Thank you, sir. The first question comes from the line of Sanjesh Jain with ICICI Securities. Please go ahead.

Yes. Good morning. Thanks for taking my questions. I have a few of them. First on the pharma, food, and nutrition. The 30% solid growth, how much of it was led by pricing and how much it was volume? That's number one. Number two, you did mention about strong off-take in bisglycinate. What is -- now that we have already start seeing early off -take, what is the visibility for this entire year on the bisglycinate portfolio?

Number three, have we fully commercialized the new plant which we were putting up in the new greenfield location in Navsari? So, these are on the food pharma, food, and nutrition. I will take the specialty post this.

Good morning, Sanjesh-ji.

Good morning, Shanil.

Thank you for the questions. The first question regarding the growth in pharma, food, nutrition. So, predominantly, the growth was volume-driven. I would say approximately around 3% of the growth comes from not necessarily price increase, but just currency change. Predominantly price increase, which we have passed through, will get reflected in Q2. So, there is not much of that price pricing today. Majority of that is to do with volume on the back of phosphates, which we have been able to scale significantly with our largest customer.

Got it.

The second question regarding the bisglycinate portfolio. So, we as I mentioned in my previous call as well, or the last call, we are currently seeing or we have received two very important approvals from two large -- two very large customers in the North American market. Currently, we are scaling up our supplies to them. We are behind schedule in terms of delivery. As I mentioned we had to -- so, we -- I think, we believe that the year, we will see we will see significant growth coming from the bisglycinate portfolio, maybe not in the current financial year, but we believe in the next 2 or 3 years, it will become -- maybe it will probably be the top two or three revenue-contributing products for the pharma, food, nutrition category.

Got it.

And the third question regarding the greenfield. So, the greenfield facility is currently undergoing regulatory approvals. We are -- the facility has already been approved to supply into the food and nutrition category, and is currently under also undergoing FDA approval, which we expect in this quarter itself. And we have also received five customers of – five, food nutra customers are also currently approving the facility, three of which are from India, and two are global MNCs that are currently approving the site. We expect that approval to come in this quarter as well, and for supplies to start from this facility in Q3.

Very clear. Thanks, Shanil ji. Second on the specialty, one, margin at 26% purely operating leverage? Why it fell steeply? That's number one. Number two, how is our -- so sorry, what was the impact of the non-availability of LPG in this specialty segment?

So, on specialty, there are two as you rightly mentioned, let's say for half of the quarter, we were operating sub-50% utilization level, or in terms of the demand that we have, and the overheads were -- the overall operational inefficiency led to some margin dip. However, and as I

mentioned, I would say the specialty number that you see is inclusive of NSS. The business without NSS still was in the mid-30s in terms of margin profile. NSS has had a tough, challenging quarter, and that has kind of dragged down the profitability to the 26% level. But we expect specialty to kind of bound --- at least our core specialty to bounce back in the in the current quarter.

Got it. On the on the TAM side, now we are talking of 200,000 metric ton. This we are talking by 2030, or we'll now scaling up this capacity from 25,000 metric ton in Phase 1 to 2 lakh metric ton by end of 2030, is that what we are planning, or…?

I would say, Sanjay ji, the scale up from 100,000 to 200,000 ton is something that we are very actively currently evaluating. As I mentioned, we are working with two very large customers from for binding off -take, which we expect to conclude this year or l ater this year. As soon as we have signed those agreements, we would we will time the scale up from 100 to 200 KTPA. So, I would say in the next two quarters, we will have a lot more visibility. Current planning is not FY30, but in terms of between calenda r year '30 and '31, we would be able to the current target is to be at 200 KTPA.

Got it. One last question here from my side before I join the queue. Is the land which we are developing in Dahej, how much capacity can it take from the setting up perspective?

So, the current site in Dahej can support our 200 KTPA scale-up.

And that's where we will exhaust that land. Then then if we want to scale up, we will need more land availability?

That is correct. Beyond 200 KTPA, we will we will have to have a new location.

Very clear. Thanks, Shanil ji, for answering all these questions and best of luck for the coming quarter.

Thank you.

