sure that the customers receive like, a very competitive price in line with whatever is the global prices, so that the cells which they are making are also very competitive.

That is the main intention of the PLI, and that would be the principle with which Neogen would work in like basically sharing the benefits so that the customer is not having a financial penalty to basically purchase from Neogen once the government also gives us the support. In terms of technology, see there is always a period where the company does sorry, there is always a period where the cell producers have to work with the technology provider, but, that is usually 3 months, 6 months, whatever period.

Post that, the customers are free to like, free to change over to a to a raw material local raw material supplier. The PLI further makes it more possible for them to take that on a more active basis.

When it comes for us, we have right now worked with like, five out of six gigafact the large gigafactories which are coming, and we are very confident that, we should be able to give them a electrolyte which has the similar performance or better as compared to what they are using currently or what has been proposed by their technology partners. We are also working on the sixth one like, where we can work together, but at least for the five, we have a clarity.

Considering that, and considering the fact that just today in finance in current and like current and next financial year, current financial years like almost four out of six gigafactories would start and another two would start in, let's say, beginning of next financial year, it gives us enough time for them to reach at least 50%. The combined capacity of these people itself is more than 60 gigawatt hour.

Even if they hit 50% utilization also, then also we would basically reach our full utilization full utilization target. I think this is like normally takes about a year for somebody to stabilize, and the fact that two gigafactories have already started and others will be starting this year, we feel by FY29, they should be at least at 50% or higher utilization.

There is already demand. The good thing is that the demand already exists, it's just the manufacturing needs to get stabilized.

Even if they reach 50% plus kind of utilization level, then Neogen has a very strong case to reach full utilization level. Further, this is just talking of local electrolyte.

We will also have international salt business as well as, like, some of the solvent also are now required under non-FEOC requirements of the 45X. The components, the electrolyte salt, additive, as well as the solvent also can be sold internationally.

Any capacity if at all unutilized when we sell internationally, we anyway achieve 70-80% of the total value. Therefore, like, considering that, we are still confident that, in FY29 as per our original guidance, we can hit the full utilization of ₹2,400 to ₹2,900 crore revenue.

Got it. No, thank you so much.

That's very helpful. Just one last thing from me if I may, just two, three data points, very specific.

One is the ₹19 crore revenue from Neogen Ionics this quarter, possible to break it down between salts and electrolytes? That was one.

Second thing was just

Largely salts.

Largely salts, okay. Thank you.

Any inventory gains during the first quarter given that gross margins seem to have gone up significantly despite rising raw material prices?

Indirectly in a sense that we had some older inventory, but when we were selling it, we got some benefit out of that.

Possible to quantify that or? That's

very difficult, sorry.

All right. Last thing was just you mentioned that the guidance upgrade is largely due to the organolithium business, which I guess is clubbed within organic chemicals, right?

Organic chemicals revenues have been largely range-bound between say ₹180 to ₹190-odd crore for the last four quarters, whereas it's actually inorganic that has gone up very sharply in the last three, four quarters. If you could please just explain that a little bit.

Yeah. There is, as I explained, that the organolithium also supports the inorganic growth.

As so the the sharp increase is as compared to the same quarter, let's say, Q-o-Q basis, sorry, on a year-on-year basis. If we are looking at a year-on Q-o-Q, consecutive quarters, this was already increasing.

As we mentioned, we reached the full utilization, but even previous quarter also was 70%, 80%. Yes, this is the time where our new capacity was fully utilized, we reached our highest revenues.

Therefore, like, some of the organolithium capacity increase was already built in, let's say, Q3 and Q4, and now we hit the peak. When you look at a year-on-year comparison, there's a sharp difference in organic because of that.

Thank you for taking my question. Just wanted to understand first thing, I missed out on the revenue guidance for the base business.

If you could just repeat that for '27 and '28? We clocked in around 826 crores in '26, just wanted to know what is the increased guidance for '27, '28 just for the base business.

For the '27, '28, you mean? Yes,

yes.

Yeah. This year target, we had originally given ₹875 to ₹950, but based on the Q1 performance, we revised it from ₹950 to ₹1,050.

We feel the base business should be able to cross ₹1,000 crore in the current financial year. For the next year, we had expected around 10% to 15% growth.

