Fineotex Chemical (NSE:FCL) Q1 2026 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Fineotex Chemical Limited Q1 FY 'twenty seven Earnings Conference Call. 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. Please note that this conference is being recorded. I would now like to hand the conference over to Ms. Adi Junjunwala from Fineotex. Thank you, and over to you, ma'am. Thank you. Thank you so much. Good day, everyone. A very warm welcome to our investors, analysts, shareholders and members of the investment community.

0:46 Thank you for joining us today for Fineotex Chemical Limited's earnings conference call to discuss our performance for the first quarter of FY 'twenty seven. We sincerely appreciate your continued trust and support as we continue to build Fineotex into a diversified global specialty chemicals company that provides tailor made solutions to its clients across the globe. Our key focus remains on innovation, operational excellence, sustainable growth, and creating long term value for all our stakeholders. Over the last few years, Fineotex has evolved significantly. While textile specialty chemicals continue to remain the foundation of our business, we have successfully diversified into several high growth segments, including oil and gas chemicals, water treatment, industrial and institutional cleaning, construction chemicals, paints and performance chemicals.

1:46 Today, our products serve customers across more than 70 countries, supported by a growing global manufacturing and distribution network. A key milestone in our international expansion has been the successful integration of our US based subsidiary, Crude Chem Technologies Group. During this quarter, we commissioned a major expansion, capacity expansion at our Texas manufacturing facility, increasing the total manufacturing capacity to approximately one forty eight thousand metric tons per year. This strategic investment significantly enhances our ability to service larger customer contracts, improve execution capabilities, strengthen operational scalability, and support the next phase of sustainable growth in the North American oilfield chemicals market.

2:41 Alongside this, our international expansion, we continue to invest in innovation and sustainable chemistry. Our r and d teams remain focused on developing high performance, environmentally responsible solutions that help customers improve productivity while meeting increasing stringent environmental standards. Looking ahead, we remain committed to expanding our global footprint, strengthening customer relations, investing in innovation and maintaining disciplined capital allocation as we continue building a resilient and diversified specialty chemicals business. With this, I would like to invite mister Arindam Chaudhry to provide an update on our textile specialty chemicals business. Thank you so much, and over to you, Arindam ji.

3:31 Thank you, RTG. Very good evening, everyone, and thank you all for joining us today. As you know, our textile specialty chemicals business delivered a resilient performance during the first quarter despite a dynamic global operating environment. While geopolitical development and raw material volatility continue to create near term uncertainties, the underlying demand environment remains encouraging, supported by improving exports, healthy domestic consumption, and increasing demand for value added textile solution. Our strategy continues to focus on high performance specialty formulations that help customers improve fabric quality.

4:21 They enhance operational efficiency and meet evolving sustainability requirements of top brand of the world. During the quarter, we continued working closely with customers across key textile clusters in India and international market through application specific solution and strong technical support by all our stakeholders. You all know innovation remains central to our growth strategy. Our r and d efforts are focused on developing next generation specialty chemicals across all stages of textile processing, like pretreatment, dyeing, finishing, and functional textile applications. At the same time, increasing emphasis on sustainable textile processing is creating a strong demand on sustainable textile processing, environmentally responsible chemical solution, an area where Fineotex is well positioned.

5:24 We also remain optimistic about opportunities in technical textiles, while growing demand across automotive, medical, industrial, and infrastructure application continues to create attractive long term growth potential. Overall, with a strong innovation pipeline, deeper customer engagement, and continuous focus on value added products, we believe our textile specialty chemical business remains well positioned for sustainable long time growth. With that, I would now like to invite Mr. Yousuf, K. Contractor, to share an update on our oil and gas specialty chemical business and international growth initiative. Thank you, and have a good day.

6:10 Thank you, Arandan ji. Thank you, Arandam ji, and good evening, everyone. Our oil and gas specialty chemicals business continue to make steady progress during the first quarter as we further strengthened our presence across key North American energy markets through our USA plant. Customer demand remain encouraging across our portfolio of production chemical, water treatment solutions, flow assurance products and other specialty formulations. Under Fineotex management, The USA operations has achieved meaningful improvements in operational efficiency, capacity utilization, execution capabilities and other scalability, resulting in a significant expansion in EBITDA margin.

7:01 These improvements have further strengthened our competitive positioning in the North American oilfield chemicals market. A major achievement during the quarter was the expansion of our manufacturing facility in Texas, which significantly enhances our production capacity and ability to serve customers across major oil producing regions in The United States. Combined with our strategically located Midland facility, this expansion provides greater operational flexibility, faster deliveries and positions us to participate in larger commercial opportunities. Another important area of focus is sustainable oilfield operations. As environmental standards continue to evolve, customers are increasingly seeking chemical solutions that improve operational efficiency while reducing environmental impact.

7:57 This aligns well with our product development capabilities and long term growth strategy. Going forward, we remain focused on expanding our customer base, strengthening our product portfolio, enhancing technical capabilities, pursuing disciplined inorganic growth opportunities that complement our global specialty chemicals platform. We continue to expand our green chemistry portfolio, increase wallet share with existing customers and strengthen our international presence. We believe the structural transformation of oil and gas business has established a stronger and more profitable operating platform with significant headroom for further revenue and profit growth.

8:44 With this, I would now request mister Sanjay Tibriwala, our Executive Director, who will now take this call take you through the financial performance of the quarter with greater detail. Thank you, everyone, and over to you, Sanjay Rai. Thank you, Suji. Good evening, everyone. I'd like to walk you through our quarter one financial year 'twenty ten performance. The total income for the quarter stood at INR 386.72 crores compared with INR 146.62 crores in the quarter one financial year 'twenty six, registering a 165% year on year growth, driven by full quarter contribution from The USA operations, together with healthy growth across domestic businesses.

