Vishnu Chemicals (NSE:VISHNU) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Vishnu Chemicals Q1 FY 'twenty seven Earnings Conference Call posted by MK Global Financial Services Limited. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to mister Ariel Patel, MK Global Financial Services Limited. Thank you, and over to you, sir. Yes. Thank you, Faram. Good morning, everyone, and welcome to the earnings call of Vishnu Chemicals Limited for Q1 FY twenty seven. I would like to welcome the management and thank them for giving us this opportunity to host them. We have with us today Mr. Siddharth Cherokuri, Joint Managing Director and Mr. Hanuman Bansari, Vice President, Finance and Strategy.

0:56 Before we begin this call, I would like to point out that the discussion during this call may contain forward looking statements reflecting the company's current view of future events and their potential effect on the company's operating and financial performance. These statements involve uncertainties and risks, which could cause actual results to differ. The company is under no obligation to provide subsequent updates to this forward looking statement. I shall now hand over the call to the management for their opening remarks. Thank you, and over to you, Mr. Sridhar. Thank you, Savary. Good morning. Thank you, Aryan. Good morning, everyone, and welcome you all to the first quarter earnings FY 'twenty seven.

1:45 We are pleased to report a good set of results for the first quarter, continuing the momentum we've built during the previous financial year. Despite an uncertain global environment, we believe we have delivered over 20% year on year growth in both operating revenue and PAT, reflecting the underlying strength and resilience of our business. Geopolitical and logistics environment, however, remain challenging moving at this current tension. While we have not experienced any significant supply disruptions, ocean freight costs have increased sharply amid the ongoing geopolitical tensions in West Asia. We believe such levels are unsustainable, and we expect prices to gradually normalize over over the medium term.

2:34 Against this backdrop, our diversified geographic presence continues to serve us well. During the quarter, our revenue stood approximately 45% domestic and 55% export. Coming to our individual chemistries, in Chromium, we continue to strategy... Strategically shift our product mix towards higher value added product derivatives compared to base specialty chemicals. This transition contributed to margin improvement during the quarter and allows us to participate relatively less competitive product category. Our Varian business continues to perform consistently with operations running at optimal capacity utilization. We are further investing in our backward integration, which should improve raw material security and enhance product quality for our customer.

3:24 We are also encouraged by the progress in strontium business and expect the business to deliver value in the remaining quarters of the year. In South Africa, we are progressing with multiple activities required to restart operations, including refurbishment, engineering and stability assessments, recruitment, contractor mobilization, and we expect operations to commence during second half of this financial year. Another important initiative in our continued investment in renewable energy and cost efficiency. We are planning to add approximately 20 megawatts of solar power capacity, which will increase our solar power generation capacity, nearly six times from the current level, thereby, the the average power cost will come down significantly over the years.

4:12 Another important... I beg your pardon. Looking ahead, we have multiple growth levers across the business. Upcoming capacity additions in new specialty chemicals, further backward integration in Darien, scaling up of Tranchem and South African operations are expected to support our growth over medium term despite the near to medium term headwinds for global and domestic market due to West Asia Crisis. Our focus remains on being the lowest cost producer in the chemistry we operate and disciplined execution that would lead to deploying capital in value as set to opportunities for long term value. With that, I will now hand over to Hanuman to take you through our financial performance.

5:06 Thank you, mister and good morning, everyone. Let me now take you through the consolidated financial highlights for the q one FY twenty seven results of Vishnu Chemicals Limited. On a consolidated basis, the company reported operating revenues of 433.4 crores in q one f y twenty seven compared to 346.9 crores in q one f y twenty six, a growth of 24.9% y on y. The gross profit for the quarter stood at $1.93.9 crores compared to $1.58.2 crores in q one FY twenty six, a growth of 22.6 Y on Y. EBITDA stood at 65.5 crores in q one FY twenty seven compared to 55.7 crores in q one FY twenty six, a growth of 17.5% Y o Y. EBITDA margin stood at 15.1 in q one FY twenty seven compared to 16.1% in corresponding quarter last year.

6:03 The profit after tax for the quarter stood at 39.6 crores compared to 32.2 crores in q one f y twenty a growth of 23 y o y. PAT margins stood at 9.1% compared to 9.3% in q one f y twenty six. On a sequential basis, the performance moderated a bit due to maintenance shutdown taken in in our VISHNU facility during the quarter. Overall, we are happy to start FY twenty seven on a positive note with healthy year on year growth metrics across key financial numbers. With this, I conclude my remarks, and now we can open the floor for q and a session. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on the touch tone telephone.

