Vishnu Chemicals (NSE:VISHNU) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to Vishnu Chemicals Limited q two FY twenty seven conference call hosted by MK Global Financial Services Limited. 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.

0:29 Please note that this conference is being recorded. I now hand the conference over to Mr. Durgan Dixit, MKO Global Financial Services Limited. Thank you, and over to you, sir. Yes. Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Siddhar Chirukuri, Joint MD and Mr. Hanmad Pansali, VP, Finance and Strategy. I shall now hand over the call to the management for the opening remarks. Over to you, sir. Good afternoon, everyone, and welcome to second quarter earnings conference call FY 'twenty seven. We are pleased to report another quarter's steady performance building on momentum established during the first quarter and reflecting the resilience of our business amid a challenging global operating environment.

1:25 During the quarter, our consolidated operating revenue grew by approximately 7% Y on Y basis to INR $4.30 crores, while EBITDA increased by 10% and profit after tax grew by 8% on a year on year basis. First half of FY twenty seven, we delivered revenue growth of over 15% accompanied by similar growth in profitability. Geopolitical situation, particularly in West Asia continues to impact international shipping and freight market. During the quarter gone by, our shipping and forwarding expense increased to 8.8% of operating revenue compared to 5.9% in the preceding quarter of this financial year.

2:11 We have been able to sustain our operating margins despite continued pressure from elevated logistics costs and uncertainty in the end user market. Our ability to serve both domestic and international market also provides us with greater flexibility in responding to changing market dynamics. Coming to our individual chemistries. In our chrome business, we continue to focus on improving our product mix through a shift towards higher value added specialty derivatives. This remains an important part of our long term strategy, enabling us to strengthen our competitive positioning and improve margin profile in the coming years. We are also pleased to share an important strategic development in our Chromium business.

3:00 During the quarter, we entered into a joint venture agreement with BCX Chrome, France, to establish a manufacturing facility for high purity chrome metals in Vishnu Capatna with a proposed annual capacity of 6,000 metric tons of chrome metals. This initiative represents a significant step in our strategy of moving further up the value chain and expanding into specialized chrome products. Our barium business continues to remain an important and stable contributor to our operation, and we continue to achieve solid cash flow generations. We remain focused on strengthening its cost competitiveness through operational efficiencies and further backward integration, And also looking at other value ordered products which can be used in the MLCC and other battery applications in the related chemistry.

3:52 In Strontium we continue to focus on scale up operations, expanding market opportunities, and improving contributions from this business.

4:01 Strontium carbonate will progressively strengthen our diversified specialty chemical portfolio. Alongside these initiatives, we remain committed to improving our energy efficiency and reduce our dependency on conventional power sources. We plan to add approximately 20 megawatts of solar power capacity, which will increase our solar power generation capacity to nearly six times from current levels. Our diversified product portfolio, balanced geography, revenue mix, increased focus on value added chemistries, and ongoing investments in forward integrations provide us with multiple avenues for future growth. With that, I will now hand over to Mr. Hanuman to take you our financial performance for quarter in a greater detail. Thank you.

4:51 Over to you, Hanuman. Thank you, and good afternoon, everyone. Let me now take you through the consolidated financial highlights of Vishnu Chemicals Limited for Q2 FY twenty seven. The company reported steady year on year growth in Q2 FY twenty seven, supported by higher revenues, improved operating profitability, and growth in domestic sales. On a consolidated basis, the company reported operating revenues of INR 429.53 crores in Q2 FY twenty twenty seven compared to INR 401.15 crores in Q2 FY twenty twenty six, representing a growth of 7.1 on a Y o Y basis. Gross profit for the quarter stood at INR207.79 crores compared to INR172.8 crores in corresponding quarter last year, a growth of 20.3% on a Y on Y basis.

5:49 The consolidated EBITDA stood at INR64 crores in Q2 FY 'twenty seven compared to INR58.2 crores in Q2 FY 'twenty six, a growth of 10% on a Y on Y basis. EBITDA margin of the company stood at 14.9% in Q2 FY 'twenty seven compared to 14.5% in the corresponding quarter last year. Profit after tax for the quarter stood at INR35.57 crores compared to INR32.88 crores in the corresponding quarter last year, reflecting a growth of 8.2% on a Y on Y basis. The PAT margin of the company in Q2 FY 'twenty seven stood at 8.3%. On an half yearly basis, the company reported operating revenues of INR 8 and 62.3 crores in H1 FY 'twenty seven compared to INR 748.06 crores in H1 FY 'twenty six, delivering a growth of 15.4% on a Y o Y basis.