9:29 The gross profit has increased to INR 133.4 crores compared to INR 45.96 crores in quarter one financial year 'twenty six, while the gross margins improved to 35.42%, reflecting the company's ability to successfully pass on higher raw material costs while maintaining healthy blended margin. The EBITDA stood at INR 59.14 crores for the quarter compared with INR 25.2 crores in quarter one financial year 'twenty six, registering 134.7% Y o Y growth, while the EBITDA margin stood at INR 15 point seven zero percentage. The profit after tax stood at INR 48.21 crores compared with INR 25.03 crores in quarter one financial year 'twenty six, representing a 92.67 percentage Y o Y growth.

10:25 The return on invested capital stood at 33.06 percentage. The return on capital employed, ROCE, at 25.56% and return on equity ROE at 20% approximately. Our working capital cycles were at seventy two days, reflecting disciplined capital management while supporting the scale up of our international operations. During the quarter, despite the volatility in the global raw material prices arising from geopolitical developments in The Middle East, we successfully passed on the increased import cost to customers, thereby preserving healthy blended margins. The successful integration of our U. S. State business has strengthened our operational platform, while the recently commissioned capacity expansion in Texas enhances our ability to support larger customer contracts and drive sustainable long term growth. We continue to remain and maintain a healthy balance sheet and providing us the flexibility to pursue growth, organic expansions and selective inorganic expansions and opportunities going forward.

11:33 Going forward, we remain focused on scaling our global specialty chemical portfolio to our organic growth, strategic collaborations and disciplined mergers and acquisitions across high growth specialty chemical segments. Thank you, and we will now be open and happy to answer and take all your questions. Over to you, Manav, please. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant.

12:19 Should you have a follow-up question, we request you to rejoin the queue. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of from NBS Brokerage. Please go ahead. Hello, sir. Am I audible? Oh, yes. Please go ahead. Yes. Sir, the company has undertaken significant success, you know, to add 69,000 MPP of capacity. Including the Yeah. Actually, you're not too clear. Can you speak slower so that we can understand it better? Okay. Hello?

13:06 Yeah. But Yes. Ahead, please. Sir, you have undertaken significant CapEx to add 69,000 MPP of capacity at your Texas facility, increasing the total capacity to, you know, from 80,000 m t p a to one lakh 48,000 m t p a. And consequently, the company's total capacity has expanded to two lakh 68,000 m t p a. So given the sizable order book and apparent the burn demand, what level of top line and bottom line growth can we expect as the benefits of this extended capacity begins to materialize? It's my first question. So my second question is on the... You know, as you are saying, evaluating inorganic growth opportunities. So have you found any specific opportunities? Is there any... You know, in which particular segment, is it... Will it do on oil and gas segment?

13:52 And by when we can see it metalizing? By the year end or any timeline, if you can provide? Thank you, sir. Okay, Kirti. Thank you for your questions. So let me start it in a way where, as you can see, the Texas business operations has already expanded substantially over the period of few quarters. And also this quarter has been the remarkable success. We are quite confident of taking it at and this should be one of our base quarters going forward in terms of capacity utilizations and also the maximum revenue, what we can get out of this. So as you know, we have more than 100 product categories and pricing of the chemicals also are different based on the kind of orders and the trend of the wells and the activities which are ongoing there.

14:47 So generally speaking, we are only being using only up to 63% of The U. S. Texas plant operations capacity still now. So we can easily add another 30%, 40% on that business itself. I think one of your questions could also be like how much portion of this business is being contributed in the total revenue. So as such, almost 65 of the businesses are based out of in terms of revenue is contributed by the oil and gas. And in terms of volume, it's almost 55%. So coming to your next question, it's about the inorganic opportunities.

15:32 So as you might be aware that this is our second acquisition. The first one was in August 2011, which was after three months of being listed when we came out of it an IPO. So that proceeds were used to acquire stake, major stake in a European producing specialty chemical company located in Malaysia, where Fineotex owns 72. So that was the first mid in acquisition. The second one is the Group, which is done in on ninth of December last year. As such, we are always looking for certain opportunities, and we our parameters are quite certain, which is number one, synergy. And number two is also on the value what we can bring out of the company which we acquired.

16:20 So as you can also see, we have been always cash disciplined. And so we are very much careful in deployment of cash. So we would always like to make sure that we get a good value for all of our shareholders on that. At the same time, there has to be a synergy between the businesses. So Crude Chem was like, it was a perfect synergy for us. And rather we would call it like, we have given the growth cap to group, and that's why you can see flying colors from the time we have entered because it was requiring the capital to go to the next level. So, yes, so we are already looking at opportunities in and out. I mean, that's something which we do. And also after mister Youssef Contractor, who was heading our mergers and acquisitions.

17:08 And in the past, he has been working in quite big specialty chemical company, global players, and heading the Moses and acquisitions. So yeah, there is a lot of opportunities going on and we are discussing. As soon as something comes on a very advanced level, we will be implementing the stock exchange as usual. And that will be the message to all the participants and shareholders from thereon. Thank you, Kirti. Thank you, sir. Thanks. Thank you. We have our next question from the line of Pat Modi from Securities. Please go ahead. Hi, sir. Am I audible? Yes, Pat. Go ahead, please. Congratulations firstly on the very good set of numbers. So firstly, a clarification that you said that 65% of the portfolio for revenue of this quarter was from oil and gas, right? So roughly INR $2.50 crores?

