Congratulations on a good quarter. First one, just on the battery chemicals business. Are there any revenues that we have recognized this quarter? If so, if you could please quantify those? And for the balance of this year now, what sort of revenue number can we work with for that side of the business?

So as mentioned during commentary by our CMD Naresh Patel, the validation from new plant has already been successfully completed, and that means that we have started the supply from that plant. Now going forward, quarter-on-quarter from second, third, fourth quarter onwards, it will keep on ramping up the production. I'm afraid I will not be able to share the a particular number to it, but we are very confident that we will grow very fast in those 2 business because, as you know, we have already supply contract in place from our customer, and it will ramp up very fast going forward.

Okay. Got it. And on the semiconductor side, the Indichem plant construction, if you could please just help us with a status update on that plant in Korea. What's the time line over there?

So this plant, we are happy to share that this is getting constructed even before the schedules and expected to get -- capex is expected to get completed by end of this quarter. And maybe from next financial year onwards, we will have the revenue coming up from that plant.

Okay. Got it. And just the last one from my side. On the Pharma Intermediates piece, is it possible to just split out the growth rates between CDMO and the base Advanced Intermediates business? And also possible to just split the margin between Pharma Intermediates and Specialty Chemicals?

So again, as we mentioned earlier, that we are not giving any split between the CDMO and non- CDMO in Pharma Intermediates space, we have already guided about the growth in the Pharma Intermediates side. So I'm afraid I will not be able to share those numbers on that side. But yes, on the margin side for those 2 segments, Bhavin bhai will update on this.

So with regard to margin, our Spec Chem business is having around 24% margin and Pharma business is having around 36% margin.

Next question is from Rikin Shah from Boring Asset Management.

Just adding on to the question for Indichem. So once the plant commissions, what would be your typical time line in terms of trials, vendor cycle approval and ramp up? Basically, are we expecting any sort of delay or time to be dedicated for this?

So as you know, this is a newly constructed plant. The R&D facility has already commissioned there, and we have started product development from the R&D side. So I think this will reduce our time lines to commercialize the product. But obviously, because it's a new product, we are not committing any time line as of now. But what -- as I said, we are expecting this to get into a good commercial business from next financial year onwards.

Okay. Got it. And in terms of the type of products that we manufacture in Indichem, what is something that we are going to be doing here apart from photoresist chemicals that we do for BFC? Or are we going to be targeting a similar line of products here?

So there are -- of course, there are photoresist chemicals, what we would be doing, but there are multiple projects we are working on Indichem R&D as of now, but I'm afraid I will not be able to share details about those things as of now.

Sure. In our electrolyte subsidiary, we have sort of had a dilution and given 10% stake to ARZ. Can you explain the sort of rationale here? And what are we thinking, broader term, for this?

So this is basically we awarding our business partner, their equity share, which was decided earlier only. This is the one -- the partner is one who actually has been there with us since the starting of this business, when we started with the product development and then the marketing of all those. So he is the one who will be -- who has been responsible for the whole business development as well as the future business development and the sales for all our electrolyte additive products and against which we have given them the equity share in that business.

The next question is from Nilesh Ghuge from HDFC Securities.

Congratulations on a good set of numbers. First question to Bhavin. Bhavin, if you look at the employee cost, it is continuously going up. So what number we should take for our, let's say, FY '28 as far as the employee cost is concerned?

So employee cost, if you see typically, so this quarter, we have rolled out our annual increments and there is -- there are performance bonuses also given. So there are onetime performance bonus for the current year is also there in this year. We should typically look at around INR150 crores of employee cost for the current year.

Okay. And second question to Abhishek. Abhishek, last quarter you mentioned that the Phase 2 will be commissioned in FY '27 -- Q1 FY '27 in the electrolyte business. So what is the current status of that?

So for the Phase 2 of this -- Phase 2, which is for the third product of our Electrolyte Additives segment, which is going on schedule. And as we mentioned earlier also by end of Q2 FY '27, we would be completing our capex. So that looks very well on track, and we are expecting the trial runs to commission very soon.