6:56 If you wish to remove yourself from the question queue, you may enter star followed by 2. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question team assembles. The first question is from the line of from. Capital. Please go ahead. Yeah. Thanks for the opportunity. My first question is, what is the reason for the sharp correction in the medium segment margins? The margins have just dented sequentially and Y o Y. And what are the sustainable margins in the various segment? Could you please help us with that? Thank you, mister Jetwani.

7:46 Answering your question, well, our business is progressing as per the business plan. And, you know, also the... I mean, with that being said, the EBITDA margins are not impacted in the quarter gone by. There was a one off expense, which was factored in, where the the right prices were retrospectively charged for the last two years. It was an adjustment. There's where there was a onetime impact for the last quarter close to 8 crore rupees. I mean, this will not be a going concern moving forward. Yeah. Good to hear that. And what's the sustainable margins of this segment? We remain to be very positive. You know?

8:32 I mean, the barium carbonate, you know, it's 70% of the production is exported. And also, you know, one of the byproducts, which is coming sulfur, even the the product value has gone up over 300,400% in the last few months. So the blended realizations have improved and will continue to improve because for both the product, bathing carbonate sulfur, bathing sulfur, bathing The demand in what... The environment remains robust. I think I think EBIT... We believe the EBITDA margins will continue to remain at 25% moving forward. Yeah. Good to hear that. And secondly, a couple of quarters back, European Union did announce a higher ADD on the Chinese vendors on the. Has the benefits of that started to flow in any quantification of these benefits? Can you share?

9:25 It's already visible in the EBITDA margins. It's hard to quantify them segment by segment, region by region, but we always look at the vendor realization and overall product mix, ideally, to achieve a 25% return. And so, again, you know, it's always based on the marketing plan and the volume allocation in their various regions to re go by that. We are not focused on a... One particular continent. You get it lot more broadly, domestic US market, Latin America, Far East, and generally how the defined environment is there for these particular products, because most of them are linked to infrastructure growth and real estate in those regions. Yeah. What I was trying to understand is basically the number of inquiries that you may be looking at or maybe hearing at and, you know, any benefits that are visible. I'm not asking for any dissection here, the bifurcation.

10:24 But The benefits are mainly captured in the numbers. Let me put it that way. So we have just... I mean, it it added four, 5% margin on top of the regular pricing what we see in other market. And that we believe will continue. However, there is an headwind in terms of higher logistics cost for the current quarter, which we are trying to see how how much we can pass on and how much we should absorb. So that remains to be a little bit of a challenge that is more short to medium term rather than a medium to long term, I would say. And third is that, what was the revenue from the Strontium Carbonate during the quarter? Could you please help us with that number? 25 crores of the revenue from Strontium for the quarter gone. Right?

11:17 Yeah. And probably. Yeah. Okay. And what's the free cost and the percentage of revenues? For... I mean, as a business as a whole or for Consolidated. Yeah. For the quarter gone by, it's about nine to 10% is the logistics cost, but it is going to change quite a bit for this quarter. It could be upwards of 20% depending on it. Yeah. And last question is our tax rate is slightly elevated since last couple of quarters. Do we see some normalizations here going forward? Good morning, mister.

12:04 I want with you on this. Yeah. So the tax rate in this quarter was 28%, precisely about 28.05%. So on an average throughout the year, last year, FY '27, the tax rate was 27.17%. This is in line with our, you know, tax regime that we follow. Understood. Yeah. Thank you. I'll call back in the queue for any further questions. Thank you. Thank you. The next question is from the line of Rohit from Sunibi Securities. Please go ahead. Yeah. Thank you for taking my question, sir. So on the side, good to see that the EBITDA margins are gradually improving.

12:55 But in this quarter, we have some shutdowns also. So just wanted to know if you can help us with either volume or value, what kind of was impacted because of the shutdown. And if that would have been there, would it be a better furthermore improved margin on on the business? Good morning, mister Rohit. Thank you for your question. Yes. Your observation is right. Overall, the Chromium business performed better in this quarter compared to the quarters gone by. The margin improvement in our stand alone Chromium chemical business was because of two fronts. One was the blended realization for the business improved over the quarter, and that was due to the strategic shift that we have decided to take to sell more of higher value added derivatives such as chromic acid or chromatidin, overall based specialty chemicals such as basic chromed sulphate or sodium dichromate.