Thank you. The next question comes from the line of Nirali Shah with Ashika Investment Managers. Please go ahead.

Yes, thanks for the opportunity. I had three questions. So, firstly on PFN. So, like you mentioned, PFN has grown 30% this quarter, and this is, of course, significantly ahead of the full year guidance. Should we view this growth rate as sustainable over the coming quarters, or will this only inched approach towards, say, mid-30s?

So, good morning, Ashika. I think it's a valid question.

Nirali. Sorry. My apologies. I can't see the screen. Nirali, thank you. So, I would say the growth in PFN today from our current capacity which is probably with a maybe couple of percent is what we can extract further in terms of sweating the asset, but beyond that, we will have to wait for the greenfield to be commissioned in Q3 to kind of to kind of have that additional alpha in growth.

Okay, so I'm asking from a full-year perspective, say FY’27 and then FY’28. So, once we have commercialized a greenfield in Q3, then the second -- so only last quarter will be the one that will see the impact of and then in FY’28.

Yes, so I think I would I would say the growth in terms of the what we've had in the quarter is something that we believe will be sustainable at scale, given once we have the kind of the full traction or the availability of the capacity from the greenfield. So, more importantly, FY’28, the pharma, food, nutrition should be able to kind of sustain this level of growth.

Okay, understood. Secondly, on the specialty ingredients, Europe has, I guess, remained a little bit softer and do you see that this is a temporary demand issue or some customer ordering patterns have structurally changed in the region, if you can give some color on that?

So, Nirali, I think Europe actually has been a key growth contributor for us this quarter for our core specialty business. So, I mentioned that we've the investment we've done in the sales team over the last couple of years that is now starting to yield the results that we had anticipated. NSS, the company that we acquired, specifically is having a challenging environment because of the certain customers that they operate on and require a lot more energy. But for our core business, Europe I think grew significantly for us this quarter and we expect our core business to continue to grow in Europe.

Okay, understood. And third ly on the battery material side, how does the qualification funnel look as of now?

So, I think from where we were last quarter, we were at -- we gone through approvals with six customers. Today, we received one or two more approvals in the current quarter or in Q1, so we are now qualified with eight. I would say now, more than the number of approvals, it's about how do we kind of mature and take these approvals forward and convert those into binding, because even at 25 KTPA or even at 100 KTPA, the capacity would not be sufficient to serve beyond seven, eight customers. And all the customers that we have gone through approval with are all existing large Korean companies, American companies who have existing capacity.

Understood. Can I squeeze one more, if you may?

Sure.

I would say for battery at scale and greenfield at scale, I would say closer to between 2.7 x and closer to 3x is where we would be the asset turns would sit.

That's it. Thank you so much.

Thank you.

Thank you. The next question comes from the line of Viraj Shah with PGIM. Please go ahead.

Hi, thank you for the opportunity. I just have one question. So, for NSS, you mentioned that there was some customer issues because of which the company's facing problems. Can you elaborate or explain on the nature of customer issues, whether this is temporary in nature and how are we looking to resolve this? And you also mentioned about the NSS margins, if you could please repeat on that, that how are you planning to bring that to the core specialty levels?

Yes, sure, Viraj. Actually, great question. On NSS, what so -- let's say NSS predominantly operates in the dairy space and the infant nutrition space, both of which require a lot of energy in terms of the manufacturing process. They basically were working with the largest infant formula company who had a plant in Europe. Due to the current energy crisis, that customer has scaled down operation significantly in Ireland, which is kind of -- while we have POs, they've delayed the buying. I would say FY’27 continues to -- they may have a more like a flattish year with, I would say, maybe single-digit growth. What we're doing from an intervention perspective is the new sales head that we brought on board, he's expanding the business of NSS outside of Ireland, taking it to a lot more developed markets, diversifying the end market also, where we are seeing very good opportunities. And to make to make NSS more resilient or operationally more resilient, we have basically focused entirely on make supplementing the current supply chain using the Sudeep resources in India to kind of supply majority of the products, making it more competitive. So, as I said, we are -- I would say, maybe if I talk about FY’28, where we expect some of these projects to materialize, if once the revenue starts to grow and the operational overheads don't kind of pull down the business, the business has the potential to kind of start tracking similar margins to what our Indian specialty ingredient business is currently doing. I hope that helps answer the question.