And I think for this product 3 you're talking about, for that also, there has been already a tie-up with the customer, similar to for our...

We have a signed contract in place.

Okay. So ramp-up will be very fast. I mean in FY '28, we will see ramp-up from -- not only from first 2 products, but the third one also? Is my understanding correct?

Next question is from Akshay from AK Investment.

First of all, congratulations on the great set of numbers. Sir, how do we look at the EBITDA margin for the current financial year?

For current financial year, for the full year, as we guided during the commentary also, we are expecting a similar kind of margin as we had for full year FY '26.

Okay sir. My questions have been answered. Thank you so much and all the best.

Thank you. The next question is from Vikas Angude from Paras Asset Management. Please go ahead. We seem to have lost the line for Vikas. We'll take the next question. The next question is from Jason Soans from IDBI Capital.

Sir, first question, just I just wanted to know, I mean, we have had a good profit growth trajectory after Q4, even Q1 has been good. But you did allude to some caution regarding to the Middle East crisis and in terms of raw material supply and stuff like that. So just wanted to know our profit growth trajectory, 25% revenue growth. Do you see any moderation going ahead with our CDMO in other growth areas? Or are they still on track to post good growth? Or do you see some moderation or some optimism tempered going ahead into '27 for the whole year?

We are still very much confident to deliver 25% growth rate for the revenue as confirmed by the CMD also. And for the margin side also, again, I want to reaffirm that we are confident to achieve similar margins as compared to last financial year.

Sure, sir. And sir, for this year, what is the capex estimated for '27 and '28? If you could give me, kind of, breakup also, if possible for '27 and '28, what kind of capex are we looking at?

For FY '27, capex is largely the spillover capex of electrolyte additives as well as the pilot plant capex, which is around INR50 crores and around INR40 to INR45 crores of maintenance capex, that is what the already planned capex for this year. Over and above, as I mentioned during my commentary that we are going to have R&D capex also and the land acquisition for our future expansion for our Pharma business or any other business. But for those 2 projects, we are yet to announce that capex. We will announce it at a relevant time when the full capex plan is in place.

Okay. Sure, sir. Sir, this land acquisition still would be for what exactly? I mean, I know we are still firming up the plans, but what exactly would the purpose of this land acquisition be?

For our Pharma Intermediate business, Sachin plant is already hitting the capacity utilization roof. And the Ankleshwar plant is expected to get filled up in 3 years' time, maybe by FY '28. So we should be ready with some land parcel, which -- where we can have a new plant for our future capacity need, as well as the newer project for our chemical business. That's the reason. We don't have any much larger piece of land. That's why we are seeking some additional land parcel.

Okay. Okay, sure. And sir, also when you mentioned that you are phasing out the commodity chemicals and basically replacing with high-margin chemicals, that is basically only for the Spec

Chem business or I believe in the Pharma Intermediates piece in the other piece, in the core product side also, you're doing the same strategy. Could you just give some color on that?

If you go through our commentary last year, we have already done with the similar exercise for our Pharma Intermediates business last financial year FY '26. And now for this year, FY '27, we are doing some of the restructuring in our old commodity chemical portfolio. So that Pharma Intermediates is already done in last financial year.

Okay. So Pharma Intermediates, that rationalization is over. Now it moves to the Spec Chem side of the business. So that will also basically drive margins improve margins ahead, improve margins going ahead. Okay that’s all from my side. Thank You!

The next question is from Abhigyan Srivastav from Marcellus Investment Managers.

Congratulations on the great set of results. Sir, there's a dip in other income this quarter, from around INR11 crores in the previous quarter to around INR1.8 crores in this quarter. Is there a particular reason for that?

So Abhigyan, in previous quarter, it was largely driven by positive exchange fluctuation rate available with regard to euro. So in current quarter, we have only positive fluctuation of INR10 lakhs as compared to INR10 crores in the previous quarter.

