Acutaas Chemicals (NSE:ACUTAAS) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Acutaas Chemicals Limited Q1 FY 'twenty seven Earnings Conference Call hosted by NUMA Institutional Equities. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Mr. Arjit Joshi from the Institutions Liquidies. Thank you, and over to you, sir. Good evening, everyone, and thank you for joining us on Acutaas Chemicals Q1 FY 'twenty seven Earnings Conference Call. Today, have with us Acutaas Chemicals Management represented by Mr. Naresh Patel, Chairman and Managing Director Mr. Ramesh Patel, President Strategy and Mr. Bhavin Shah, Chief Financial Officer. I would now like to invite Mr. Bhavin Shah to initiate proceedings. Over to you, sir, and thank you.

1:02 Thank you, Acutaas. Good evening, everyone. We are pleased to welcome you all to our earnings conference call to discuss Q1 FY 'twenty seven financials. Please note that a copy of our disclosure is available on the Investors section of our website as well as on the stock exchanges. Please do note that anything said on this call, which reflects our outlook towards the future or which could be construed as forward looking statement, must be reviewed in conjunction with the risks that the company faces. The conference call is being recorded and the transcript along with the audio of the same will be made available on the website of the company and exchanges.

1:47 Please also note that the audio of the conference call is the copyright material of Acutaas Chemicals and cannot be copied, rebroadcasted or attributed in press or media without specific and recent written consent of the company. Now, I would like to hand over the floor to our CMD, Mr. For his opening statement. Over to you, sir. Thank you, Bhavin. Good evening, everyone. I hope you are all doing well. We began the financial year on the... On a turbulent note, driven by geopolitical tensions in The Gulf. While these things persist, our team has done commandable work in securing raw material availability and ensuring supply continuity.

2:38 The demand environment for our products remains strong as reflected in the quarter's results. We continue to see healthy RFP activity across our CDMO and NCE products, and our R and D team is working around the clock to service this pipeline on time. Within specialty chemicals, demand for battery chemicals remain exceptionally strong. I'm pleased to say that we have successfully completed the trial run of our battery chemicals plant and started commercial supply. Demand here is unprecedented, driven by tight global supply and we therefore expect a rapid ramp up over the coming quarters. Let me now turn to semiconductor chemicals. What we are seeing is that AI is starting to push CPU demand higher and that cooling memory chip demand upright along with it.

3:33 At a at a time when supply is already tied to us, this isn't a passing phase. It is a structural phase. As more of the world adopts AI over the coming years, the app... Appetite for CPUs and memory chips will only keep growing. Our ongoing engagement with customers reinforces our conviction that memory chip demand will remain strong, which in turn will drive demand for the materials we manufacture b... BFC, a plan to manufacture at India. Turning to our performance for the quarter. We delivered strong revenue of INR 329.7 crore, which is growth of 59.1% Y o Y. This strong performance reflects the agility of our business model, our ability to adapt quickly to changing environment and keep delivering the products to our customers on time and without compromise.

4:30 I would also like to compliment our team for navigating the logistical challenges through the quarter. On a different note, I am delighted to say that we have been certified as a great place to work. This is recognize... Recognition means a great deal to us because it reflects the culture our people have built together. One of tough collaboration and genuine pride in what we do. Our team is the engine behind everything we achieve, and this certification is through a proud validation for... Of their efforts. I'm equally pleased to report that we have received the responsible care certification from the Indian Chemical Council. Responsible care is the chemical industry commitment to the highest standard of safety, health, and environment performance.

5:17 And earning itself reaffirms our results... Result to operate responsibly and sustainably or even as we grow. To conclude, we have started the new financial year on a strong note, and I remain confident of delivering 25% revenue growth for the full year with stable margins. With that, I would now like to hand over to our vice president of strategy, Abhishek Patel. He will walk you through the detail... Who will walk you through the detail business update. Over to you, Abhishek. Thank you, Narishbhai. Good evening, everyone. Let me share some additional insight into our business performance for the quarter.

6:02 Starting with Advanced Pharmaceutical Intermediate segment, this segment delivered robust performance with revenue of INR 292.7 crore in Q1 FY twenty twenty seven, reflecting a strong year on year growth of 76.5%. While CDMO grew strongly year on year as we expected, the core Pharmaceutical Intermediate business also delivered a robust growth. This was driven by our top products as well as by a couple of new products that are gaining volume traction. Moving on to the Specialty Chemicals segment. As communicated on our previous earnings call, we are gradually phasing out commodity chemical from this financial year, replacing them with newer higher margin products.