Yes, definitely. That's very helpful. Thank you so much. Just a follow-up question on this, if you could help me with what's your growth guidance for specialty ingredients for the year and how much share is NSS as of now?

Yes, so NSS is not significant in our current revenue in specialty ingredients. While we don't give out specific guidance, I think if you look at my -- if you look at how specialty ingredients has grown over the last couple of years, that kind of growth momentum is something that we believe is sustainable for ‘27 and also ‘28.

Understood. Okay, great. Thank you so much. That's all. That's it from my side.

Thank you.

Thank you. The next question comes from the line of Tarun Krishna with iThoughtPMS. Please go ahead.

Hi, thank you for the opportunity. My question is on the PFN segment. So, if you could give me the split between the revenue from product sold as pharma excipients and nutraceutical active ingredient?

So, Tarun, it's a good question. Unfortunately, hard to give you a specific split because a lot of end customers buy the product, they use it also as an excipient and then they also use it as an active in their OTC. To give you an example, you look at Torrent Pharma, for example, they buy ingredients from Sudeep as an excipient but then it also goes into Shelcal, so which would become a nutra active. So, we supply them a particular grade, not necessarily knowing the exact split of how they're using it in their end product.

Okay, understood. And the next one on if you could talk about the relationship between cellulose-based excipients and nutrient -based excipients and do you see a case where these cellulose guys will come up with a product which will not require nutrient-based excipients? So, do you see this as a possibility?

So, Tarun, again, I would say, all these excipients, whether it's calcium phosphate, what we produce or the cellulose-based MCC, they've both coexisted for a very, very long time, right? Maybe over a decade. There are certain APIs which are not compatible with MCC, but are only compatible with, say, calcium phosphate or lactose and vice-versa. So, I would say there will always remain a market where various excipients will coexist due to the compatibility with different APIs, depending on moisture levels, pH, all of those things from a stability perspective.

Okay, got it. And just one more. So, in the last con-call, you mentioned about HPMC and PVP. So, in what stage is it now, when can we see it getting commercialized and how would the realizations be different from a base PFN segment?

So, again, those products are something that we are currently, of course, developing and also commercially kind of evaluating with specific customers. We do we do not expect those to be commercialized in the current financial year. Our current focus is to kind of scale the greenfield and to scale the bisglycinate portfolio and then the other excipients would be something that we will take up as Phase 2.

So, I would say if you track -- if you've been tracking China, price of iron phosphate has increased significantly. I would say, it's gone up maybe 50 %-60% on the back of, of course, phosphoric acid but also the short supply of the iron source. I think it's more to do with technology than really integration and I think the technology that we have and that we are scaling will give us a lot of operational competitiveness at scale.

Okay. If any in dollar terms, you could give any realizations, like how much would it cost them to make it? Will it be more than $2 or less than $2?

In terms of the cost to make iron phosphate?

Yes.

For someone who's integrated . As I mentioned, Tarun, it really depends on the technology. If you're certain technologies may require you to make it at much higher cost, so it really depends on what technology you're using. It's hard to generalize.

Okay, understood. Thank you very much and all the best.

Thank you. The next question comes from the line of Jay Shah with Genuity Capital. Please go ahead.

Congrats to you and entire set of team for a good set of numbers, given the tough environment that businesses are operating in. I just had a question on bisglycinate. Basically, we had two major customers in the US. So, the numbers that you said it has surpassed the FY’ 26 number, obviously because it's a small number, is it primary from the two customers that we had on boarded or there are other customers also who have started approaching us?

Yes, hi, good morning, Jay. So, I would say it's a combination of both. Sales to existing customers who had approved the product plus expanding the customer base. Of course, North America continues to be the largest market from an opportunity standpoint but we are now also kind of tracking this product in other markets, including India, where we are receiving approvals. So, it would be a collection of both.

Okay. And the second thing is, you'd said when we met at one of the conferences, you'd said that Q2 would show a large amount of cost pass -through for phosphates. So, has it been happening or has it already factored in in this 30% odd growth from 85% to 105% odd that we've done year-on-year in PFN? So, is it a lot of phosphate price pass-through in that making?