The next question is from Juhi Kumari from Narnolia Financial Services.

Congratulations on good set of numbers. I had -- my first question is, other expenses like for this quarter has been in line with the previous quarters or has been moderated. So what would you give as a guidance for the rest of the FY '27 other expenses line?

So with regard to other expense, it is in line with the previous quarters. We have seen some savings due to our solar project. We have also seen operational efficiencies. So whatever the expense for the quarter, we are looking the similar kind of expense for the rest of the year.

And next question from my side would be regarding the EBITDA margin, which has expanded sharply to 34.3% in this quarter. So you have given guidance for 25% margins for FY '27. So do we expect to exceed this margin with this kind of run rate in the first quarter?

The 25% figure is coming from our guidance related to revenue growth. And for the margin, we have guided that it will be in a similar line, which was for full year FY '26. So that will be reflected maybe around a similar line in FY '27 as well.

The next question is from Archit Joshi from Nuvama Institutional Equities.

Sir, I have 2 questions, slightly more strategic. Firstly, we've seen quite a few plants of the electrolyte salts, electrolytes, cathodes coming in recently. And given that we have made some inroads starting with the additives, have you given it a thought that there are export opportunities available that we should maybe go a bit more into the value chain to start up with salts, electrolytes. What are your thoughts on that, if you can help us with that?

No, no, we do not have any plan for those -- business related to either electrolyte solution or the LiPF. We are sticking to the electrolyte additive segment only. That is our core strength. We want to stick to our strength only. We don't just want to get into other people's shoes.

Understood. Understood. Sir, secondly, you've known the developments and solid growth that we are doing in CDMO. Sir, if you can explain what are the things that we are doing to get some of these larger available APIs from a business development perspective or development of chemistries? And if there is anything in the pipeline or anything that we are exploring to sustain the growth momentum, even though we have right now for the forthcoming quarters and maybe a few more years. But how would that CDMO journey be if I have to make a, let's say, 5- to 7-year assessment of how our growth trajectory will be?

So we will not be able to share any particular details about any particular projects or CDMO business. But what we can assure is we are doing a lot of work related to newer projects. There is a healthy pipeline of products for R&D, and there are various stage of R&D as well as the validation and some of the projects already we have mentioned that a few projects have already validated and there are many more to come. So there's the kind of normal day-in, day-out job for both our business development as well as the R&D team. And what I can assure you is that we have a very good healthy pipeline for the product in the CDMO space. But due to confidentiality nature of those businesses with the customer, we -- under those agreements, we will not be able to share that particular detail about that business.

No, no, of course, sir, I was not meaning to go into the confidentiality sort of things. Not the exact details, but just to get a sense of maybe, let's say, what kind of therapeutic areas we are looking at or any particular or a few chemistries that we target where we have some leverage or rather how are we getting the inquiries from the customers? A qualitative aspect of that will also be very helpful to understand. That would be my last question?

Let me give you -- let me address your question other way around. Let's say, we have already guided the market that we would be hitting INR1,000 crores revenue from our CDMO business. That is based on our confidence and looking at our upcoming product pipeline for our CDMO business. And we are very much confident to not only achieve this target. And in fact, we are confident to beat this target. So that is what I can at least give you assurance on this business side.

Sure, sir. I was actually -- while we know that given that the molecule itself is a very high growth engine, I was slightly speaking something beyond that, the other pipeline, if you could qualitatively help us, on those accounts, not the one that we already know of which you have very well guided in the past?

So that, when we see the CDMO business, it's not only that particular product. It's a mix of products along -- obviously, that product is an anchor product, but there are other CDMO products based on which we are -- consolidated revenue for CDMO, that is what we are guiding.

The next question is from Shreya Banthia from Oaklane Capital Management.

Congratulations for the great set of numbers. I wanted to understand from the standpoint of darolutamide. So since there are new indications that are being currently under trial, which according to the report suggests that it will double the addressable patient pool. So does it also double the revenue opportunity for NUBEQA? That would be my first question -- any indicator from the innovator?