14:05 So this has changed the entire product mix for Chromium as a stand alone business, And the the higher value added derivatives contributed to nearly 50% of our sales in the quarter gone by as compared to, say, 40% in FY twenty six as a year. So you can observe that we will be able to improve our overall sales in chromic acid, chromoside gene, and other variants of chromium derivatives. In fact, I would like to add on this that, though we took a a maintenance shutdown during the quarter, we still had inventory that we could sell throughout the quarter, and that did not impact our overall revenues as a whole in stand alone business.

14:55 Got it. Got it. So so coming quarter, we'll have further better top line, and these margins should sustain before any benefit coming in from that South Africa mine. I would request I would request mister to answer this question for you. Yeah. Well, we remain positive for h two, f y twenty eight. Basically, I mean, we are expecting the the Chromite will benefit to fall in from second half of this year. For the current quarter, I mean, there are certain headwinds related to higher seats seats rates, which we are finding it a bit challenging to pass on completely.

15:44 But we are working very closely with the customers and seeing what we can do on that front and also looking at product mix product mixes of where, you know, seat rate will will, you know, there's a margin impact of in freight where we are looking for a higher value added products for this. Okay. Okay. Just on this power cost side as you indicated that we'll be saving some some better on that. So just wanted to understand on an annualized basis, what sort of saving we could be making on this? Like, currently, we are operating a five megawatt solar power plant out of which, you know, the realizable power will be close to 55, 60%.

16:38 And for... From a 20 megawatt, similarly, we'll be able to rest 11 to 12 megawatts. Think saving will be close to 15, 20%. Because, you know, 100%, we are not in a position to use for our power because of the AP Telangana rules. It's certain amount of power should be waived from the discount. But still, there will be a significant savings. Would not be able to quantify at this sensor because we need to see the output and it will be gradual. Got it. Got it. And, sir, on the side, any... I mean, we have seen strong top line.

17:26 So it's a a volume increase in revenue or the pricing relation we have have gained there? Both, actually. I mean, everything is going as per the budget in terms of production as well as the sales planning. Since we remain positive, and we expect it to grow 15, 20% this year in the medium division. Also, at the r and d level, we are looking at what what other value added products we can derive from them, you know, in the near future. Okay. That's it from my side, sir. Thank you. That's okay. Thank you so much. Thank you. The next question is from the line of from Unique PMS. Please go ahead.

18:15 Yeah. Hi. Thank you for the opportunity. So could I just clearly explain the reason for the margins impacting the part, this 8 crore exceptional item? But when I look at and combined, it's combined be able to deliver a 25% EBITDA margin, say, from the next quarter onwards because you mentioned that is at 25%. Mhmm. That's right. Okay. Not not enough combination. So I'm not... I'm talk... We are talking about Paydm and Standard and Standard and and Standard Standard and Standard Standard at the moment. Let me put it that way. It's not... So we need to ramp up volume, improve the yields, and so on.

19:04 So so, I mean, we remain cost even strong, and probably by end of this year, we'll be able to EBITDA level, given the traction from the customers. Okay. So to be clear, for the remaining part of this financial year, I mean, we do control minus stand alone. The margins will still not reflect the complete impact because of some negative impact from Stonesia. It was... Let me put it to say, will still remain over 20% for the console, you know, as... I mean, consolidate... I mean, removing stand alone, combining the VM and structure. It will still remain 20% there. Yeah. Okay. Very clear.

19:49 And and are you still confident about DMSO and chrome metals starting to contribute from next financial year? We do. I think the the... It's as per the plan. I mean, the construction as well as, you know, implementation of the equipment is progressing. So we remain positive that we'll be able to start commercial production by next financial year. Perfect. And just one last clarification. So with with Chromium Chromium, you know, the EBITDA margin improving on that side of the business and medium and short term. So next financial year on a consolidated level, can we look at a 20% EBITDA margin? Because you're very confident on growth part of the business, just on this margin part. Let me throw some light on the business rather than I'll come to the number part later.

20:37 What we are gonna see is more more visibility in terms of business. In the in the in the coming months, we're going to enter into a long term supply agreement for one of our key derivative from oxide to a European client. This will become... Bring a lot of visibility to our to our volumes as well as margins margins moving forward. And this will give us lot more leverage in terms of product mix, what we want to take it up in in the quarters to come. Also, at the same time, this is more...