We've not given a specific number for FY27-28, but we feel it will have at least more than 10% growth because we are not doing any significant capacity as of now. The focus next year would be to stabilize the business, optimize the business, make it more efficient in terms of margins and in terms of working capital.

In the base business, the next year focus will be to further streamline the business and optimize it. At least with the same capacity, we feel we should get at least 10% to 15% increase, we should be somewhere between ₹1,100 to ₹1,200 crore kind of revenue for the next financial year.

However, a proper guidance we will give more closer towards the end of the year.

Sure. Sir, this is assuming the Dahej plant will be back on track of course, and there'll be a good smooth ramp-up going ahead, right, for the next two years, one or two years?

Yes, there will be a ramp-up in the current financial year, and next year we want to basically work on better optimizing. Because once we have a full utilization, which is around that ₹1,000 to ₹1,100 crore, we start hitting ₹250 to ₹300 crore kind of a quarterly revenues, then the main focus will be on improving the product mix, trying to select for larger-volume molecules, reduce the total large number of products that we have, right, and then focus on margin and working capital efficiencies in the base business.

Sure, sir. Sir, for '28, what are we running for battery chemicals?

You said ₹300 crore for '27, but '28, what are we running for revenue for battery chemicals in '28?

We have not given a guidance for that, but what we had estimated in the past is that looking at, there should be a very strong demand for the salt, we should have a salt business at 70%, 80% utilization level. The electrolyte also would be between 30% to 50% utilization level.

We feel there's a very strong case for us to cross ₹1,000 crore. It should be something more than ₹1,000 crore, but the exact number, because all these businesses are just starting, it's better that we provide again towards the end of the financial year.

Sure. Thanks, sir.

Sir, just one question I had in terms of, of course, lithium-ion is a very well-proven technology. Now I just wanted to know in terms of the silicon-carbon batteries, that's also as an evolving technology in premium smartphones, etc., that's being adopted rapidly and showing good efficacy, longevity as well.

Just wanted to know in that technology also, our electrolytes and salts have the same usage or is there any reduction or increase? Just could you give some color on that?

I think most likely when you're saying silicon-carbon battery usage, what you are referring to that the anode side. The anode side usually is normally only graphite, but to increase the efficiency of the battery, people use a combination of silicon and carbon in the graphite.

It's still a lithium-ion battery, but instead of just a traditional anode with a graphite, you are using silicon-carbon graphite, which increases the efficiency and the performance. The electrolyte mix changes a bit, the additive changes a bit, but broadly it remains within the same contours where the same plant can make it, the same type of additives are used, only the percentage is optimized a bit when you have this anode for the optimum performance.

Thanks for the opportunity. Sir, first question is just a clarification on the legacy business and battery chemical business EBITDA margins for FY27 and '28.

I think I missed it. Yeah.

I think we can provide you EBITDA margins, so as we have said, in the current year our base is 18% plus-minus 1%, 1.5%. Mostly, once Dahej plant starts, we will have the job work-related or such kind of expenses would kind of come down.

Again, first quarter is very strong, but we expect that at least during the year we can maintain the same guidance, 18% plus-minus 1%, 1.5%. There will be some additional costs also which should come online once Dahej plant comes, and maybe it's not fully utilized, we'd like to maintain the same margin.

Next year, depending on how the global macroeconomic is, we would like to optimize the business a little bit better and basically have between, let's say, 18% to 20% EBITDA margins for the next financial year. So 18% plus-minus 1%, 1.5% for the current year, next year 18% plus, hopefully not minus, or 19% plus-minus 1% kind of a range for the next financial year.

This is for the base business. It's very difficult to give EBITDA for battery business.

We would like to kind of maintain 20% ROC on full utilization levels. In FY29, we expect a 20% return on capital on the battery business, which would be, let's say, around ₹1,800 crore of capex and some working capital requirement.

Based on that, you can estimate a EBITDA at a full utilization level. Interim EBITDA percentage, because lithium price can fluctuate, different capacities should be fully utilized, partly utilized, depending on that, it's very difficult to predict the exact EBITDA for the current and the next financial year.