So it will be difficult for us to comment on our customers' pipeline and the research indication, research work. But what I can reassure that we are confident on our business. And as I said, we are confident on our -- whatever the guidance we have given for our CDMO business.

Understood, sir. Sir, just if I can ask related to this, Bayer has improved their revenue target to - - which would be somewhere around EUR 5 billion. So does it include these -- Any sense on that, sir?

As I mentioned, see, we are guided by customers' purchase order for the year as well as the revenue expectation they will give. We are not guided by the market expectation or whatever the buyer would have propagated in the market.

Next question is from Rohit Nagraj from 360 ONE Capital.

Congrats on a strong set of numbers. First one on the battery chemicals front. So you said that we have contracted out the capacities. In terms of customers, is it a single customer or multiple customers and which geographies are we going to cater to?

So it's not driven by single customer. There are multiple customers. We have time to time shared that we have a number of customers already in place for both VC and FEC. And they are geography -- in terms of geography, they are based in North America also, they are based in Korea also and other part of the world.

Sure. And if we are commissioning -- I mean, we have commissioned the plant now and the ramp-up will happen subsequently in the next few quarters. Can we expect that we will hit the peak revenue potential by, say, FY '29?

Yes. We have already guided that it's in 3 years' time, it should hit our full capacity utilization, and we are more than confident to achieve that target.

And we are now looking at the third product commercialization. Beyond that, how many -- are there any more products which are in pipeline? And as and when we find the commercial viability, what could be the gestation period to commercialize or put up the capex and commission the project?

So after this third product, product has already been developed and now we are in the final stage of signing a long-term supply contract with the customer. Once that gets completed, based on the customer quantity requirement, we will plan and announce the capex for the fourth product. Apart from that, we have many other products which are already developed by our R&D and which are in the stage of business development. And once those product gets done with the business development part, we will announce those thing and the capex related to that. So we have versatile large pool of basket in the product pipeline so that it will keep on growing our electrolyte additive business in future also apart from first 2 products.

Right. And second question is on the semicon side. So here too, for the initial set of capex and products that we are targeting, are we completely sold out and the same trajectory would replicate here that within a period of, say, 3 years after commercialization, we'll hit the peak run rate?

As of now, as I mentioned, product development and business development work has already started with the commissioning of the R&D facility. It will be a slow start because it's a new business, but maybe in 3 to 4 years' time, we should be able to fill up our full capacity at Indichem.

The next question is from Krishna Yoga from Family Fund.

So my question is very specific on the molecules. I know you don't want to reveal such specific molecules. It's related to Johnson & Johnson and CAPLYTA. In previous calls, you mentioned about it. So what is the status on that particular molecule?

Sorry, your voice is a little not clear. Can you come again?

Am I clear now?

Yes. A little.

Sir, actually, my question is specifically on the product. Of course, I don't want to mention the name also. The molecule, which is from Johnson & Johnson and CAPLYTA, in the previous calls, you mentioned about it. So what is the status on that particular molecule as of now?

So I'm giving the answer for that. That product, we don't deal with the Johnson & Johnson. We have a generic...

Yes, other key partners.

Yes. So that we already qualified with them. DMF is already filed and now we are waiting for the launching of the same product.

Yes. That product has already started picking up for us, and we have a sufficient capacity to cater that demand for that product.

Okay. So another question, what is the status of the capacity utilization of the all 3 plants?

Okay. For the capacity utilization for the Sachin unit, the capacity is 83%. For Unit 2 at Ankleshwar, it is 23% and at Unit 3 Jhagadia, 55% for the quarter.

The next question is from CA Nupur Kokta from NIPL. Please go ahead.

Sir thank you for the opportunity. My first question is like we had four validated CDMO products, which were expected to start contributing to revenue this year. Could you share the specific time lines and commercial ramp-up curve for these products? And also additionally, like we have a CDMO revenue target of INR1,000 crores maybe by FY '28. So what percentage of this target is backed currently? Like do we have offtake contracts or long-term supply agreements or any pipeline opportunities for these CDMO products?