21:22 I'm I'm talking more on the upstream side. And on the downstream, also the second half... From the second half of the year, we're expecting the promo to come in and the market... It will definitely improve the margin. So margins will improve on not just on account of downstream benefits coming through promo, also through upstream product mix improvement. So with that being said, yeah, we will be... Very soon, we'll be achieving the 20% margin. Will that be next financial year? Yeah. I remain positive to that. Perfect. No. No. That's it. Thank you for answering my questions. Thank you. The next question is from the line of Shivam Gupta from Asset Manager.

22:09 Please go ahead. Hi. Thank you for the opportunity. I want to know, like, audio mainly coming Your voice is not clear, mister Shivam. Can you please listen loud? Is it clear now? Yeah. Thank you so much. Thank you. Initial Storium audio mainly from Indian customer or export? Also, application is the strong... Where the demand is coming strongest from or other? Sorry. I could not get your question. Can you repeat, please? Like, store or the mainly from internal customer or experts. Also, which application is seeing the strongest demand? Mostly, mostly flexible magnet. Sorry? Flexible? Magnet magnet cluster. Okay.

23:00 And the VISHNU Patna plant was short around three weeks during this quarter. What was the impact on production and revenue? There was no impact. Impact was positive because we had some carry forward stocks, which values have increased and have been really impact our margins. Also, given the capacity, what we are having, we we were able to cover up the volumes lost during the maintenance. Okay, sir. That's it from my side. Thank you. Thank you. Participants with questions may please enter star followed by one. The next question is from the line of from Vita family office. Please go ahead. Yeah., good morning, and congratulation for continuously declaring the good results.

23:51 Thank you for that. And my questions are, like, can you throw some light on your mining operation? I believe that the processing plant and mining together will add substantial EBITDA to our Chrome business. So can you throw some light when it will happen? When the first consignment from the South Africa will arrive in the plan so that the forward integration can be done? Good morning, mister. Thank you very much for your question. I did update in update in my opening notes that, you know, currently, multiple activities have been taken up, stabilizing the search as well as engineering and refurbishment of the effort. And we are currently working with the contractors to mobilize things up.

24:43 This year is... I mean, we are we are expecting them... The production to start anytime towards end of this month. With that being said, volumes will start coming from the second half of this financial year. The mining activity is progressing very well. They're currently working on improving the wash plant. Mhmm. Okay. And how is the quality of the promo? It's it's as to what we are using because we have used material from this mine in the past. We don't foresee any challenge. Mhmm. Okay. So from you... Second half of the year, when we start getting the promo from our own mines, what would be the improvement in our gross margin?

25:37 Yeah. It's very hard to, you know, comment on it now because we need to... We have to go by on pricing on on where the market is, you know, in a few months from now. But I can tell you, currently, our gross margins, we are at 44, 45%. Ideally, we will be getting to 50% Right. Okay. Towards end of this year. That will definitely get us to what we are targeting of 20%. Let me put it that way. Great. And, sir, my last question is we have spent close to around, you know, the heavy CapEx last year, $2.40, two fifty, to 300 kind of CapEx. So in which vertical we have done the CapEx and what kind of ROI we are looking at this CapEx which happened last year?

26:26 So we invested this amount into our existing product mix to expand the value added derivative, which is Chromoxetine for which we are anticipating a long term supply agreement and a and a strategic relationship moving forward. Mhmm. Also, if you tie into where the major investment has gone into upwards of 200 crores, this is again a value added derivative and and the first organic product which we are venturing venturing into. Right, sir. Thank you very much for giving me the opportunity to ask the question, and all the best. Thank you. Thank you so much. Thank you. The next question is from the line of Ashish Hirana from ANK Capital. Please go ahead.

27:17 Oh, thank you. Good morning. Firstly, from my side as well for a decent quarter given the context of the overall situation the plant shutdown. And I think hard need to see that on the Chromium side, we are moving to value added products like chrome metal in the future and chrome oxide green. So congrats for that. So firstly, my question was on the astronomy side. So I think we have previously indicated that the gross margins there, we are expecting are in the range of 50 odd percent. But this quarter, I mean, we'll be able to hit that because there were some news that some of the raw materials like, etcetera, had seen spikes. So are you at 50% already, or is there a temporary margin pressure there?