Sure, this is helpful. Sir, second question is, this year battery chemicals, you said the components will be ₹200 crore electrolyte and about ₹100 crore sorry, ₹200 crore salts and ₹100 crore electrolyte.

In case the domestic battery capacities get delayed, then probably there could be a delay of electrolyte business. Is that the right way of looking at it?

However, the ₹200 crore salt business is largely in terms of the contract with

Maybe, Rohit, I got your question. As I explained earlier, that what we have done is that for ₹200 crore, we have just considered what we can do from our Dahej capacity, and we have not considered the Pakhajan volume.

What we are trying, that in case if the battery manufacturing get delayed and we are not able to achieve the ₹100 crore revenue from the electrolyte business or we are falling short, then Pakhajan's contribution in Q4 we have not considered in this guidance. We hope with the Pakhajan contribution, we can make up and we can still achieve the ₹300 crore revenue.

Hi, sir. Thanks for the opportunity.

First bit on the salt side. Now given that we have some initial confirmations and success there with global clients, would it be fair to say that the ramp-up in salt business for next year will be more or less let's say a full utilization?

We are also targeting in the next financial year around 70%, 80% utilization levels for the salt business.

Sure. Just related to it, any incremental salt capacity or even additive capacity, as you highlighted earlier, how much time it will take for you?

Whether from a basic infra perspective, largely things are in place, or so it will be more modular or will it require a significant capex?

No, it will require a capex, but we have kept a space from a timing point of view to add around 2,000-ton salt capacity in Pakhajan and 500-ton capacity for additives in Dahej. Around 2.5 tons can come relatively faster.

When I say relatively faster means 12 to 15 months kind of a period just to get the capacity online, and then maybe approval takes another 3 to 6 months. Anything more than that, we have to start from a foundation level, it will take longer time.

Normal is let's take 15 months, up to 2,000, 2,500 would be around 15 months just to get the facility online, and then maybe another 3 to 6 months for approval. It's still a 18 to 24 months kind of a process from the time we decide to get go.

Basically it's very difficult for that to contribute in this or next financial year. Once we have a clarity on FY29, we'll have to plan sometime towards end of FY27 or early '28 to basically take care of the requirements in FY29.

Sure, sir. Second bit on organolithium as well as the CSM part of the business in the core operations.

How much time you said for organolithium, we are largely fully utilized as per the run rate of Q1. What timeframe are you looking at in terms of ramping this up?

Secondly, on the CSM side, we had plans earlier to scale this part of the business up as well. What are your thoughts there in terms of timeline?

See,

we would like to take a view because while this quarter was the first quarter we hit full utilization, I think next quarter we would like to propose to the board about organolithium. Fortunately, it will be incremental capex, it will be less than kind of ₹10 crore kind of ₹10-15 crore kind of a capex.

The value will not be very high, once we see the business visibility continuing for one more quarter, then we will basically go ahead and plan at least the initial capacity increase in the existing and then also maybe a long-term capacity beyond what we can do at the current site. That would be something which should be decided maybe at the end of Q2, but broadly in the second half of the current year.

This is on the organolithium side. To answer your question on CSM, in a way the customers are still interested.

It's a very broad-based CSM where we have pharma, agro, semiconductor, some flavors and fragrance, as well as some specialty materials. We have four or five industries, the customers are committed, but in CSM you are actually selling your capacity, not a product.

Dahej was our flagship capacity for that. In absence of Dahej, we've not made any further progress.

All the customers remain engaged. Once our Dahej plant restarts, and again it's restarting with many improvements also, which we have incorporated based on our experience, it should be even more attractive for our CSM customers.

Based on the outcome of that, we will see CSM business, we'll have a better clarity in the CSM business in next financial year where we wanted to have the customers to test one more time in this year, and next year would be where we would ramp up further. Then depending on how this year and next year goes, will basically pave the path for increase in the CSM business.

A dedicated investment to support CSM, I expect to come on board by FY29, FY30. That is when the CSM business will have a big increase.

Sure, sir. Just lastly, on the core working capital, you said peak utilization in '28, and after that we should see improvement, or there should be some improvement in '27 as well?

That's it from my side.

No, '27 also we would target. Once our Dahej plant starts and streamlined, then you will see some improvement in FY27.