6:49 Revenue stood at INR37 crore for this quarter in this segment, a decline of 10.6% Y o Y. Therefore, even though the BFC business recovered strongly, this was offset by decline in commodity chemical business, which is in line with our expectation. It is worth noting that while overall capacity remains largely unchanged, some minor CapEx is required to align the plan for the new products. As a result, there may be transition gap between phasing out of the old product and ramp up of revenue for new ones. Having said that, we don't expect the overall Specialty Chemicals business to decline this full financial year, While Commodity Chemical revenue will keep declining over the coming quarters, we expect that to be more than offset by growth in BFC and the new revenue from battery chemical as well as the new Specialty Chemical products having better margin.

7:47 Overall, we are projecting good growth in the newest specialty chemical business. Now turning to the capital expenditure. CapEx for Q1 FY 'twenty seven stood at INR56 crore, out of which INR15 crore were at the Indi Campsite, remaining INR 41 crore in ACL site, which is primarily diverted towards the battery chemical project at Jagadiya site. And then pilot plant at our Satin site and maintenance CapEx. As mentioned on our previous earnings call, we will incur additional CapEx for a new R and D center and for the acquisition of land for further capacity expansion. We will update the market once these projects are finalized.

8:32 With that, I will now hand over our floor to our Chief Financial Officer, who will walk you through the detailed financial update. Over to you, Bhaskaram. Thank you, Abhishekwai. I would like to briefly highlight the key performance metrics for the quarter before we open the floor for questions. Let me start with quarterly performance. Revenue from operations for the quarter reached $3.29.7 crore, representing 59.1% growth Y o Y. Gross profit for the quarter was $1.90.9 crore, 73% increase compared to the same period last year. The gross margin expanded by four sixty six basis point Y o Y to 57.9%.

9:20 Gross margin was driven by higher contribution from pharma intermediate business compared to same period last year. EBITDA for the quarter was INR113.1 crore, which represent more than twofold increase compared to the EBITDA of the same period last year. EBITDA margin were at 34.3%, up nine seventy three basis points Y o Y. EBITDA margin was driven by expansion in gross margin as well as operational efficiencies. PAT for the quarter was INR 74.9 crore, up 70.4% Y o Y. PAT margins for the quarter were at 22.7, which show an expansion of one fifty one basis point Y o Y.

10:06 Moving on to the balance sheet item, net cash and cash equivalent was around 314 crore as on 06/30/2026. Our working capital for the quarter stands at ninety nine days versus ninety one days in Q4 FY 'twenty six. This was driven by improvement in data center grade ore, which was offset by higher inventory days. With that, I request the moderator to open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer To ask questions, please press star and 1.

11:19 The first question is from Abhijit Akela from KIE. Hi, good afternoon and congratulations on a good quarter. Thanks for taking my questions. First one, just on the battery chemicals business. Are there any revenues that we have recognized this quarter? If so, could you 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? Hi. So as mentioned during commentary by our CMD, Naresh Patel, the validation of those new plant has already been successfully completed and that means that we have started the supply from that plant.

12:07 Now going forward quarter on quarter from second, third, fourth quarter onwards, they will keep on ramping up the production. I'm afraid I will not be able to share the particular number to it, but we are very confident that we will grow very fast in those two 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. Thank you. And on the semiconductor side, the IndyChem plant construction, if you could please just help us with the 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.

13:02 And maybe by 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 intermediate space. We have already guided about the growth in the pharma intermediate side. So I'm afraid I will not be able to share those number on that side. But yes, on the margin side for those two segments, fine, I will update on this.

13:59 So with regard to margin, our spec chem business is having around 24% margin and pharma business is having around 36% margin. It. Thank you so much. I'll come back in the queue for any more. Thank you. Next question is from Rikid Shah from Boring Asset Management. Please go ahead. Hi. Just adding on to the question for IndiChem. So once the plant commissions, what what would be your typical timeline in terms of trials, vendor cycle approval, and ramp up? Basically, are we expecting any sort of, you know, delay or time to be dedicated for this?