28:11 Good morning. Thank you so much for your question. More than the margin pressure, it's the stabilization phase for our strong chemistry business. It's very hard to say that the current margins that we have achieved in strong are the normalized ones because we are anticipating that as we improve our chemistry, as we improve our operations, the operating leverage as well as the efficiencies will also start coming in in this business. What we can see in terms of market confidence is that our operating revenues itself in q one, like it was highlighted earlier, have crossed 24 crores, which was nearly the entire revenues for the full year last year.

28:57 So as we go ahead, as we as we proceed, you know, see the quarters going forward, we are going to have a better clarity on the gross margin and EBITDA margin that this business will deliver. Sir, correct me if I'm wrong, but I mean, the yearly benefits, the fixed cost benefits, operating leverage benefits would maybe fit below the gross margin line. But on the gross margin, it's there. I mean, are we at 50% or where do we want to be? Are we there currently? Or Yes. That's a good question. So right now, because we have not yet fully stabilized the chemistry, by that, if we can simplify it, the input output ratio that we are anticipating on this chemistry is still suboptimal, which will improve in the quarters to and that will automatically improve our gross margins.

29:52 Oh, got it. Secondly, on the mining side, while you've... The answer to the previous participant kind of hinted on that, But am I correct to assume that the old transfer to India would mostly happen at cost and the profit benefit would fit in our stand alone business and not in the subsidiary. Right? See, we have to follow the transfer pricing mechanism, which is already in place, and we have to look at that aspect before deciding on the price at which the transfer will happen because we cannot have too much of margin sitting in either of these countries. And because the transaction is between related parties, we need to be very clear on the transfer pricing mechanism.

30:39 So whenever there is a trade between our South African entity and Indian entity, it will be asked for the regulatory norms as prescribed in transfer pricing regulations. Got it. That is fair. Just two bookkeeping questions. So on the subsidiary... So on the standalone side, I think, so there was a shutdown. And, I mean, we saw, you know, the costs including the power cost, selling cost, and all that come down. But the manufacturing cost line item on the stand alone side went up by around 200 basis points. I think Correct. Earlier in our annual report, it had labor costs and some other costs. So what was the reason for that, like, for that increase in that line item? In manufacturing cost, one of the line items is also repairs and maintenance.

31:28 And because we had a maintenance during that quarter, there was more spending that was done on repairs and maintenance, which is captured under the manufacturing head. Got it. So one time cost. And lastly, so there is a spike in other income. So is that foreign exchange related or something else in this quarter, sequentially? That's correct. The other income, as you rightly observed, increased as a result of 31% higher exports during q one FY twenty seven in comparison to q four FY twenty six. And as a result of that, we saw higher net foreign exchange gains, It's equivalent to 11.9 crores. Thereby, the overall other income reported in the company stood at close to about 12.87 crores.

32:20 Noted. Thank you. That's it from my side. All the best for this update. Thank you. Thank you very much. Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter star followed by one on your handset. The next question is from the line of Vishnu from Safire Capital. Please go ahead. Hello. Am I audible, sir? Yes, ma'am. Yes, Vishnu, please. Yes. Currently. Yeah. Thank you so much, sir, for this opportunity. A couple of questions. So you said that the revenue growth this quarter has been around 25%. How much of this was driven by volume, and how much of this was driven by increase in the? Your question was not clear, Vishnu. Could you please repeat? Yeah. I was just asking the revenue growth this quarter. If you could just give me a break up and how much of this was driven by volume and how much of this was driven by value?

33:17 So we achieved the total revenues, operating revenues of 433 crores in this quarter. In comparison to q one FY twenty six, that is same quarter last year, we saw increasing revenues because of multiple factors. One is our strontium business is operational now, which is also contributing to the overall revenue as well as value. Our business capacity utilization as it is the blended realizations have improved over the last one year. And overall, even the two main business, we've seen a shift in the product mix, which has led to higher realizations. So it's a combination of both volume increase as well as value increase. Will it be possible for you to quantify how much will the volume by and how much?

34:05 No. As a company, we do not quantify our volume or value growth. Okay. Okay. But we do expect this momentum to sustain, that there was no one? Over a over a long term fundamental, yes, definitely. In the near to medium term, we need to look at the global factors, which also come into play. And those are the reasons why wherein you it's very hard to quantify how a particular quarter will look like. So instead of focus on... Focusing on quarter to quarter variability, we would like to talk about, you know, year on year aspects of our company. Right. Right. And for the short term, so I think that was the contribution this quarter was 25. What is the current utilization there? And what sort of overall contribution from this segment are we looking at for this year and for the next year?