So, I think a lot of the pass -through has happened later in Q1, so I would say marginal benefit or kind of we would have received in Q1, but in Q2, majority of the sales would happen with the pass-through.

Okay. And sir, just one last question for you and the management team. If you can just broaden out three, four years out with Nandesari coming in and the SAM also, hopefully, we'll be shipping good volumes. If you have to name two, three sectors or rather, I would say, not sectors,

but even if two, three product lines specifically, which is what gives you confidence that the long-term growth target that we have of 25% 30% odd percent. What is it that you feel are the top three or five products/sectors or end customers are going to help you achieve that target, because what I see is from Nandesari, the new greenfield plus the Dahej plant of SAM, we have put in the pillars but how would we build on that and what gives you the confidence, if I have to take a three, four years view?

So, I think from a product standpoint our core, which is minerals, specifically calcium, magnesium, iron, these three and their derivatives, right? So, phosphates, carbonates, the bisglycinates, these will continue to have a very attractive opportunity from a TAM perspective because as we've also been diversifying, so, of course, the core excipient business is there, it may not grow at the growth rates that you mentioned, but from a nutrition application, we are very excited something that I actually didn't talk about, but which where we see a very large opportunity is the whole GLP-1 category, right? I mean, where more and more people globally are moving to weight management, they need protein and they need they need the level of nutrition. You can skip a meal, but you cannot so, we are seeing a lot of infant formula companies, even pharma companies, moving into what we call clinical medical nutrition, and all of that will require vitamins and minerals, so that's a large opportunity that we will be focused on outside of the existing category in infant nutrition, dietary supplement where we are building wallet share. In the specialty ingredients business, the encapsulated ingredients that I mentioned, which help extend shelf life is something that we are seeing the market size grow, because customers are shifting from the conventional raw ingredients to the specialty ingredients, so the market size is growing instead of us just taking market share. And then the premix business, while NSS is having a tough year this year, between our India and the European blending sites, I think infant n utra -- infant nutrition is a big area for us. We already have the customer approvals, we now need to expand those approvals. And then outside of both these verticals, of course, you have the battery. I mean, battery is where we see, it's like the North Star, we have, -- touchwood, we have very good approvals, very strong approvals in terms of the OEM, the battery, and the and the cathode suppliers. So, it's more on execution and our ability to scale.

Understood. So, very interesting insight actually on the n utra space. So, if I may just double - click on that, so, are you saying that infant or, I mean, whatever age bracket, but nutrition companies are basically trying now to make formulations even for adults or people who are basically targeting weight manageme nt programs, so that these formulations can be taken as pseudo-meals, which will spike up to the levels of nutrition that is needed, is that what is happening in the market?

Well, that's basic one of the development areas that we're seeing a lot. I mean, you have I would say clinical nutrition was always a category. People who were recovering from pancreatitis,

cancer, all of those who needed the right level of nutrition. But weight management is becoming a very big category or has already become a very big category in some markets, including the US, and we are seeing that trend kind of continue to other markets. And eventually, protein and nutrition is something that everyone will require. So, over the next couple of years, we see that becoming a very large opportunity for us to focus on as well.

Understood. Understood. That's all from my side. All the best for the future. Thank you.

Thank you.

Thank you. The next question comes from the line of Sachin Jain with Prahas Capital. Please go ahead.

Am I audible?

Yes, sir, you are audible. Please go ahead.

Yes, congratulations, team, for a great set of numbers. It is very great to know that you people are already evaluating on from 1 lakh to 2 lakh ton on battery material side. Just what can you qualitatively touch upon what gives you that confidence, considering the fact that one, Chinese pricing environment, so what kind of margins, if you can touch upon qualitatively, that what kind of margins you can make on this particular side of the business? And second, looking at what is happening on sodium side of the battery, what risk you see in a long run? And I'm aware of the fact that LFP significantly market share is very significant, but how do you see emerging technologies in battery, particularly on sodium side, what kind of impact it may have in a long run?