In the first six months is very difficult because we are trying to manage this growth as well as getting a new site online. FY28, you should see a significant improvement in the working capital cycle.

Done, sir. Thank you so much from my side, and all the best.

Thank you.

Hello, am I audible, sir?

Yes.

Hello?

Yes, we can hear you.

Okay. Great.

Thank you very much for this opportunity, sir. Sir, just first I wanted to understand on this battery chemical capex out of ₹1,800 crore, I think ₹1,300 crore we have already spent.

Incremental ₹500 crore would be debt-driven, the incremental capex that we are likely to do? This capex is likely to get commissioned by FY27 end, in entirety, right?

Yes. I'm just asking Gopi to confirm that a ₹1,300 crore number is correct, but, yes, the entire 1,800 would be completed by the end of current financial year.

This would be financed by debt?

Debt as well as the equity which is going to come from Morita, and around ₹40-50 crore of equity that we need to still complete.

Okay. Understood.

Sir, just wanted to understand on your working capital. In FY26, we were at about ₹8,600 crore ₹860 crore kind of a revenue.

On that, we required about ₹500 crore of working capital, right? Hypothetically, in 3 years FY29, if we have to achieve around ₹3,500 to ₹3,700 crore kind of a revenue, which includes your base business plus the Ionics business, ideally your working capital requirement might be close to what, ₹2,000 crore?

Even if we kind of assume some kind of improvement, that effectively means a ₹1,500 crore kind of a funding requirement. How are we going to do that?

Can you throw some color on this? Yeah.

Yeah. See, basically what we feel is that so sorry, one thing which we clarified from the beginning of the battery business, because the nature of this business is very different from our pharma.

Pharma, agro, where we have more than like 200-plus molecule, and we have more than some 350, 400 customers that we serve every year, and each customer has a specific specification. In case of electrolyte, we have like in case of battery business, we have like contracts, we have firm demand, and like we have, let's say, two or three salt and additive, like, some solvents and electrolyte, the complexity is much lower.

From the beginning, we have guided that the working capital cycle should not exceed more than 90 days for this business. Also for the base business, like, this was largely affected by like some changes in demand, like, in the last two years, as well as the fire incident and that we had.

Long term what we have is like, by the time we reach full utilization, let's say by next financial year, which is FY28, we would be at around 140 days working capital cycle, which is a stable. Then beyond this as we grow, our intention is to have like, larger molecules, reduce like or increase per-molecule kind of business size.

With that, it should further improve to maybe 110 and 120 days. In the beginning, first stage would be to reach around 140, 150 days by next financial year, and the 90 days cycle would be and and 90 days would be for the battery business.

I think with these numbers, you would not need as much capital as what you currently estimate. Okay.

What is your expectation at let's say a consolidated ₹3,500 crore kind of a revenue level, what sort of working capital would be required assuming all this improvement that we just spoke about?

I'm sorry, I can't do this math on the fly right now. If you take 90 days for let's say ₹2,500 crore kind of revenue and you take 140 days for around let's say ₹1,200 crore revenue, then whatever number comes minus what is today's.

It's something which has already been factored.

Okay. Understood.

What's the peak debt we are looking at? Considering this ₹600 crore also you would look to repay that debt, right?

By FY27, what's the debt level we are targeting?

Before ₹600 crore, the peak debt was around Net debt of 1,800.

1,800, net debt.

Yeah. If the ₹600 crore is fully used, then it should be maybe 1,200, 1,300 crore kind of, depending on how much gets used for other applications.

It's not just this, we have also insurance proceeds which is going to come. Hopefully working capital cycle also improves as we stabilize the plant.

We will see. It should be below ₹1,500 crore for sure, more closer to 1,000 if everything falls in place.

Broadly I would say once the ₹600 crore is raised, it should be let's say between 1,000 to 1,500, best case, worst case kind of scenario.

Got it. That's very helpful, sir.

That would be it from my side. Wish you all the best.

Thank you so much.

Thank you.

Hi, sir. Thank you for the opportunity.

Hello, am I audible?

Yes, we can hear.

Yeah. I want to know beyond India, which international market do you believe offer the largest opportunity for battery chemicals, and what edge does Neogen have in winning global customers?