34:58 Thank you for your question. So, yes, we have a capacity of close to about 10,000 tons in this business. We are currently operating at 50% utilization over there. And we would like to end the year at close to about 65 to 75% capacity utilization. Also, as the business improves, as our chemistry improves, we are also going to see better margins flowing in this business. So what should be the total CapEx, sir, for this year? This year, we are... We have a total capital outlay, CapEx outlay of close to about 200 to 250 crores. And could you give a view of where...

35:43 How much will you be spending there? Yes. In DMSO, our total project estimated CapEx is between 205 to 240 crores. Of which, we have spent close to about 68 crores up to June 30. Chromium, we are expanding our derivative base. Almost 50 crores will be invested over there. I'm saying in total, some of that is all already spent in the last year. South Africa business, the capital outlay will be very limited in the range of 20 to 25 crores. Business, we are expanding our backward integration line, and we are likely to see an investment of close to about 40 crores to complete this project.

36:35 Okay. Okay. And just the last thing, sir, on the margins. You said sec... The second quarter, we're expecting margins to go down further because of the paid cost increase. But then in the second half, what sort of margin levels are we looking at? And on a blended basis, five five twenty seven, what sort of EBITDA margin Are you looking at? We are not giving any guidance for the second quarter or the year as a whole. Of course, on a targeted level, we are looking at 20% EBITDA margin. That's our stated target for a very long term. Right? And for that, we would like to see overall momentum from the macro environment also to come into picture. However, if we look at our growth factors, it will be a combination of the CapEx that we will complete through the year, including the one that that we highlighted about launching the new specialty chemical, DMSO, and completion of our backward integration in bearing business.

37:34 Okay. Okay. That is it, sir, from my side. All the best. Thank you. Yes. Thank you. Sir. Participants with questions, may please enter us now followed by one. The next question is from the line of from Agility Advisors. Please go ahead. Yeah. Hi, sir.. I still wanted to understand. I'm sorry to interrupt, sir. Your voice is not very audible. Is it audible now? Yes. This is. Thank you. So we wanted to understand. You mentioned that there will be 20% logistics cost in FY twenty seven. So will they entirely increase in the logistic cost be passed on to the customers?

38:27 We are working on it. It remains a challenging and a sensitive area. Given our relationship, we'll be able to marginally pass it on. Because some of our peers, like, in South Africa and Turkey, they are not impacted by the Red Sea or Hormuz because they... Most of the cargo is going to Cape Of Cold Hope and there's a meditating inside. So in certain accounts, we've been successful. The rest of them, we we are continuously engaged in seeing what we can do on that side. So how much are we expecting an impact on our margins this quarter because of this improving lot of fixed cost, many ballpark numbers, sir? I won't be able to share because we are still negotiating with the shipping lines thoroughly also also with our customers.

39:19 Okay. As a strategy would be some interest. As a strategy, in order to upgrade this impact, we are trying to focus more on the domestic case for this quarter and quarter to going. Right? So we... I mean, our... Both our domestic and exports team are working hand in hand and seeing what volumes are available and going as per the production plan, what we need to tweak for this particular quarter. And we need adjustments because we remain very dynamic even, you know, the environment we are facing. Understood. Sir, you mentioned four different CapExes, DMSO, pro metal, and. Are we expecting all the CapEx to go live by FY twenty eight, or there would be some push forward as well?

40:13 DMSO, yes. I think we are... We remain positive. The CapEx is ongoing as per the plan. Chrome metal, very soon, we'll be... Know, I think we've been going back and forth with this for quite some time, but we we decided to take a call now. I think you'll receive an announcement very soon, which will be a little strategic in nature, which is linked to a long term supplier and a strategic business partnership moving forward. This will definitely change the way our products mix as well as the business will function moving forward in the Chrome and gives us a lot more visibility in that stream both in terms of revenues and margins and gives us lot more leverage in terms of which products to manufacture rather than, you know, depending on lower margin derivatives.

41:08 And sir, given chrome metal By 20 by '28. Okay. And sir, given chrome metal is a bit of a complex material, are we planning any tech transfer or tech type for development or everything will be done inquiring how the r and d? Like I said, I reiterate what I said that you will be, know, getting an update from relatively soon. And, like, it will be linked to strategic long term supply as well as a starting time of business partnership moving forward. We're very excited about this. Let me put it that way. Okay. Understood. That's it. How much I can do? Thank you. Participants with questions, may I please enter star followed by one on your handset?