Yes, thanks, Sachin. So, to give you my quick answer because of being conscious of time, is first maybe I'll first answer the sodium question. So, while we are focused on LFP, and I, as an individual and as a business, we truly believe LFP will be the dominan t chemistry for the next 5-7 years because storage is just kind of at the cusp of scaling up. But from a risk perspective, I think what gives us comfort is even if sodium ion were to scale, it will also require iron phosphate as a precursor. So, for our product will find will find dual application. And from a margin standpoint, again, it's I would say too premature, too early to talk about margins today, but how we look at capital allocation is looking at how looking at asset turns and then the ROCE profile that we can generate for the business, and both will deliver very similar, you know, asset turn and ROCE to our current business. And that's how we looked at the opportunity and the capital allocation behind it.

But can you can you give some range probably in your mind because you as you're thinking of from 1 lakh to 2 lakh ton, I'm sure probably math looks very interesting. So, some qualitative comment on the range you are looking from margin perspective, any indication?

I mean qualitative would not be a range, right? I would have to then quantify the number, but as I said, it will -- the if your question is, will it deliver the margin that my current PFN category is

delivering? The answer on face value would be not, but as I said, it's a very attractive opportunity in terms of how the ROCE profile will actually develop in this category along with the asset turns. At 200 KTPA, the asset turn may even be north of that because we do not require an additional site. So, as I said, from an overall return metrics, it's a very attractive opportunity that we're targeting, and our technology gives us that operational competitiveness and, you know, comfort on how we can deliver certain margins for the business.

Understood. And my last question is, how do you see the utilization level of your 51,000 ton, the new facility -- greenfield facility in '28 and '29? I mean, what can you give some comment, can you give that?

So, again, Sachin, it really depends on the level of approval. As I said, we're currently approve -- regulatory point of view approved for the food n utra space, we're going through approvals. Pharma, of course, is important approval, we have to wait for that. '28, typically in our business, you see year one, year two as a ramp up, and then year three is when you really have that hockey stick kind of utilization levels being achieved. So, so that is how we expect more '27, '28 to play out. '28, let's say, would be we can look at maybe like a third utilization in '28 and then kind of ramping up from there.

Sure, sure. Thank you, and all the best.

Thank you.

Thank you. The next question comes from the line of Shreya Chatterjee with Ageless Capital. Please go ahead.

Thank you for taking my question. I actually have three questions. The first one is, you mentioned that there was a disruption in capacity in this quarter because of the LPG crisis, so what was the capacity utilization of your facility this quarter, and wi th the all the ongoing capacities coming ahead, what do you think capacities will be this year and the next? And also, you mentioned about your customer like pre -qualifications for your upcoming facilities, so five in pharma, food, and nutrition, eight, I think, in battery chemistry, so if you could a bit more colour into the kind of these customers and also the kind of products that you intend to supply to these customers.

Yes, thanks for the question s. So, as LPG there was short supply, largely April, we were at a third utilization of our, what we typically consume. Half of May, we were below 50%, so overall for the quarter, we were significantly underutilizing our capacity, which has now largely reversed, and we are back to normal operations in Q2. In terms of battery, you asked about the customer and the kind of products. I mean, the only product that we are currently scaling in battery is iron phosphate to support the LFP chemistry.

So, we will be, all the eight customers that we, that I've mentioned about, we are basically working to supply them iron phosphate for the LFP requirement.

And on the food pharma, food and nutrition side? What are the products or the customers that we are targeting for the upcoming facility?

So that is, let's say, 50% or basically a large part of the capacity is actually going into expansion of our existing capacity, which is the phosphate product, and then bringing newer products to market, which is the bisglycinate, the gluconate, the citrate products from the new site.

Got it. And would it be possible to give, like, revenue per ton for your top two, three products, like phosphate and calcium carbonate and glycinate, and also the EBITDA per ton, and, like, what would it be going forward, some metrics to that?

Shreya we typically do not share this information, especially in terms of EBITDA per ton, and even revenue, I would say again, it's one product that has multiple applications. A product going into infant formula is priced very differently to the product go ing into, a calcium tablet versus what it goes into pharma. It could be the same compound, but three different applications and three different price points, so, again, hard to generalize.