14:49 So as you know, this a newly constructed plant. The R and D facility has already commissioned there, and we have started product development from the R and D side. So I think this will reduce our timelines to commercialize the product. But obviously, because it's a new product, we are not committing any timeline 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, you know, 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?

15:43 So there are, of course, there are photoresist chemicals. What there we are... We would be doing, but there are multiple projects we are working on in the chem r and d as of now, but I'm afraid I will not be able to share details about those things as of now. Sure. In in our electrolyte subsidiary, we have, you know, sort of had a dilution and given 10% stake to ARV. Can you explain the sort of rationale here and, you know, what are we thinking the auto account for this? So this is basically 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... Has been responsible for the whole business development as well as the future business development and the sales for all our electrolyte additive product and against which we have given them the equity sharing that business.

16:56 Okay. Got it. So that's also my end. Yes. Thank you. The next question is from Nilesh Kugay from HDFC Securities. Congratulations on good set of numbers. First question to. If you look at the end cost, it is continuously going up. So what number we should take for our, let's say, 29, 28 as far as the employee cost is concerned?

17:44 So employee cost, if you see typically, so this quarter we have rolled out our annual increments and 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 150 crore of employee cost for the current year. Okay. Okay. And second question to Abhishek. Abhishek, last quarter, mentioned that the phase two will be commissioned in FY twenty seven, Q1 FY twenty seven in the electrolyte business. So what is the current status of that?

18:35 So for the phase two of this elect... Phase two, which is for the third product of our electrolyte additive segment, which is going on on schedule. And as we mentioned earlier also, by end of Q2 FY twenty twenty seven, we would be completing our CapEx. So that looks very well on schedule and we are expecting the trial runs to commission very soon. And I think it's for the fee you are talking about. For that also, there has been already tie up with the customer similar to for our from contracting place. Okay. So ramp up will be very fast. I mean, in FY '28, we will see ramp up from... Not only from first two products, but the third one also. Is my understanding correct?

19:25 Yes. Okay. Okay. Yeah. Thanks. Thanks, Abhishek. Thanks a lot. And all the best. Thanks. Thank you. Next question is from Akshay from AK Investment. Please go ahead. Hello, sir. 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 'twenty six. Okay, sir. All of that, my questions have been answered. Thank you so much and all the best. Thanks.

20:11 Thank you. Next question is from Vikas Angoude from Paris Asset Management. We seem to have lost the line for Vikas. We'll take the next question. The next question is from Jason Sons from IDBI Capital. Yes, sir. Thanks for taking my question. So first question, just I just wanted to know, I mean, we have had a good profit growth trajectory up till Q4. Even Q1 has been good, but you did allude to some caution regarding to the Middle East crisis and, you know, in terms of raw materials, supply and stuff like that. So just wanted to know our profit growth trajectory, 25% revenue growth. Do you see any moderation going ahead, you know, with our CDMO and other growth areas? Or are they still on track to, you know, post good growth? Or do you see some moderation or some optimism tempered going ahead into '27 for the whole year.

21:35 We are still very much confident to deliver 25% growth rate for the revenue as confirmed by CMD also. And for the margin side also, again, I want to reaffirm that we are confident to achieve similar margin as compared to last financial year. Sure. And sir, for this year, what is the CapEx estimated for '27 and '28? If you could give me and the breakup also if possible for '27 and '28, what kind of CapEx are we looking at? For FY 2027, CapEx is largely the spillover CapEx of electrolyte additive as well as the pilot plant CapEx, which is around INR50 crore and around INR45 crore of maintenance CapEx that is what the already planned CapEx for this year. Our and above, as I mentioned during my commentary that we are going to have R and D CapEx also and the land acquisition for our future expansion for our pharma business or any other business.

22:44 But for those two projects, we are yet to announce that CapEx. We will announce it at a really one time when the full CapEx plan is in place. Okay. Okay. Sure. So so this land acquisition still... It would be for what exactly? I mean, I I know you're still, you know, forming up the plan, but what exactly would the purpose of this land acquisition be? So for our pharma intermediate business, Sachin plant is already seeing the capacity utilization roof. And the plant is expected to get filled up in three years' time, maybe FY 'twenty. So we should be ready with some land parcel, which where we can have a new plan 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.