I think US is the biggest market here, one in terms of cell production where there is a restriction of not depending on a single country. I think currently after India, US looks like the biggest market for us, or US could be even bigger because the total volume or the capacity which is already existing there is much larger, and many Japanese and Korean cell producers are already active in the US market.

I think US is the biggest. As I explained, the intention is to sell battery electrolyte components, electrolyte salt, lithium additives, and now maybe even some of the solvents, battery-grade solvents.

Together they constitute around 70 60, 70 or 70, 80% of the cost of the electrolyte. There are five major electrolyte makers in the US, out of which four have already approved our site, and hopefully the fifth one also is interested once our Pakhajan site starts, because that's with a stable Japanese technology, there was a very short time, he will directly approve the same.

Therefore, we would have access to all the US customers through these four or five major electrolyte makers. The advantage of Neogen is that let's say, for example, we have some of the international partnership, for electrolyte solvents, it's based on whatever we've designed with Mitsubishi technology, or our LiPF6 is with Morita technology, having established technology as compared to somebody who's just starting new gives a lot of confidence to the customer.

I think that is the advantage that we offer. We can scale capacity relatively quickly as compared to other geographies, and we already have a site.

The same site which is currently let's say Pakhajan site is starting at a 30 gigawatt hour for salt and electrolyte, but has a room to go up to 100 gigawatt hour. Therefore, the incremental capex would be even more efficient as compared to somebody starting new.

I think these are the things that we offer to our customers.

Sir. Thank you.

Hello, yeah. Am I audible?

Thank you. I have a question on Neogen Ionics.

Since most of the Ionics revenues are currently coming from the ACC PLI scheme players, what happens to offtake if these customers miss their own PLI targets or slow down their production? Because the ACC PLI scheme has been slowing down a bit since its inception.

Is Neogen actively building a non-PLI customer base to reduce its dependency?

Just to clarify, as I answered one of the previous investors, the current majority of the revenue is coming from electrolyte salts, which is in the international market. Currently it's not that we are doing only for PLI customers.

The second point is that the PLI is not slowing down, just the startup of the plants took longer than expected because battery cell production is a very complex plant. As I explained and also in our investor presentation, that almost six companies which are building together 60 gigawatt hour of cell production capacities have already come online or coming online in the current year or by next year.

Once they come online, and they will take about a year to stabilize, just the starting capacity is two times of Neogen's existing installed capacity. Therefore we feel, and it's PLI or non-PLI, electrolyte has to be made locally, and then Neogen right now has the largest capacity with a internationally stable Mitsubishi technology.

Therefore, we are not just dependent on PLI benefits.

Secondly, I wanted to ask that the liquid electrolytes have a limited shelf life as I studied. How is management thinking about the logistics and lead times for exports if we are exporting electrolytes?

Because it becomes difficult to export short shelf-life articles.

That's why we are not planning to export electrolyte. We will export electrolyte components, such as electrolyte salt, additives, solvents, etc., which are stable.

Electrolytes are for the local market.

Finally, I wanted to ask, with a consolidated debt to equity at 1.4 versus standalone at 0.68, and Neogen Morita now authorized to borrow ₹500 crore additionally, what is the peak consolidated leverage amount the management is comfortable with, and when does the 600 QIP start deleveraging the balance sheet rather than just funding more capex?

I think the Neogen Morita ₹500 crore approval is basically some of the loan which was already planned by NIAL will now shift to Neogen Morita. It is not a additional debt, it is in line with whatever we had decided, only part of it will shift to Neogen Morita, we wanted to have the approvals in place, right?

That is not increasing the debt. As we explained earlier that once we complete, the peak debt should be somewhere around ₹1,000 to ₹1,500 crore to begin with.

Therefore that would significantly reduce the debt-equity ratios.

Sure, sir. The final question from me is the electrolyte salt capacity long-term plan is to consume it entirely captively for in-house electrolyte production, or we have a more room for merchant sales strategy for the salt itself?

It's both.

We're aiming to have a more merchant sale and little bit on the in-house production?

No. We would like to do maximum in-house production, which would be in consultation with the customer.

At the same time, we are already serving international customers, they also remain our focus. Therefore, both are equally important for Neogen.