18:07 Yes. Okay. So my question will be, sir, you gave a guidance last quarter that of $100,000,000 in FY 'twenty seven and $200,000,000 in FY 'twenty eight from this segment. So I wanted to understand that what crude oil price are you building into that assumption? And is the guidance more of a function of order book or contracts already in hand? Or is it contingent on crude staying above a certain level? No. Okay. So always on the order book and the kind of businesses and the kind of the expectations from the kind of businesses we are doing with the customers, that is important. It is not related to the crude oil prices at all. Crude oil always, as we see, it has its own fluctuations.

18:55 By and large, crude oil prices has nothing much to do until it's on a very different level of things. Right now, is looking like almost stable, like like $90 $100 That's the mean rate. Yes. But in a way, you can say that the higher the crude oil prices, the activity in U. S. Is always higher. And U. S. Is and the surrounding countries are our major businesses for our U. S. Operations. So looking at that, it looks like we can have better further better days going forward. Okay. So if just in case, if crude falls below or near to $60 so does this $200,000,000 in FY 'twenty number still hold or it will get pushed back?

19:44 It's very hard to say. It doesn't matter actually because the activity, the cost of the crude oil basically is, if I'm not wrong, it's less than $10 and in The Middle East, and it's less than $30 or something like that, more or less. So whether it's $60 or $90 or $100 it's not going to stop. The activities rather they cannot stop because there is a lot of investments done in the extractions, upstreams, downstreams, midstreams. And most of the times when the production of the oil is done, it is not for that particular period. It's done for at least a couple of years ahead of it. So it's not exactly reflecting and not affecting the businesses. That's the way I will be able to that's our viewpoint, and that's the way it is.

20:36 Thank you. We have our next question from the line of Sunil Jain from Nirvelbank Equities. Please go ahead. Yes. On group number. So my Sorry to interrupt you, Sunil. Can you please use your handset? Yeah. Yeah. Just a second. Am I audible now? Yes. Oh, yeah. Mic right up, Sunil. Thanks. Yeah. Sir, my question relate to more of a food chem. So your existing capacity earlier was 80,000, which you increased to four lakh 80,000. And the capacity utilization is 63% of 148,000 or 80,000?

21:24 No. So I'm talking 148,000. 60 yes. So that's the capacity in The U. S. Okay. 148063% utilization. Yes. Perfect. Yes. Okay. And what's the margin in crude camp? Is that has improved during this quarter? Yes. So if you talk about the as we see in the gross margins, the blended gross margins on console level is today at 35.42%, whereas it was last year 33%. Last quarter, it was almost 29%, 30. Whereas the EBITDA margins has also gone positive. So I mean, it's like 15.7% now, and the last quarter was 13.93%.

22:11 So it has gone up by, let's say, almost 150 basis points on that levels. No. But group came stand alone, if you can talk about any margin? So as you can see, 65% of the revenue is contributed to Crude Chem. So for sure, the EBITDA margins are the blended ones are also on this level, then it's going up. So the margins have to be much better than what it is before, and that's the way it is. And we have been able to do a lot of synergies, a lot of technology transfers, making more cost reduction reduction on those lines, and this has really helped.

22:56 And further on, a lot of the sustainable products, the green chemistries are getting more and more in demand, which has a better profitability. So looking on that line, these all factors have helped us to have a better EBITDA margins in The U. S. Operations. Okay. And sir, just a clarification, whether your products are used in even production of sale gas or no? Yes. Some of the products have application in those lines as well. But not much dependent on cell gas? No. Not at all. Okay. And just the last question related to if I see your stand alone business, stand alone revenue and EBITDA, it has shown some marginal decline. So any specific to read into that?

23:46 Or it's more of a seasonal? So what is also happening, thanks for asking this. So in India, we already have another subsidiary, which is called FSPO Specialty Private Limited, which is 100% owned by FCL. It's in India for our new plant. If as the and the shareholders know about that, we have a new plant which was commissioned last August, and that company is under the name of FFL Specialties. So that is under the 115 BAP, where we have a tax We are also having a tax planning on that from the for 15% of instead of the 20% or 25% of actually. So this is the new investments being done and some of the businesses and the new product lines are being manufactured in the new plant.

24:37 And so if you consider the Indian operation businesses, it has to be FCL standalone plus FSPL. Okay? So if you consider both of it, then you will not see the dip. Now what happens as per the, you know, as per the accounting norms, we have to only reflect the standalone of the particular entity. That's why you can see some marginal dip. But overall, the dip is not seen once you combine the wholly owned subsidiary list of India, which is FSPL, where the new plant is established under. So if you see that way, you will not see those kind of things. So it's a more on optical... You know, it's more on the optical part of it, what you have been seeing. It's nothing to do exactly on that.

25:24 Hope this answers to your query. Yes. Yes. Yes. Definitely. Very clear. Just congratulation again on maintaining the working capital or reducing the working capital cycle to seventy two days. Great, sir. Thank you, Sunil ji. Thank you so much. That's all from me, sir. Thank you. Thank you. Have our next question from the line of Uttarsh Somayyad from Eco Quantum Solutions. Please go ahead. Thank you for the opportunity. I just wanted to ask you about your 100,000,000 and $200,000,000 guidance for. So since you won 53% of the entity in FY twenty seven, so after 100,000,000, approximately 15,000,000 will reflect in your Fineotex console revenue. Right?

26:15 So it doesn't work like that. As per the accountancy in that systems, as we own the major controlling stake, the entire business has to be, you know, consulate... Has to be consolidated with the parent company. So so as you can see, more or less two fifty crores is already coming in this quarter from The USA operations. You analyze it, it's, thousand crores. It's almost, like, $100,000,000. We've got the hurdle to analyze the things better. Yeah. So the the ownership... The noncontrolling interest number is what... Is the latter 45% you don't know about. You can refer, yeah, you can refer to our, you know, the, you know, the results which have been published yesterday. So you will find all those datas over there.