23:50 Okay. Okay. Sure. And just sir, also when you mentioned that you are phasing out the commodity chemicals and basically replacing the high margin chemicals, that is basically only for the spectrum business. And I believe even the pharma intermediates piece, you know, the... You know, in the other piece, in the core product side also, you're doing the same strategy. Could you just give some color on that? Oh, if you go through our comment is last year, we are already done with the similar exercise for our pharma intermediate business last financial FY 'twenty six. And now for this year, FY 'twenty seven, we are doing some of the restructuring in our old commodity chemical portfolio. So that pharma intermediate is already done in last financial year.

24:40 Okay. So pharma intermediate, that rationalization is over. Now it moves to the spectrum side of the business. So that will also basically drive margins ahead, improve margins going ahead. Okay, sir. So that's all from my side for now. Thank you so much for answering my question. Thank you. The next question is from Abhijan Srivastava from Marcellus Investment Managers. Please go ahead. Hi, sir. Thank you for taking my question and congratulations on the great set of results. Sir, there's a dip in other income this quarter from around 11 crores in the previous quarter to around 1.8 crores in this quarter.

25:30 Is there a particular reason for that? So, again, in previous quarter, it was largely driven by positive exchange fluctuation rate available for... With regard to Europe. So in the current quarter, we have only positive fluctuation of 10 crores compared to 10 crores in the previous quarter. The next question is from Judy Gumari from Financial Services. Congratulations on a good set of numbers. I had my first question has other expenses, like, for this quarter has been in line with the previous quarters or has been moderated.

26:34 So what would you give as a guidance for the rest of the FY 'twenty seven 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. Okay, sir. Thank you, sir. 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 'twenty seven. So do we expect to exceed this margin with this kind of run rate in the first quarter?

27:36 But 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 'twenty six. So that will be reflected maybe around similar line in FY 'twenty seven as well. Okay. Okay. Thank you, sir. Thanks for the opportunity. My own questions are answered. Thank you. The next question is from Archit Joshi from the Huawei Institute Equities. Please go ahead. Thank you, sir. Sir, have two questions, slightly more strategic. Firstly, I've seen quite a few plans of, you know, the electrolyte soils, electrolytes, cathodes coming in recently.

28:27 And given that we have made some inroads starting with the additives, have we given it a thought, you know, that there are export opportunities available that we should maybe, you know, go a bit more into the value chain, you know, to start off with solids, electrolytes? What are your thoughts on that if 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 speaking to the electrolyte additive segment only. And that is our cost and we want to stick to our strength only. We don't just Right. Want to get into other people's shoes. Understood. Understood.

29:13 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, you know, 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, you know, sustain the growth momentum, even though we have right now for the fourth... Forthcoming quarters and maybe few more years. But how would that CDMO journey be if I have to make a, let's say, five to seven year assessment of how our growth trajectory will be?

30:01 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 and d, and there are various stage of r and d as well as the validation. And some of the projects already we have mentioned that few projects are already validated, and there are many more to come. So there's the kind of normal day in day of job for both our business development as well as the r and d team. And what I can assure 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 agreement, we will not be able to share that particular detail about that business.

30:57 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 how are we getting the inquiries from the customers. Qualitative aspect of that will also be very helpful to understand. That's a That would be my last question. 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 thousand core 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.

31:57 So that is what I can at least give you assurance on this business side. Sure, sir. 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, 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 with obviously, that product is an anchor product, but there are other CDMO product based on which we are consolidating consolidated revenue for CDMO with the... That is what we are guiding.

32:47 Noted, sir. Thanks, sir. That helps. Yes. Yes. Thank you. You look to the next question. The next question is from Shreya Bantia from Oakland Capital Management. Please go ahead. Hello. Am I audible? Yes. Yeah. Congratulations for the great set of numbers, sir. I wanted to understand from the standpoint of daratumumab. So since there are new indications that are being currently under trials, so average... Which according to the report suggests that it will double the addressable patient pool.

33:32 So does it also double the revenue opportunity for Nuveka? That would be my first question. I think for So any indications from them nine. Innovator? Yeah. So it will be difficult for us to comment on 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 guide... Guidance we have given for our CDMO business. Understood. Understood, sir. So just if I can ask related to this, so there has improved their revenue target to...

34:24 Which would be somewhere around 5,000,000,000. So does it include these? So 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 do. We are not guided by the market expectation or the whatever the buyer has would have propagated in the market. Okay. Okay. Thank you very much. Thank you. Next question is from Rohit Nagaraj from three sixty one Capital. Please go ahead. Thanks for the opportunity and congrats on a strong set of numbers.