The volumes can change from time to time, depending on how much is the demand in the local market and how much is demand in the international market, we'll keep monitoring that and then basically plan our capacities accordingly.

Thank you.

Hi. Thank you for taking my questions.

Over the last 5 years, Neogen reported a very healthy cumulative ₹582 crore of EBITDA, but on the operating cash flow, it has been a negative ₹93 crore number even including the FY25 insurance inflow. Some of this clearly reflects necessary capex and capex cycle-related drag on the balance sheet.

Question really is, what structural changes are required for at least 70% of EBITDA to consistently translate into operating cash flow and when we might expect to see that kind of a conversion going forward? That's my first question.

Thank you.

I think one of the points is that when we start the battery business, our working capital cycle requirement there is significantly lower, 90 days as opposed to 120 sorry, 140 days target in the base business, and of course higher which has been the case in the last 2, 3 years due to various difficulties we faced, or challenges that we faced. In the base business, what we expect is that today, till we reach 1,000 crore and then we have a full utilization levels, the business model today requires around 140, 150 days 140 to 160 days of working capital cycle because of a large product mix.

As we get more into CSM molecules, where the single molecule is ₹50 crore, ₹100 crore or even our own molecules which are developing, we are targeting a ₹50-100 crore single molecule, so as we have more molecules of these types, then the working capital cycle further improve. Actually this has been a challenge because last 5, 6 years, Neogen has grown, and historically we used to keep as a de-risking strategy no single molecule to be higher than 30 sorry, 10% of the revenue.

That was the internal target during our initial growth times. That number ideally was around 5, 6 years back, it was around ₹30 crore per revenue.

Today, once we are hitting 1,000 crore, we should have molecules which are 100 crore, round about that. Far we've not been able to scale because these were largely going to come from agro and CSM business, but last 2, 3 years agro slowed down, and the CSM business also took a hit because of the fire.

I think once we are able to move to such large-volume molecules, then the working capital cycle will further improve in the base business. On the electrolyte side, straight from the beginning we are targeting a 90-day conversion cycle, which should be more efficient.

Whether it hits your 70% number or not, I'm not able to do the mental math right now, but at least it should be significantly better than now.

No, that's helpful, Dr. Kanani.

Any sort of ballpark, is it fiscal '29 and thereafter or? Looking at the pipeline, no one is sure about the agro cycle recovery in the industry,

but

from where you are and based on the capex that you have planned and the kind of working capital we expect both on the Neogen Ionics and the base business, what is the first year you expect that the pain on the balance sheet and the cash flow to be behind and we could just be realistic? I understand it may not be 70%, it may be 60% or whatever, but what is the first year we can see that, yeah, going forward starting this year, we expect consistently positive operating cash flow?

I can't promise consistently positive cash flows because Neogen will always be growing. As I have said that we want that once we reach full utilization levels in this year, next year which is FY28, we would want to optimize the business so that wherever we make some structural changes or select molecules which are more capital-efficient or working capital-efficient or margin-efficient, so that would be the target in FY28.

FY29 is where you will basically have a full year with the optimized kind of a business. The future growth also which will come will be basically considering that.

Then FY29 is also the year where you'll have a full utilization of our initial investments into the battery. Therefore, I think FY29 would be a very good year from cash flow conversion point of view for Neogen Chemical.

Of course, battery represents a very strong opportunity. Operating cash flow of course would be positive, but free cash flow, because depending on how much investment which we are doing at that point in time for the battery or even for the base business would be right for a capex around that time, right, for future maintaining the growth.

I'm not able to answer on that part, but the business would be very efficient from working capital standpoint by FY29.

Hi, am I audible?

Thank you for the opportunity. Most of my questions are answered, but, sir, I needed one clarifications on the salt bit, right?

You have mentioned that we have a formula-based pricing which is dependent on the LCE, lithium carbonate pricing, and most of our capacity is booked by the customers. Sir, can you explain that how much this pricing is influenced by the spot pricing of the salts, and does spot pricing impact our contracted capacity that we have with our customers?

I think the spot price would be more till the majority of the customers are following the contracted price, right? It's only in the interim till we start supplying under the existing contract or we enter into similar contracts with some of the established players, till such a time and this is largely being driven by the requirements for having non-FEOC kind of a supply, right?