But a general trend to the revenue and EBITDA, maybe the EBITDA only, how does it evolve from here with all these specialty, like, product portfolio coming in?

So, I mentioned, I think if you see, we've been last year or so, maybe year and a half, we've been around the 35% EBITDA level. Historically, we before we kind of made the investment in building out the sales team and all, we were maybe tracking around 37% -38% EBITDA, and with the right level of utilization of the new greenfield and sales coming from both these markets, we're comfortably we can kind of achieve those levels.

Okay. Okay. So, it's majorly, as is, or slight improvement?

Yes.

Okay. And regarding your inventory days, it had taken a sharp jump in FY25, and maybe do we see the inventory days going back to those levels, or do we see the current inventory days continuing with all the capacity expansion?

So, it's a mix of both. In our core business the inventory days have started to kind of normalize as sales in Europe and U.S. pick up. At the same time, with the current geopolitical scenario, we are building up inventory of certain key raw materials because there's a significant delay in terms of logistics, so it's kind of offsetting the impact at the moment, plus there is a lot of inventory that is kind of currently also going and building into the battery materials business, which is also getting consolidated. So, if you kind of exclude that, then there will be our goal, as I mentioned in the last call, is also to kind of improve the working capital cycle. I had mentioned that the target was to come down to maybe 170-odd days, but this would be ex to everything that we're doing in battery.

So, the target working, like, steady-state working capital cycle is around 160 days-170 days, that you're targeting?

In the near term, the long-term sustainable would be closer to 150 days.

150 days, okay. And what is your steady -state capacity utilization, like, after everything goes, like, everything normalizes all the capacity and everything?

Optimum utilization is between 70% and 75% depending on the product mix that we are running.

Okay. Thank you. Thank you for taking my questions.

The next question comes from the line of Vinod with Vedant Investments. Please go ahead.

Hello?

Yes, hello.

Hello.

Hello, we can hear you.

Yes, am I audible?

Yes, you are.

Yes. First of all, I would like to appreciate the communication that has come in the annual report. It's quite sincere and straightforward, so it's great to read. My first question is regarding the Europe distribution expansion that we're doing with warehouse and sales team build-up. Is that also warranted because of our German partner exiting, were they involved in our distribution? And now that they have exited, are we competing with them in Europe or in India?

So, there are two parts to the question. The first part, yes, they were managing our distribution in Europe. Was it warranted? Not necessarily. We could have gone through a distribution model. We invested in a sales team with a long-term view that as we are able to recover the sales, it will also help improve the margin profile and the margin realization that we have from the European market, and to have more focused approach towards specialty products for the business So, that was that was the rationale behind building the sales team. And to the second part, the answer is no, we do not compete in terms of in our existing product categories, not in India, nor in Europe.

Thank you. My second question is regarding the battery chemical supply chain. Are we dependent on China for phosphoric acid? Is there a risk of the margins getting affected when there is -- you're saying you are the only player outside of China, so are we at their mercy in some way when we scale up?

So, we will not be sourcing any phosphoric acid from China. That is a prerequisite for us for Sudeep or Sudeep Advanced Materials to be FEOC compliant and to supply into the US market that we do not have any supply chains from China. So, we have -- the short answer is, we would not be dependent on China.

So, is the supply kind of, I mean, is it already assured for you? Is it all -- where does it come from, if it is not?

So, phosphoric acid is not a new raw material for us, it's our largest raw material today as well in terms of value. We have geographical diversification. We source a large part now from India. You have few very large companies making phosphoric acid. We a lso import from 3 other countries, but not from ex China. And for the battery business, we have the level of visibility in terms of supplies, and working also, as we have our binding off-takes to also kind of secure the supply to ensure that when we scale to 100 KTPA and then beyond to 200 KTPA, we are not in short supply.

All right. That's it from my side. Thank you so much.

Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Thank you, everyone for taking the time to join this call and to for asking us very relevant questions. Thank you, Archit and Nuvama team, for arranging this call. Thank you, everyone. Hope you have a nice day.

Thank you. On behalf of Nuvama Institutional Equities, that concludes this conference. Thank you for joining, and you may now disconnect your lines. Thank you.