35:10 First one on the battery chemicals front. So you said that we have contracted out the capacity. In terms of customers, is it a single customer or multiple customers and which geographies are we going to cater to? So it's a multi it's not driven by single customer. There are multiple customer. We have time to time share that we have a number of customer already in place for both BC and FEC. And their 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 next few quarters.

36:02 Can we expect that we will hit the peak revenue potential by, say, FY 'twenty nine? Yes. We have already guided that in three years' time, it should hit our full capacity utilization, and we are more than confident to achieve that target. And we have now looking at the third product commercialization. Beyond that, how many are there any more products which are in pipeline? And as I mean, we find in the commercial viability, what could be the gestation period to commercialize or put up the CapEx and commission the project? Thank you. So after this third product, fourth product is already been developed and now we are in the final stage of signing a long term supply contact with the customer.

36:57 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 and 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. Today. So we have a large pool of mass... Basket in the product pipeline so that it will keep on growing our electrolytic business in future also apart from first two products. Right. And second question is on the semicon side.

37:45 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 three years after commercialization will 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 and D facility. It will be a slow start because it's a new business, but maybe in three to four year times, four years time, we should be able to fill up our full capacity at IndyChem. Right. Thanks a lot for answering all the questions and all the best, sir.

38:33 Thank you. The next question is from Krishna Yoga from Family Fund. Please go ahead. Hi, sir. Thank you for the opportunity. So my question is very specific on the molecules. I know I don't want to specific molecules. It's related to Johnson and Johnson and Capleta. In previous calls, you mentioned about it. So what is the status on that particular molecule? Sorry, your voice is little not clear. Sorry. Can you come again? Was now? Yes. Is it clear? Yes. Yes. Yeah.

39:18 Sir, actually, question is on specifically our product. Of course, I don't I don't wanna mention the name also. The molecule which is from the Johnson and Johnson and the Caplita, in the previous calls, you mentioned about it. So what is the status on that particular molecule as of now? So I'm doing the answer for that. That product, we don't deal with the Johnson and Johnson. We have a generic three partners? Yeah. So that we already qualified with them. DMF is already filed, and now we are waiting for the launching of the same product. Okay. And what is the current status about the Apixaban? Because Apixaban is going to expire... The payment expiry in 2026, and the next one is 2027.

40:10 So are we ready for the next... I mean, is our capacity is sufficient to fulfill that demand in the upcoming years? Yes. Yes. Their product has already started picking up for us, and we have a sufficient capacity to cater that demand for that product. Okay, sir. Also, another question, what is the status of the capacity utilization of the all three plants? Okay. For the capacity utilization, for the 13 unit, the capacity is 83%. For Unit 2 at Angleswar, it is 23 and at Unit 3, WA is 55% for the quarter.

40:59 Okay, sir. Yeah. Thank you so much. Thank you. The next question is from CA Nupur Gupta from NIDL. Please go ahead. Hello. Hi. Yeah. 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 the commercial ramp up for these products? And also, additionally, like, we have a revenue... CDMO revenue target of thousand crores maybe by FY twenty eight. So what percentage of this target is that currently?

41:49 Like, do we have offtake contracts or long term supply agreements or any pipeline opportunities for the CDMO product? For this product, we have already mentioned that these are already validated product. And with our regulatory approval in place, we are expecting revenue to kick in from s to f y twenty seven onwards. And on a revenue potential side, these all products are expected to generate revenue between INR 50 crores to 100 crores for each at a peak. Okay. Thank you, sir. 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?

42:39 The revenue has already started as we mentioned. We have done with the validation batches. Sorry, batches from that plant. Okay. So, like, trial revenues are done and the products are to be commercialized very soon. So commercial revenue would be... Would begin soon. Right? Yes. Yes. Yes. Okay. Okay. Thank you, sir. That's all from my side. Thank you. The next question is from Rikid Shah from Boring Asset Management. Please go ahead. Thank you for taking my question again. 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, you know, targeting new modalities, therapies, r and d with, you know, the new pilot plant that's such in that, you know, you will be happy with the CDMO sort of pipeline expanding in a very meaningful manner over the next two to three years so that we are not prone to an anchor product in the CDMO basket.