6:47 The consolidated EBITDA stood at INR 129.49 crores in H1 FY 'twenty seven compared to INR113.92 crores in H1 FY 'twenty six, a growth of 13.7% on a Y on Y basis. The EBITDA margin of the company in the first half of FY twenty seventeen stood at 15% compared to 15.23% in H1 last year. The profit after tax in H1 FY twenty seventeen stood at INR75.21 crores compared to 65.11 crores in H1 FY26, a growth of 15.5% on a Y on Y basis. PAT margin of the company in H1 FY27 stood at 8.7%,

7:31 similar to H1 FY twenty six last year. As of 09/30/2026, the company's consolidated debt to equity stood at 0.67 times, while debt to EBITDA stood at 2.8 times. We are also pleased to highlight the recent upgrade in the company's credit rating with ITRA assigning a stable rating to our long term banking facilities compared with earlier A minus rating by Care. This represents an important milestone in our financial journey and reinforces our commitment to prudential financial management. The company maintained a well diversified geographical revenue mix, with domestic sales contributing 58% and exports accounting for the remaining 42% of consolidated sales.

8:17 The company's balanced domestic and export sales mix provides a natural hedge against rising international freight and logistic costs, helping to partially mitigate their impact on overall profitability. With this, I conclude my remarks, and we can now open the floor for q and a session. Thank you. Thank you very much. We will now begin the question and answer session.

8:52 We have first question from the line of Sagar Dehwani from Philip Capital PMS. Please go ahead. Yes. Thanks for the opportunity. Our export sales is down on a Y o Y basis. Because of the supply chain disruptions, have we lost any sales during the quarter? And also if you could quantify the amount?

9:25 Good afternoon. Well, yes, logistics, particularly towards the West, which is Americas and Europe, has remained a challenge. But it's slowly, I mean, subsiding, and we are witnessing some improvement in this quarter. And hopefully by quarter four, it should come back to the levels where it should be. Particularly for our base I mean, for your question related to where our impact is coming from, mainly on the base cargo for our leather business, where the freight plays approximately 20%, 25% on the overall selling price. That's where we have seen the volume drop. Otherwise, other value added products like chrome oxide, chromic acid, and dichromate, and even barium chemicals, you know, we were not impacted.

10:20 So what was the lost sales, during the quarter? And is it the permanent loss, or will we be seeing the recovery in q some of the spillover that we can potentially see?

10:32 Definitely. I would say q four will be, you know, more realistic than q three, because typically customers look at, you know, five to six months of a contract. And we remain very positive. And in fact, we see I mean, it actually helped globally to increase actually absolute selling prices as well. So I think we are expecting the volumes for this particular business to come back in quarter four.

11:02 And what was the value loss?

11:06 Value loss, I would say, would be $20.30 crores a quarter. 30 crores, $25.30 crores a quarter. Understood. And as per the historical trends, q on q margins in both Chrome and, you know, businesses both have been volatile. So what's the optimum margins that we can expect going for the... Going for the future?

11:31 Can there be a consistency be maintained going that... Considering also the fact that we have been backward integrating, these businesses?

11:40 So what's your thoughts on the margins consistency? We remain, optimistic in spite of current challenges related to logistics and general market conditions. We are expecting especially The U. S. Market to improve by Q4 or early next year. So the volume growth, we are seeing good volume growth coming during this year, and we remain more positive in terms of, you know, gaining more customers, increasing the volume in the existing customer in that part of the world. And it's also value effective that way.

12:19 So so you expect some directional improvement in the margins. That's... Is that understanding correct? Yeah. I I mean, yes. The... We expect the direction improvement in the margins and also the change in the product mix, which we are anti I mean, and besides, is also going in the right direction. We are going to focus more on our oxide business and asset business for the next year. And for especially oxide business, we have a clear purchase order from our partner in Europe. So that's definitely going to add to the revenue and give us a lot more visibility. Chromic acid, especially in India with the infrastructure growth and the automobile industry outperforming, is also we are seeing a steady growth.

13:10 And we continue to have 60% to 70%

13:13 market share. The domestic market remains resilient. Export, I think with the product mix change it's definitely going to improve both the top line as well as the gross margins moving forward.

13:27 The backward integration, we are expecting the promo to start coming and to see the benefits in the quarter four of this year. I think it's very much in line. So I think all the factors put in together, I think we are definitely expecting a better next year and targeting 18 to 19% EBITDA margins for next year. Good to hear that. And just recently, we have, you know, shut the plant in VISHNU. That's a temporary plant closure that I'm talking about, which effect from October 20.

14:03 Has the plant started? Is the forward integration complete now? Will there be any potential loss due to this temporary shutdown? Or, we were ready with some inventory in advance, that was maintained accordingly?

14:17 Well, the... I mean, there's no business loss, which means that, you know, we we have enough inventories, both of starting as well as value added products. So there won't be any business loss per se. And, you know, we had a strong cyclone, actually two cyclones in that part of I mean, that part of Andhra Pradesh. So we thought it's better to take a planned maintenance and do the connection to complete our ongoing CapEx, and it actually worked out quite well. And we are planning to restart the day after tomorrow. And, you know, on this UAE based subsidiary, are winding up. So what's the cost for that, you know, winding up the subsidiary?