For these products, we have already mentioned that these are already validated products. And with regulatory approval in place, we are expecting revenue to kick in from H2 FY '27 onwards. And on a revenue potential side, these all products are expected to generate revenue between INR50 crores to INR100 crores for each year at a peak.

Okay. My second question is, when do we expect our commercial revenue recognition to begin from the electrolyte additive capacity that we inaugurated this year?

We have -- the revenue has already started. As we mentioned, we have done with the validation batches -- sorry, trial batches from that plant.

Okay. So like trial revenues are done and the products are to be commercialized very soon. So commercial revenue would begin soon, right?

Yes.

The next question is from Rikin Shah from Boring Asset Management.

It's perhaps adding on to an earlier participant's question on expanding our sort of pipeline, which I think you have answered. But if I can perhaps add on to that part, maybe you can help us understand what is Acutaas today doing in terms of targeting new modalities, therapies, R&D with the new pilot plant at Sachin that you will be happy with the CDMO sort of pipeline expanding in a very meaningful manner over the next 2 to 3 years so that we are not prone to an anchor product in the CDMO basket?

Okay. I'll let Naresh bhai come in to answer this question.

Thank you, Abhishek. Thank you, Rikin bhai. So basically, Acutaas is highly focused on different segment and this clinical research molecule and CDMO segment is also vital for us. And we are continuously getting a lot of traction. Our BD team is doing excellent job. And in

our core chemistry strength, we are getting a lot of inquiries, and we have converted this inquiry into the commercial samples as well. So it's not a one way or it is not a stop kind of thing, but it's a continuous process. So annually, we are developing around 30, 40 molecules and submitting to the different customer at a different level of investigation or I can say the innovation. So it is continuous. And out of that, some are moved to the second phase, third phase, fourth phase like that way. So it is a continuous process for us. And we are adding molecule every year, 30, 40 molecules in this basket. Are you there, Rikin?

We've lost the line for Rikin. We'll take the next question. The next question is from Jason Soans from IDBI Capital.

Sir, just -- I mean, in terms of battery chemicals, I just wanted to know, I understand that you have long-term contracts for VC, FEC. So just -- I mean, I understand the revenue and all you're not -- but probably some ballpark or something you would like to share for 2 to 3 years, how -- just it will give us an idea of how it can scale up because battery chemicals is quite in a growth phase right now, right, and it's really doing well. So just if you could give us a ballpark number or something just to get an idea of how this business will shape up going ahead?

So for Battery chemical business, what I can say is we have already plant in place for the manufacturing. And this business, let me assure that this business is not constrained by the demand in the market. There is a huge demand available. It is constrained by our plant capacity. So you know that the plant, we have a capacity of 2,000 metric tons for VC and 2,000 metric tons for FEC. So it's a total 4,000 metric ton capacity and for which we are more than confident that we will be able to hit the full capacity utilization by end of 3 years. So that's a kind of ramp- up. And how the pricing are there in the market. So you can easily calculate the revenue potential at least from these 2 products only. And apart from that, we have a third product already signed with the customer, and the fourth product is in the pipeline and there are many more to come, but this is how you can work out the ramp-up in this business.

Okay. Sure, sir. And sir, one question, I just wanted to know, I mean, of course, I know early days in Indichem. But sir, just wanted to know, I mean, in terms of margin profile in the Indichem product, will it be similar to our -- the API business or it will sit somewhere between the Specialty Chemicals and API business? Just some color on that?

For the margin profile of Indichem business, I think you should not look at the API -- Pharma Intermediate business margin, but you should benchmark it with our BFC product or the business margin. It is very preliminary to give any number on this, but because it is a similar kind of -- even better product portfolio than what we are used to manufacture at BFC.

Sure. So any ballpark, sir, would you want to give on that on a steady-state basis, what will it be?