41:58 The next question is from the line of Yash from Mavira AMC. Please go ahead. Yeah. Hello. Hi, sir. Thank you for the opportunity, and congrats on a good set of numbers. So my question again is around the Chrome portfolio, the long term tire that you spoke about. So one is that it will be margin credit rather than margin diluted. Is that understanding correct, sir? Yeah. Indeed. It's it's going to be margin effective, a, and also gives a lot more visibility because it's tied to a long term supply agreement and a formula driven pricing. Understood, sir. Sir, any... Understood, sir. Sir, any any color around the quantity of the contract?

42:45 I'm afraid not at this juncture because we Okay. Have we have signed an NDA, so we won't be able to talk much about it. But I can say we are very excited. It's going to bring the, you know, good visibility for our Chrome business moving forward. Understood, sir. And, sir, how much CapEx are we doing on the solar project from five to 20 megawatt? The total CapEx outlay for solar will be close to about five to six crores, and the rest will be under the SPV model, wherein we will be able to buy the solar at a fixed price on the longer term. Okay. Yes.

43:30 Understood, sir. Sure. Thank you so much. Thank you. Thank you. To ask questions, please enter star and one. The next question is from the line of Matthew. Please go ahead. Hello. Thank you for taking my question. Am I audible? Yes, sir. You are. Please proceed. Just to follow-up on this supply agreement that you were talking about. When you say that it will give the company a lot of visibility, what what exactly do you mean? Can you can you share a little more? Well, I think we are looking at a a certain fixed volumes for the... Over next ten years, specifically for our chrome oxide green product.

44:27 And this supply will be a binding supply agreement linked to linked to an exchange, plus the incentives, like, the logistics cost and all. Whereas in the current environment, the products, what we do is more on a quarterly, like, on a spot basis of what our peers are doing, whereas this one is lot more strategic in nature, kind of take or pay agreement where we are... Where both parties are obligated, and it gives us a lot more visibility moving forward. Right. Right. Okay. Okay. And just a question regarding the current debt levels. Can you let me know how much debt the company is carrying?

45:20 Thank you, mister for your question. So let me answer your question. We pay tax at full 27% plus tax levels. Sorry. Your question is related to debt? Yes. Yes. How much how much is on the books? Yeah. So our... As for the balance sheet that we've reported ending March 31, The total debt in our books is about 527 crores. That includes a long term borrowings and short term borrowings. This is at a debt to equity level, so 0.49. Okay. Okay. And is that... That's that's for the current quarter as well, including including the planned and CapEx?

46:08 No. We don't share the balance sheet figures on a quarterly basis. So we will be able to update you the balance sheet figures only on... Once our second quarter results come out. Okay. That's that's it. Thank you. K. Thank you. Thank you. The next question is from the line of from. Please go ahead. Yeah. Hi. Hello. Yes. Good morning. Good morning. Yeah. Hi. Good morning. Just a quick one on, you know, how long before we see a massive improvement owing to the starting of your mine in South Africa.

46:57 We see no improvement in the gross margins whatsoever. So is it it likely to come from the second quarter or any timelines on that? Thank you for your questions, David. Like I said, the gross margin improvement would be function of both upstream and downstream, like I mentioned. No. Just just a moment. Because when we took over such a big asset, the idea was that this gives us a reasonable protection in terms of gross margin behavior. But nothing is visible whatsoever. So what is the endeavor?

47:43 Because if if you cannot prove improvement in the gross margin, then the whole acquisition goes for a toss or the the very basis of acquiring and creating such a long period means that the capital allocation has not played out the way it was in with us. So can you quickly comment on this? Yeah. We look at it slightly differently because, you know, this is a new line of activity, and and the timelines are more or less really looking at, I think. The acquisition has been completed in November 2025.

48:28 Thereafter, it took two months to transfer. And like I mentioned, it takes time to refurbish and organize the manpower and so on. So, yes, I agree there is a delay, but, no, not to an extent where it takes the alarm. So we we still remain positive, and things are progressing very well with respect to mining. And the product, what we are seeing on ground, seems to be suitable for our production. With that being said, we are expecting the material to to start going into India from some... From the third quarter of this financial year. Now if you ask me how much... Will that include the gross margin by 50% right away from 44? I think partially, yes, it will get closer, but it it will be hard for me to quantify exactly when it will be when we'll be getting to 50%.