27:08 So, yeah, so that is the way it will be taking it up as per the... In that system. The thing is... Okay. I'll take this up offline. And one more question on margin. You had indicated that you intend to take your consolidated margins to 18%, and I guess you already reached 16 from 14 last quarter. After the acquisition, you did to 14, and now you're already at 16. So can you just kind of tell us how we should look at this journey from 16 to 18? And is... Are you still saying that it'll be 18? Are you think you can do better than that given that you've already reached 16 in one quarter? See, actually, you know, honestly, our focus is anything... You know, we cannot have any fixed blended margins ever because the kind of businesses where we are, what is important for us is to to have more customer engagements and contracts and businesses, which helps us a lot on the long run. So if we have a basket of products and they have a blended margins of whatever it is, we we are not supposed to say no to the customer because it depends on the volumes and other things also.

28:20 So we do not go for, you know, a clear cut guidance that this is a bit up percentage. Otherwise, we are not taking the business ahead. What is more important is in the long term, how do you shape up and be the leader of the industry? So... And that's the flexibility we all have to be doing. It's because this is not one product business. This is like a like it is the... You know, depending on almost basket of almost 100 plus products even there. And so that's the way it works. And sometimes there are trends and systems where the well qualities and other things and the pad and the crew, a lot of things becomes a factor to choose the kind of product which is fitting for that particular well. Accordingly, we have to offer the product and that is the way this business will be looking at it. So if we can also expect to maintain these kinds of EBITDA, at the same time do organic growth and also do a lot of more R and D activities and all these things, I think it is remarkable and I will be very proud of and about our team, which is already doing an excellent job. So that's what we are looking at. However, we will always aspire to have I mean, anyone will always aspire to have better EBITDA margins.

29:35 So that's about it. When Okay. Do you intend to... Can I go for one more question, if you don't mind? Yeah. Go ahead, I mean. Yeah. When do you think you will be able to fully utilize your three fifty million crew camp capacity at peak? When can you reach peak? Well, I mean, there is a strong order book going forward. I think already we have expanded. It's not even four months that we have expanded this capacities. We already started using it and reached almost 63%. So I mean, we are trying our best to use it as soon as possible. There is a good traction coming up. There's a good tailwind also coming up in the industry. So we think in the coming few quarters, we should be utilizing all of them. Let's see how it goes on.

30:31 Okay. Aggressive. Perfect. Thank you so much and best of luck. Thank you. We have our next question from the line of Prateek Giri from Shubla Research. Sanjay, my first question is on the textile business. So it's on the console top line of INR $3.77 crores. If we subtract INR $2.45 crores, which is CCTN, I reach out a number of $1.32 crores. Now if I compare this with $1.32 crores with $1.37 crores reported in q one of twenty six, I think there is still a dip, whereas we were anticipating better numbers in textile business. So if you can help us understand that,.

31:25 So you're almost there. So that dip, what do you see is is not a technically a big debt. It's a minor, you know, just a one or 2% plus minus thing. And it's always, you know, when... Sometime in the quarter one because of the monsoon and things like that, you know, it is... They won't take it as a as a as a debt, and we have been able to pass on the prices also. And also, there are certain products, which was of the competition in the textile industry, some of the expensive performance chemicals, the demand. It also depends on the trend, like we have been telling always. So sometimes the trend is for expensive products more, sustainable products more. So once you sell that, your revenues are... Because the average registered price for that are always much higher.

32:12 So, yeah, if you consider this, it's almost flattish. And Yeah. But that's also good right now because there has been a lot of, you know, competition in Indian textile, and the trend was not favoring a lot of chemicals in that. So this is very normal kind of things which always is we experience about it. Especially the quarter ones are always on that line because of the rainy monsoons that's a season where things are not in the great demand, especially the expensive product. So that's about it. Nothing to look at it. Understood. So you were expecting this to improve going further in coming quarters?

32:59 Yes, we are expecting a lot now. We have increased our team in marketing and technical services in Bangladesh as well. We have been participating in many trade fairs. We have coming up in this year also a couple of more international exhibitions in textiles. Plus last month... Two weeks back, we were in Varitex also where we have got a lot of important opportunities. So a lot of things ongoing. Got it. Sandeep, my second sorry. Sandeep, my second question is on 65% capacity utilization in CCTL. So it's hardly six months since we have acquired this capacity rather than business.

33:45 And we have doubled the capacity, and we are already sitting at we are already operating it at 65% capacity utilization. So I was just wondering, the targets which we have set, which is like $200,000,000 from this business, will we be requiring to invest substantial amount of capital to grow the capacity again because we are already at 65%. And just one corollary to that question is, since you are operating it for now six months, what is the ROC profile you are looking in that business, Sanjay? So, actually, know, Prateek, I mean, how the business we look at is, see, our business is a very high end specialty gross margin businesses. So ROCs and ROEs will be always one of the best of the industries. That's the way it works because it's not a CapEx driven businesses. It's not a basic commodity where we are, where we have to be bothered or considering ROIs, ROCs.

34:42 It's always been nice and the best of the industry. Even if you consider, like, you know, we have been listed for last last fifteen years, let's say, sixty quarters, you'll always see our ROIs, ROCs always being healthy because we prefer to work in such kind of product lines where there is a lot of margins, which in turn is reflected and that which also means that the products are special because we have a higher ROCs and things. So basically, the volumes that you're talking about is all based on one shift till now. Okay? There is always a scope to have to double the shift, and we can always do that as per the need. What was also important in this expansion is that there were certain new kind of machineries which were installed, which gives a better high performance product lines and qualities. So it's not having the same kind of vessels or something or reactors or, you know, production capacity. These are certain, you know, products which has to be done in a particular condition, and which gives the which gives the customer a better performance.