Once we shift to that, hopefully majority of our demand should be met by that, therefore there is no dependency on the spot market. Similar thing we are also targeting for our electrolyte business, where we are not impacted by the spot market, because spot market is very volatile, therefore it's very difficult to do a business that way.

In the interim, till all these comes into place, we may have to sell for few quarters, or maybe in the future once everything develops, a certain percentage is spot market or and certain percentage is contracted, but currently the target is for everything to be under contracted basis.

This situation post FY29 only, right, given the demand that we have?

No, post FY Q4 current financial year, right? Because by the time we hit current financial year, already there is a demand for non-FEOC, therefore sales starting the current financial year Q4 should be under the contracted base.

Sir, if I extrapolate this, are you saying that the US customers that we have, they are okay to pay a little higher pricing to us compared to the China pricing just we are a what, a risk diversification or we are a backup supply to them? How these things in the pricing work?

What we would like to say that not higher price, but basically a fair price, which is a consistent, reliable price, right? For example, China prices sometimes are sometimes very low and sometimes extraordinarily high, whereas here they will have a very predictable price which is only linked to lithium, and the conversion margins are also more predictable.

That is what basically they get, and yeah, we had seen a period of 4 or 5 years when we entered the contract where overall actually they were making more money over a 3-year, 4-year period with a contracted price rather than follow very low spot price and then sometimes exceptionally high prices in case of a shortage. I think that is the basic logic.

In addition to like you said, this China risk-free and a second backup supply, there's also a policy guideline in the US where it's called 45X tax credits. To get this tax credits, a certain value addition or certain percentage of the supply has to be free from supply from foreign entities of concern.

In such a case, they need to have a non-China kind of a source. It's also for if they want to achieve the benefit they want from the subsidy which they're going to get from the government.

It's a precondition for that, in addition to the backup and supply security.

Sir, thanks for taking my question again. Sir, just wanted to know, you did mention that organolithium did hit peak capacity utilization in Q1.

I just wanted to know, is there any seasonality attached to this? I understand that probably the inorganic chemicals piece, which is basically related to HVAC cooling, that must have seen some seasonality impact.

Now just wanted to know in terms of organolithium, what is the exact reason for this demand picking up so sharply, and do you see this demand being sustainable going ahead?

This is basically in last one year. If you remember, we took this business sometime mid of FY24, and I think when we took, the lithium prices suddenly decreased and there were some unstability around that.

Then afterwards in the next 2 years, we have worked to basically get ourselves approved in the international market. Then also when we took over this business from the previous company, they had only one major product and only three or four customers.

Now the customer base has been fairly diversified, therefore and after that we needed the additional capacity. Additional capacity came online one year ago, and then during the whole of last year, we gradually kept increasing, reaching the revised capacity by in current Q1.

It's something which we've been working on for 2 years. In fact, if you see, when we took over the one year before, whatever was the volume which was sold, now we are selling every month.

In 2 or 3 years, the demand what we've been able to generate with a diverse customer base is almost 12 times. This is some of the advantage of having a bigger customer base and bigger product base where we are with many customers.

Once we go through the approval cycle, we can ramp up new molecules in the same industry much faster. That's the main driver for that, and we still see stronger and stronger demand, more international approvals are coming, to keep up with that, we are adding more capacity.

Sure.

Sir, just follow-up to that, end-user industry-wise, sir, which is the biggest segment for organolithium? Will it be pharma?

Today pharma is the bigger segment. There is also use in agro, which is ramping up.

There is also use in semiconductor, where we have just got an approval and we are expecting more volumes. Then there are some other very specialty polymer-type applications also where this is used.

It's a again multi-industry applications. For us right now pharma is the biggest driver, but pharma and semiconductor honestly are the two biggest drivers here.

Agro is just picking up, and we are also working in other industries where we are expecting approvals soon.

Sure. Thanks a lot for that, sir.

Thank you so much.

Thank you, everyone, for your time, insightful questions, and continued interest in Neogen Chemicals. Should you have any further questions or require additional details, please feel free to reach out to our investor relation team.

We look forward to interacting with you again next quarter. Have a great day ahead.

Thank you again.