49:20 Ideally, towards the end of this year, that will be a combination of both upstream as well as the downstream support. Upstream in terms of this product mix change as well as downstream the promo policy. Because as you know, currently, promo being a commodity and price play a very big impact. Even the moment cost within South Africa from the mine field of plan, the cost have gone up. No. By far, but your relative advantage still remains. Right? Our relative advantage still remains, but it's hard to quantify how much. But definitely, relative to our peers, yeah, we we we do remain competitive. And what will be retained in the business, what will be passed down to the customer moving forward, we need to take a strategic call.

50:13 Okay. No. No. But you... I think, know, if you create the operation of the standard on basis and the mining is also a function of the quantities what we produce, where the unit economics play a very important role. As we go up If I... Well, I think the entire thesis was that it gives us the... No. No. It it gives us the full position in whatever we are doing. So entire thesis was of acquiring this mine was only that. Right? Yeah. That it gives you competitiveness against the Chinese and puts you in the top echelon of the cost curve. And hence, any vagaries of any any variety can be smoothened out or will be reasonably reasonably bypassed in a way. Yeah. The question is the scalability which we are which we are going to do in the second half of this year. I think I'll be able to better answer your question towards end of this year on when we would be able to get 50%.

51:19 I think I'll come back to you with a with a clear answer. Let me put it there. No. But that's on track. That's the That's on track. That's the reason I'm saying that I have to see the volumes coming out. I have to see the the the scalability happening, which we which we remain positive. Right. Secondly, after... On your barium bisulfite, which was, you know, you you took time for you to see that with the paint guys, Again, only one of a kind manufacturer. Again, that also seems to not have given any advantage, or is it still pipeline in the works? Or can you just I'm seeing it. I mean, mean, it's already visible in the numbers. Since it's a it it... You know, we are not quantifying and we... Actually, we don't in terms of what product, what is the margin.

52:12 But it's it's as per the plan. And I think in in terms of demand visibility as well as customer approvals are already in place, both in the domestic and export market. And during our last call, I also The mentioned the only number did mention did mention about increasing the volumes moving forward, even that plan is on. Yeah. But with due respect, two things that we have done for positive incremental gross margin impact don't seem to be working. So what is pulling it down? Is there a certain category where we are losing the margin capability or... Which you can... Only you can highlight? I would say... Well, I mean, the... Generally, the demand environment for Chrome, especially the leather industry, continue to remain challenged.

53:11 But what I mentioned that moving forward, product mix would change even in this quarter. It was visible. It's not that we are gonna do away with our basic home sales rate, the better volume, but we're gonna bring that volumes down sequentially over the year. And our our focus will remain to be on chrome oxide, mainly going into chrome metal refractory segments as well as chrome acid going into functional gating. And once we we move in the direction which we are, there's been lot more... There's been improvement in the gross margin. It's what we And lastly, what... I just joined the call.

53:57 Can you enumerate and for the... Sorry for the repetition, but can you enumerate what are the different things that we would be now looking to, you know, deploy capital or incremental CapEx towards? Yeah. We are we are we are investing close to 360 crores into CapEx. Bulk of this investment is going into dynasty sulfoxide. Over 200 crores being invested into this product again an important placement. It's a solving going into pharma and agro industry. As well as in order to meet this long term agreement, we are enhancing our chrome oxide green production at our plant itself. Made by more sodium dichromate will be used into producing chrome oxide green moving forward.

54:48 So close to 350 growth is going into this. Okay. And over and above, certain CapEx will be happening in our finances for some improvement. That's what that will be margin. Okay. Thank you. Thank you so much, and I'll come back in detail. Thank you. Thank you. Thank you, Thank you, mister. Thank you. Participants with questions, press star and one. As there are no further questions from participants, I hand the floor over to the management for closing comments. In conclusion, kindly note that our results, earnings release and investor presentation have been uploaded on the stock exchanges, and they will also be available on the company's website.

55:40 If you have any questions, feel free to connect with us on investors at the rate Vishnu Chemicals dot com. Thank you everyone for your valuable time. Thank you very much. On behalf of MTA Global Financial Services Limited, that concludes this conference call. Thank you for joining, and you may now disconnect your lines. Thank you.