35:40 So we have been, let's put it like this, enhancing the customers, you know, the requirement, and that's the way you you know, we would like to answer to your question. Understood. So you're saying this is... This 65% is on one shift basis. So if we run the capacity probably in two shift, even the existing equipment base can give us incremental top lanes. We won't need to put more capital. So I I mean, I will tell you what, Pradeep. Let's assume. Even if you need to put, okay, so it's not gonna be more than 2,000,000 or $1,000,000, which is not even 100%. As of now, also, we are, like, very high cash on book, as you can see. And the working capital is controlled. Everything is going fantastic. So even if it is 1 or $2,000,000, I mean, it's not going to be a topic of discussion on... Or or something which is thought...

36:33 Taken as a, you know, one of the important topics of discussion. What would be... You know, what we are excited and enthusiastic about is what kind of businesses we are getting with the Shell Exams of the world, you know, the top five, four, five, the biggest service operators of the world. So how quickly we can grab our attention and how quickly we can grab the businesses from them, that's the key, and that's what is our focus. You know, know, the... 1 or $2,000,000 investment year and there is not gonna change the world for Fineotex at all at the moment. Correct. So, I mean, that's not the concern, and that's not the... That's not gonna be a game changer. So we are looking at game changer. We already, as you can see, we we could...

37:22 We were looking at this acquisitions for a very long time. We were already working with them. We understand their needs. They could see the synergy. They knew the quality of Fineotex, the way we have efficiently operated, the technology we have, the kind of performance we have delivered in the last sixty quarters, which made them compared to do business with us. In fact, some of the customers also advised them to do this tie up with Fineotex and take the growth capital from Fineotex. And and here you can see what's... I mean, the numbers and the results speaks for itself. So... And the... I mean, so... But you were asking something which is, of course, can be answered, but it's not a concern or a challenge or, you know, it's not a I am sure CCTL's customers, I think there are not many, but whoever they are, they are very big.

38:25 So are you sensing some change in their behavior towards CCTL given the fact that now CCTL is backed by Fineotex? And can you share some anecdotal example in terms of wallet share gains, which we are enjoying because of our support to CC CCTL? I mean, it's a very long story and topic. It will take hours for us to explain to you and give you case studies. So, I mean, yes, once the... You know, it's powered by Fineotex concept, you know, they are... So, I mean, the service operators know that, you know, the the volumes can be given to crude chem and Fineotex is able to digest those kinds of investments, what we have already done. There is a lot of investment with Fineotex already done in The US operations, extending the working capital, extending getting the raw materials at the right price.

39:15 So there is a lot of things. It's not factor. The results what you see cannot be based on one point. You know, it's a it's a mixture of so many points. It's like investment in production, investment in r and d. We have... You know, so many more doctors have joined the group in USA. So many quicker executions are going on. I mean, stuff like that. This is an ongoing process, and we have been... I mean, the... All the customers and the suppliers are very happy with the way we have been doing businesses now. And... Yeah. And also, there has been a lot of cross selling, and some of the customers were common, and which helps us to build a further reputation. We are also looking at offering those customers goods in Asia, made in India or in Malaysia. And and there's a lot of more things.

40:00 I mean, this this call will not be enough for me to express to you. You can take you can take on a later Yeah. So, I mean, it's it's like we are going in detailed engineering now, something like that. So... Yeah. Sure. So... Yeah. We are doing everything I and learned the feedback, Sanjay. Very helpful. Good luck. I learned the feedback. Thank you. Thank you, Patrick. Thank you. Thank you. We have our next question from the line of Vignesh Ayer from Sequent Investments. Please go ahead. Hello, sir. Thank you for the opportunity. So my two questions from my side. First question is, sir, earlier in our management commentary part, I heard that you were referring to the number that we have, know, I mean, achieved in the quarter one as a base number. So So should we look it from CCT point of view or on a consolidated point of view if we have to understand the base that we have set?

41:02 Generally, whenever we discuss on these things, it's always on the console levels, and that's the way it's it's being looked at right now. Right. Yeah. Yeah. Yeah. Perfect. Perfect. Perfect. Also, I heard that almost 65% of our revenue is coming from CCT, which is so just wanted to understand on how we account for the foreign gains or loss that we made. Is it primarily the part of other income that we have been recognizing for past few quarters? No. I mean, these are not exactly other income. If at all, that is classified, it can be a foreign exchange gain on the loss. That's the way the accounting policy is defined as such.

41:51 And also, we have a natural hedging also. So we import a lot of raw materials. That's also in dollars. Then... So that's that's the way it has been hedged. I think that was your question, right? Yes. So my question was more like if there is a foreign exchange gain or loss, is it accounted as part of other income? Or is it part of the EBITDA? It's declared separately, and it's always, I think, has to be declared as a foreign exchange item separately. Okay. Okay. So what is primarily bad? Which part of... Or, you know, is it a treasury income? And what what is ended as part of the I mean, I mean, as such as such, you know, it's it's like this. Like, in in US operations, we're buying US dollars. We're selling US dollars.

42:45 So it's always the... You know, whatever we make the profit, and that has to be converted at the at the average weighted price of the dollar exchange currency. That's the way I I recall it. That is defined by the index format, and that's the way... I mean, it's not our option. It's not an option. It's a it's a process, which is a protocol which has to be followed. I mean, there is no... It's not that from Indian rupees, we are exporting. I think your question is more relevant if we are buying certain raw materials in India and exporting in dollars, and then you earn a foreign currency, and then you have a benefit out of it. But here, in crude cam, everything is bought in dollars, sold in dollars, so it's just dollars. So so that's the Just just on the last days, it gets converted for the purpose of the presentation is what I understand is what you are trying to say. Right? I mean, maybe we can get into that answer and give you what... I mean, I don't know how important is this question. This can be a gap of 1 or 2 crores. I don't know what it is. So, okay, we will... If you have something more, you can always get back to us, and we will these are, like, minor fine.