It is still premature as of now to give any number on this.

The next question is from Manav Kapasi from Antique.

Am I audible?

Yes.

Congratulations on a good set of numbers. Sir, my question was more on a broader view, given that our battery chemical efforts will soon bear fruit and also the Indichem plant will start contributing to revenues maybe next year or FY '29. Where do you see our overall revenue mix going from the FY'26? Do we see the Spec Chem business contributing a little more as compared to now? Or do we still anchor on the Pharma Intermediates business in the next 3 to 5 years?

That's a good question. So as you know, last financial year, our total revenue from Pharma Intermediate business were 87% of the total revenue and 13% was the Spec Chem business. And from here onwards, because of these 2 growth engines related to electrolyte additive and the semiconductor business, it will grow very fast. But you also know that the CDMO business is also at this base revenue, it is growing -- expected to grow faster -- even faster. But net-net, we can expect that this revenue composition should come down to around maybe 80% from 87% in next 3 years' time.

Got it. Sir, that is helpful. Additionally, sir, given that we are phasing out the commodity grade chemicals in the Spec Chem business and the new products which will come up from Indichem as well as the battery chemicals, which will have better margins. Do you see Spec Chem margins moving up, which will also, in turn, give us a push on our overall consol margin. So question being where do we see margins, let's say, 3 to 5 years down the line, do we see them meaningfully improving from my FY '26 number?

You know that margin -- overall margin of the company is a function of the product mix. As I mentioned, CDMO business contribution is increasing in the overall pie of the business in the Pharma Intermediates business. But similarly, meanwhile, battery business is also going to fire from this year onwards and which has a lower margin as compared to the Pharma Intermediates or CDMO business. So that's the reason we are -- net-net, we are targeting that the overall EBITDA margin should be similar as compared to what it was last year, even at a higher revenue base also.

Got it. But from a more 5-year perspective, do we see it meaningfully improving considering that all of our commodity grades would have been phased out even in the Pharma business, even in the Spec Chem business. 4, 5 years out, do we see margins at similar levels? Or would there be a 200, 300 bps improvement from these levels?

So as of now, I will not be able to guide you related to 5 years margin. But as I mentioned, it will be a function of the product mix between Pharma Intermediate, which is particularly CDMO as well as the newer business like battery and semiconductor. So obviously, it will depend on how fast the ramping up happens with respect to battery as well as the -- sorry, semiconductor business.

The next question is from Tirumala Reddy who's an Individual Investor. Please go ahead.

Am I audible?

Yes.

So my question is around the CDMO business, Pharma Intermediates. So with respect to the concentration risk, so I think currently, majority of the business is coming from very few molecules now. So going forward, how are we going to address this molecule risk or customer risk?

So as Naresh bhai already mentioned, we have -- we are working on multiple projects. And every year, there are a number of projects are coming in the R&D pipeline. And slowly, slowly, it will derisk our revenue concentration for the single product also. You know that by nature, we have been -- always been a very diversified company, both in terms of product as well as the customer. And because of the very fast ramp-up in this particular product, the revenue concentration moved towards that product. But obviously, it will get diluted over the years once the new CDMO and other products keep on adding to the basket.

Yes. So -- and my next question is about forward integration. So as we are very well placed on Advanced Intermediates. Is there any plan to move forward to APIs? Or are there any queries from customers for asking API development and manufacturing as well?

Yes, we received so many inquiries or requests from the customer. But as we mentioned multiple times in early discussions as well, we do not have any plan move to the upward in the value chain. We do not compete our customer. That's our policy, and we would like to stick to it.

We'll take that as the last question. I would now like to hand the conference over to the management team for closing comments.

Thank you, Nuvama team for hosting our conference call. We appreciate everyone's questions and hope we have addressed most of your queries. If we missed any of your questions, please reach out to our Investor Relations team, and we will get back to you promptly. Once again, thank you very much, and happy weekend to all of you.

Thank you very much. On behalf of Nuvama Institutional Equities, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.