44:00 Okay. Let Naresh Bhai come in to answer this question. Thank you, Abhishek. Thank you, Acutaas. 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 lot of traction. Our BD team is doing excellent work. And in our core chemistry strength, we are getting lot of inquiries and we are converting this inquiry into the commercial samples as well. So it's not a one day or it is not a stop stop kind of thing, but it's a continuous process.

44:45 So annually, 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 30, 40 molecules in this basket. Are you there, Rakim? We've lost the line for Rakim. We'll take the next question. The next question is from Jason Sones from IDBI Capital. Please go ahead. Sir, thanks for taking my question again. Sir, just, I mean, in terms of battery chemicals, just wanted to know, I understand that you have long term contracts and for VEC, APC.

45:40 So just, I mean, I understand that revenue and all you're not, but probably some ballpark or something we would like to share for two to three years how... Just it will give us an idea of how it can scale up because battery chemicals, you know, is quite an... In a in a mode space 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, right? So our battery chemical business, what I can say is we have already planned 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.

46:26 So you know that the plant, we have a capacity of 2,000 metric ton for VEC and 2,000 metric ton for FEC. So it's a total 4,000 metric ton capacity and which for which we are more than confident that we will be able to hit the full capacity utilization by end of three years. So that's the kind of ramp up. And you know how the pricing are there in the market, so you can easily calculate the revenue potential at least from these two 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 on in this business.

47:13 Sure, sir. And sir, one question, just wanted to know, I mean, of course, I know early days in IndiCAN. But sir, again, just wanted to know, I mean, in terms of margin profile in the IndiCAN product, will this similar to our as... 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 Indicam business, I think you should not look at the API biz... Yeah. 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's a similar kind of even better product portfolio than what we are... We used to manufacture at BFC.

48:04 Okay. Sure. Sure. So any ballpark, sir, would you want to give on that? On a steady state basis, what would as of now to give any number on this. Sure. Sure. Thanks. Thanks a lot for answering my questions. Thank you. Thank you. The next question is from Panal Kapasi from Antique. Please go ahead. Can... Am I audible? Yes. Thank you, sir, for the opportunity, and congratulations on a good set of numbers. So my question was more on a broader view given that our bi key chemical efforts will soon bear fruit. And, also, the indie game plant will start contributing to revenues maybe next year next year or FY twenty nine. Where do you see our overall revenue mix going from the FY twenty six level?

48:59 Do we see the Spectrum business contributing a little more as compared to now, or do we still anchor on the pharma intermediates business in the next three to five 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 spectrum business. And from here onwards, because of these two 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 three years' time.

49:59 Got it. So that is helpful. Additionally, sir, given that we are phasing out the commodity grade chemicals in the spectrum business and the new products which will come out from IndiGem as well as the Vectricam as well, which will have better margins. Do you see Spectrum margin moving up, which will also in turn give us a push on our overall concern margin? So question being, where do we see margins, let's say, three to five years down the line? Do we see them meaningfully improving from my FY twenty six 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 intermediate business.

50:49 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, intermediate 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 the higher revenue base also. But from a more higher 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 spectrum business. Over five years out, do we see margin that's similar level, or would there be a 200,300 improvement from these levels? So as of now, will not be able to guide you related to five 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.

51:52 So obviously, it will depend on how fast the ramping up happens with respect to battery as well as the semiconductor business. Got it. Thanks, Tyson for all the best. Thanks. Thank you. The next question is from who's an individual investor. Please go ahead. You may go ahead with the question. Am I audible? Yes. Please go ahead. Hello? Yeah. Yeah. Thank you very much for taking my question. So my question is around the CDMO business, pharma intermediates.

52:40 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 Narej, I already mentioned, we have all we are working on multiple projects. And every year, there are a number of projects that are coming in the R and D pipeline. And slowly, slowly, it will derisk our revenue concentration for 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 toward that product, but obviously, it will get diluted over the years once the new CDMO and other product keep on adding to the basket.

53:42 Yeah. Under 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 receive so many inquiries or requests from the customer, but as we mentioned multiple time in early discussions as well, we do not have any plan move to the up for in the value chain. We do not compete our customer. That's our policy, and we would like to stick to it.

54:29 Thank you. Thank you so much. That's all from my side. Thank you very much. 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, Summa 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 you, all of you. Thank you very much. On behalf of Noama Institution Equities, that concludes the conference. Thank you for joining us, ladies and gentlemen.

55:15 You may now disconnect your lines.