43:51 Yes. So okay. We can take it either in a separate call or whatever too. Yes. Thank you. That's all from my sense. Thank you. Thank you. Thank you. Before we move on to the next question, ladies and gentlemen, please limit your questions to only one per participant. Should you have a follow-up question, we request you to rejoin the queue. We have our next question from the line of Samad Gwal from Choice Institutional Equities. Congratulations on a great set of results. So my first question to you is, especially for the CCD business, can you explain us more on what are in factual terms, maybe in numbers, what were the operational efficiencies of energy you were able to generate, like, close businesses or maybe doing the oil and gas business from India or any other segment or any other points to it? The second question is that follow on question on this only is that, what is the order book at CCT right now and any average order values?

45:04 Yes, Samar, yes, thanks for asking us. The point here I would like to mention, there are a lot of synergies. And like I was also mentioning now, it's like synergy in technology, synergy in handling customers, cross selling, a lot of some of the products which can be modified here, which have been started doing there. There's a lot of green portfolios, product lines, which is also helping the businesses. And these are the kind of synergies which we have been experiencing, and that's helping us to get more operational efficiency. And going forward, also, one more important thing is because of the further investment and capital infusion, we were able to have a better pricing model from the suppliers, and that also helps us to have a better negotiation and better EBITDA margin. So I think that's what has been majorly contributing to what you were asking for.

46:05 And so... And this... I mean, I I just missed your second question. Could you repeat that, please? So the order book at CCT and Oh, yeah. Your average order values generally. Yeah. So, I mean, it's a very it's a very difficult question, actually. And so what also happens is, you know, the well are sometimes, you know, sometimes they they come in bunches. Sometimes they can be... You know, oil and gas, it's not... We we cannot be... You know, it it has its own, you know, cycles also in a way, a small cycle in the sense if there is a storm or a lightning or a rainfall, so things get off or there is a snowfall in US. So they get off for one week or two weeks. Again, they get up and ramp up the things and get it up. So these things do happen a lot. So in terms of general order book, there is nothing as large like order book, order book kind of concept.

46:59 There is... It's not a government order or tender, which we have won, and that is applicable for the entire year, and we keep making that. What is important here is whatever value we can bring to the customers, and there is a lot of changes happening. In fact, sustainability is playing a good game in the oil and gas industry. Most of the companies are all the biggest the oil companies and the service operators are looking to become more sustainable. As you know, that Fineotex is also having a great investments and a lot of attention on ESG profile. We have the Dun and Bradstreet batch for ESG profile, and a lot of actions has been done on those lines. So this is also helping us to grow the businesses, get more attention.

47:46 At the same time, we kind of businesses, once the well has started, the production cannot be stopped. So this is also something, you know, it's not exactly where, you know, we can, you know, pinpoint that, you know, this is the order book or not, but it's it's... It generally assumes that it is perennial. So that's the way it is. Okay, sir. Sir, next question would be more on the volume side. Can you give give us Sorry to interrupt you, Samad. May I please request you to rejoin with you as there are several participants waiting for their time? Sure. Thank you. We have our next question from the line of Ruchel Shah from Molecule Ventures.

48:34 Sir, we did around... On annual run rate around thousand crore in CCT this year, and we are guiding for around 2,000 crore in FY twenty eight. So our end product market is increasing at around 5000% CAGR. So what differently will you do that we'll be able to achieve the guided number of around 200,000,000 on the CCT? So, you know, know, Piyush... I'm sorry, Ruchil, the the way to look at it is even if you see the history, it was half of what it is today. And even if the industry has grown at what number you are talking about, we have still done a quite a good job and doubled that thing. And the kind of trend which is playing a good game here is sustainability.

49:23 We are poised, and we are well positioned with the product lines. We have good references. We are working with the biggest, you know, service provider companies. They have been, you know, appreciating the quality, and a lot of replications have been happening in the industry. It's like a me too snowball effect, which is also helping us. Now these are the areas which we were always active in. However, the tailwind has come now, and that's what... This has been the right timing, I think, where we could invest in the production r and d. We invested in getting more better suppliers, associations and tie ups at a better price and competitive pricing. It's a factor of everything because of which we reached here and because of which we we aspire to reach to the number what we were been talking about. So we still have two years to that.

50:15 I think it should not be a challenge going forward. And... Yeah. So let's... That's the plan right now. So by that... I think by, you know, about twenty twenty eight December, you will be happy similar kind of what you mentioned. I think we should be achieving it. That's what we our team is trying our best for that, which is reflecting in the numbers as well now. And sir, you mentioned that our margins are increasing under CCT, but can you specify how much margin we've made in CCT in one year for 'twenty seven, specific to the number? In a way, if you see our overall margin is now at, like I said, it is almost fifteen point fifteen point seven, you know, something like that, 15.70.

51:06 So now if you see the average blended margins one year back was also similar to 18%, but that was on lower base. Now this date has come up where the Texas operations, USA operations has gone and being contributing to major part of it. And the average blended is coming to 15.7%, which also reflects that the margins has to be minimum 13% there, 13% to 14%, which is very good in terms of these volumes and the value revenue. So this is the way it is right now. And we are and this is despite the fact of new plants coming up and, I mean, new capacities coming up and things like that, new manpower, R and D activities increasing.

51:52 A lot of things going on. So, yes, that's the way we have been targeting the thing. And, sir, how are you seeing growth in our base textile business? Like, do you... Will you guide any specific growth number for next two, three years Or specific to our base textile business? Look. I mean, textile is on auto run. We have come a long way. We are one of the brand leaders in this. As you know, in the last eighteen months or let's say, sixteen months from the time Dare's story has come in and hit India, textiles, every textile company was was not in a good shape. I mean, was in a... What... Was not in the best of its times. Step by step, UK has come in with India. EU has come in. US also has now started coming in, and a lot of things are getting better than before. However, of course, then you have the geopolitical situations where the freight cost is that. Everything keeps coming in, going out. So by and large, textile is always...

52:53 We have been always faring very well. In fact, as you see from 2011 to 2022 or 'twenty three, textile was contributing to 95% of our business. And in this period, we have already done a CAGR of more than 30%, more or less. So, basically, what I'm trying to say is that, you know, this is this is a this is a business which is... We are one of the oldest players in that. We understand this very well. We are diversified in all the substrates and all the customers globally in terms of and also in India, all the biggest companies are using our product lines in textiles. So this is something which has been always there. It's it's all obviously growing at its own pace.

53:40 So so that's about it. So we are we are totally, you know, contented with the way it has been going on even now. Despite the problems opportunity has faced in the past. We have our next question from the line of Rohit Ohri from Progressive shares. A couple of questions. First one, we start the dealers, they have increased from 103 to 115. So how much of these are contributed or maybe moved towards the legacy FCL business versus the CCT platforms? So in CCT, generally, the... We we do not have too many dealers or anything that comes up. It's more about giving to the end users and the users directly, the service operators directly.

54:32 Mhmm. So most of this, what you have seen is contributed by Fineotex standalone. Fineotex India group. In terms of repositioning the entire identity of Fineotex And this oil and gas playing a major structural growth engine for us currently, we are also becoming a little bit of export oriented because as we see in the presentation, the export mix has moved from 70% to 77% this time around. So is this because of crude claim, or is it because of cross selling, or is it because of some one off which is there in some shipment or something of that sort? So, generally, you know, the way we present it is that the product, if it's going for the Indian market, and so we we we classify in the domestic.

55:22 And everything else, what has been used in the international, whether in from our Malaysia plants or from The USA plants, are are classified classified under the international. So that's the way it is always being looked at. So you're trying to indicate that the Malaysian plant is also improving along with the other two entities that we have? Oh, yeah. Yeah. Right. Perfect. Okay. Okay. Last question. We had CCT business, the entire group coming up. There was a small entity which was having some last mile logistics with them, and they had some proprietary telematics systems also. So do you think that makes sense keeping this business? Or do you think you should be hiding it off? Or what is the significance of this business? This is a very good question, actually. So I'll tell you what happens in USA. The psyche of the customer is they need the delivery on their doors. It's very much service oriented businesses also. Now since we outsourced to Uber or transport or this or that, this is not going to make sense to them. Once we have these things under our control, this is a lot... You know, they... How do you meet the customer's sudden demand? In oil and gas, there is a lot of such kind of things we need to do it. This is one of the important reason and factor why Crude Chem also makes a good margin, plus why we are being more preferred by the

56:52 customers. Because we not only produce it, we go and deliver it up to their door. In USA, the concept is actually the customers are ready to pay you more price as long as you do the services. It's totally service oriented. So, you know, the model. It's unlike Indian model where, you know, if you are... If a Indian customer is saving 10 peso per kilo, they are gonna, you know, go to another transport and find another reason and this and that. In US, it doesn't work like this. And especially with these $500,000,000,000 companies or, you know, $100,000,000 companies, These companies, they are very clear. There is, you know, a last mile delivery, which is very, very important. There is a lot of insurance play also, and everything has to be well done. And, you know, every... There cannot be... It it it has to be very much particular about it. They're ready to pay a higher price for all these things.

57:45 Also, because these these products are not having a great cost to them. So it... It's a no point of, you know, breaking our system where they can go and find another transporter to do it. And firstly, we are more competitive by using our own transport. So it's making sense for everyone, and this, in fact, gives more attention. Once you say that we have the last mile delivery, it adds a lot of value. So this is a add on services which helps us to sell more, and it gives us a very sustainable business. So this is what we will always love to do, by the way, and this is an intrinsic part of it. For the point why we have classified and kept this business in a different name is because most of the time, there are a lot of insurances, auto insurances, workman insurances, driver insurances, etcetera.

58:38 And this has to be done on a different company. And as you know, in US, it's very common to sue each other and, you know, things like that. So we have to have the... At the low risk, we do not want the PCP to do all these things. So the company name is, which is doing this kind of services, last mile deliveries, and it's a pretty best combination going on. It's done separately from a a great, you know, logic about it. So this is just restricted to roadways, or is it combining railways as well? In US, there is a lot of railway businesses also. And and after railway also, then there is again road transport as well we have to do. So pretty much you can say it's more on the road.

59:25 We We have our next question from the line of Hardik from Larg. Please go ahead. Yes. Sir, because of the war, there was abnormal fluctuation in across chemical prices. So I would like to know that the good margins that have come in the last two quarters, is it attributed because of the moment in chemical rises because of the war, or is it sustainable? Those prices are sustainable even now. And because of that, we can expect the same margins to grow even in future. Is it... It's a one off or it's sustainable? That's my question. See, generally speaking, the profit margins are sustainable. Okay? And if there is a... For the rise in the price of the basic chemicals, we'll pass it on. If there is a dip in the chemical prices, we will have to reduce the prices but keep the same margins or some same absolute number per gallon or per pound kind of margins going forward.

1:00:25 So these things do happen because of the freight component. So we also... There is a good concept in US, which is called the war surcharge. So what happens with that is our prices are fixed, and then we have a separate war surcharge, which we Levi on the customer. And our suppliers also Levi on us, let's say, in fuel or fuel surcharge or water surcharge or something like this. But that also is a very defined factor in US, and it's also changing more or less with the situations of shortages and things like that. So this is something which the customers appreciate this, and it's a it's a system in USA to have these kinds of small surcharge concepts. So that's going quite helpful for us also.

1:01:12 And apart from that, even if it's not happening, it's okay because that's something which is almost like reimbursements or something like that, we can call it. And Could could you just quantify, sir, basically, because of the... Or how much the prices have gone up? And presently, are the prices down? Or are they where... From the last quarter, the prices where they were up late is there or down substantially presently? Just a rough ballpark idea. If you ask me this question last week, I will give you a different answer. If you ask me today, there is a different answer. And next week, I... We don't know where it's heading to. So, actually, what we were talking about, you know, there was a concept two weeks back in US and everywhere, pre war prices. Now from last one week, like today's Friday, from this week, especially, the news story is that there were... There's no prewar prices.

1:02:00 War is still going on. It just took an interval, by the way. So this is the new new way of looking at the same story, and this is something which is now embedded in the normal way of working now. So even if it is here or there, it's sort of changing. You know, the customers have digested this part. It's the new normal, we can call it. And we have been, you know, navigating it even despite whether there is a war or not a war or it's going down or above. It's very difficult because, see, we are not a product wise plant. We are a solution product company, and we are providing sustainable solutions, giving the last mile deliveries, giving technical services, a lot of things. Okay? So we cannot... One product where we can give you an exact answer.

1:02:47 There are certain products where the price goes up and certain products the price goes down. So if if there is a change in tariff, even if the price goes up, the price goes down and then the effective price is down or maybe equal. So there's a lot of factors and combinations. I have no perfect single line answer to it. It's a totality of factors. It varies from situation to situation. So my main concern was that the margins will be sustainable. It's... The war has nothing to do with the margin trajectory that you predicted to 18%. Yeah. Yeah. Yeah. Yeah. You're not in the basic commodity marketing where, you know, we are having some stocks and all the price went up. So we are making... We are not a trader kind of concept where we had the stocks and we sold at a higher price. It doesn't work like this. So yes, why not just the way it is.

1:03:33 Thank you. Have our next question from the line of Achilles Patak from SmartSync Services. Please go ahead. Thanks a lot. First of all, many congratulations for the great set of number to entire team. Sanjay, great turnaround on the numbers and the operations of the company after CCT acquisition. My question is, are we trying to capture a big market in terms of Canada, Venezuela, USA, in terms of customers which are closer to Texas only like and many other customers in Gulf also, apart from the big ones that we already have, ExxonMobil and Alibaba. No.

1:04:19 I mean, these are just examples. So don't go on only those names. There are so many names to the likes of that. These are names given to you because these are more famous. So, yes, as you rightly said, this is also important thing. We have already started selling to Canada from last month, and also things are going very well. And that's number one. We are... I I I don't know whether you have heard of such countries like Suriname and Guyana. So now these are, like, small African... Very well. Excellent. So these are, like, the countries which are controlled by US, and these are, like, hardcore oil producing countries. There is a lot of action going on. Most of the service operators are looking at companies like us and asking us to set up some activities and production plan there, and they can give us more businesses there. This is also going on. And so that is one. And we recently got a good business order from Saudi, and we have performed very well. It took us a couple of years for crude came, and there was a lot of r and d expenses done on those lines for two years, which got fruitful now.

1:05:20 In fact, last month only, we were able to prove the packages. And and the customer of ours has got us $8,000,000,000 order from Aramco and where they have to use our specialty package. So it's not product selling. It's at least a combination of five, six product lines, And we are competing and with The USA top specialty chemical companies. And because of being more leaner, we have an edge on pricing and the performance is equally. So there is a lot of action going on everywhere. We are looking at a lot of things. Of course, everything has been changing a lot, the freight cost and this and that. But I think navigating it further. So basically, whatever target we are planning to, it is bound. You know, we are aiming to achieve it as soon as possible.

1:06:07 If it is not achieved on... You know, as soon as possible, it will be achieved in a little bit more extra time, but things are going in the right direction. I mean, I think this would probably be our last question as per the message which I'm getting. And so, I mean, this is what we would like to tell all the participants and shareholders, stakeholders that things are being very well. We are enthusiastic and excited about the opportunities that are coming in. We are performing very well. There is a lot of synergies we have done and many things to happen in the coming quarters as expected. And so I would like to if I can give my closing remarks, Manu, or you have something more to add, Manu? Thank you, sir. Before we conclude the conference, if anyone has any further questions, you can get in touch with Saloni Nagwekar from AdFactors Investor Relations on behalf of Fineotex Chemical Limited that can assist you. No. No. So, Mano, I would like to mention that please be also... Our company team is also proactive in answering all the informations and and, you know, explanation required by the stakeholders.

1:07:21 Mister Yousef Contractor is already on top of it, and he has been taking the... You know, leading this thing very well and answering the cost... All the investors up to the, you know, all the inputs and information that they've given on time. So I think we are open for all the participants. Please send in your points to either our ad factors IR team or mister Yousoo. The email IDs are already mentioned in our investor presentation. And with this, thank you, everyone. Keep keep in touch. See you soon with some some better days going forward. Thank you so much. Have a good day... Good evening. Thank you so much, sir. On behalf of Fineotex Chemical Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.