15:04 Is... When when are we incurring it? It's not very significant. Let me put it that way. Okay. And this JV with DCX Chrome, when can we start expecting the revenue close? Have we engaged in the client? What's the timeline for sample supplies?

15:27 Some thoughts on that would be helpful again. I think, I mean, we've already started shipping to their facility in in France. So we do have a clear purchase order for next few quarters, And the product is already approved. This is to their facility which is an established facility in France. And about our project, I think we are targeting Q4 of next financial year to start the first phase of production in Andhra Pradesh for chrome metal. And last bit on the CapEx this year and next year, what what are the CapEx plans?

16:08 Mister Sagar... Mister Sagar, sorry for the interruption. Please join in the queue for the more question. Yeah. Sure. Thank you. Thank you. We have next question from the line of Nirali Gopani from Unique PMS. Please go ahead.

16:27 Yes. Hi. Thanks for the opportunity. My first question is on the Stonsium part. So last quarter, we had mentioned that it contributed roughly crores of revenue, and the profitability is not what we would have expected. So it is stabilized now. And what was the contribution for this quarter?

16:49 Good afternoon, mister Niraji. I request you to repeat your question. My question is on Stontium carbonate. So last quarter, it contributed roughly INR25 crores of revenue, but the profitability is not what we would have expected. So, how has it changed this quarter? If you can give out some numbers, how much did it contribute and the margins? I won't be able to share the revenues, of the strontium carbonate business as of now, but, the numbers are very much similar to last quarter. The positive, thing is that, we have started getting, major approvals from customers in India. Some of them who were completely relying on imports for the requirement of strong carbonite.

17:35 So that is a positive that we take from here, and, we are quite opt... Optimistic about this, product that, in the in the quarters to come, it will start contributing at a higher level to our overall consolidate... Consolidated figures. Okay. So... But by by... When do we expect it to reach the 25% of EBITDA margin by next year?

18:00 We have not given a guidance on the EBITDA margin for Stronchium Carbonate. But, yes, on a capacity utilization, we expect it to reach its optimum level of 70% by next year. Okay. Okay. And the premium part of the business will continue with this EBITDA. Right? There is no change there. We don't expect any change on that side.

18:22 See, the premium business is doing reasonably well because over there, we have completed both the backward as well as the forward integration. So at a gross block of close to about 375 crores, we are seeing EBITDA which is quite... You know, we we have already recovered the payback of significant amount of gross profit that we invested in the medium business. On the EBITDA margin front, you know, it all depends on a lot of factors, including some of them which are not in our control, like the macro factors. So we are expecting that the margins to sustain provided, you know, the markets remain stable. Fair enough. And do we plan to do any CapEx on the side? What is the capacity utilization there currently?

19:15 The capacity utilization is close to about 70%. And right now, there are no other plans of CapEx in variance... Bearing business. Okay. And and the logistics cost, which was... You know, you had guided in the last quarter, which would... We were expected to reach about 21... 20% of the revenue. Have we been able to pass some of it, and how do we see that, you know, over the next two quarters now?

19:42 So good question and quite correct. Our overall logistic cost as a percentage of export sales was about 20.9% in the current quarter. That is due to f y twenty seven compared to ten point seven percent of the export sales on a consolidated basis in q one f y twenty seven. So there has been an increase, but we have, balanced it out by focusing more on domestic market in q two. And, that's where you have seen that, our overall contribution from domestic market is 58% in q two f y twenty seven compared to 45% in q one f y twenty seven. Okay.

20:30 Yeah. Fair enough. That's it from my side. Thank you. We have next question from the line of Kausha Sarma from Uni... UniRock Capital Venture Private Limited. Please go ahead. Hi, sir. Very good afternoon. Am I audible? Yes. Good afternoon. Question is on your program that you have just announced the JV with one of the partners. So could you tell me what kind of amount have you invested in this so far? And could you explain some unit economics in terms of EBITDA margin, CapEx, and asset term, and overall industry, overall time of this particular segment of this market? I can share you part of the information which is not confidential, I mean, about the product. So we are we are going to manufacture chromium metal and and related grades, which is going into aerospace as well as defense and nuclear power industry. It's also used in welding electrodes.

21:40 Currently there is no manufacturer for chromium metal in India and most of the requirement in India is met through imports. So the... This this seems to... This is a very attractive proposal. Hello? Hello. Yes. Yeah. And so what kind of EBITDA margin can we expect from this in the... Certain in this? Right now, we are... We won't be able to give any guidance on that because, again, it's a very volume driven thing, can say. That since it's a higher value added product, I think the gross margin to EBITDA, there is, not a significant delta, which means that we are looking at upwards of 20% EBITDA margin in this particular business given the value of the product.

22:26 Can you highlight on the industries, like, what kind of demand in India and world and what what are the key geographical mix in the world with with this product? May I ask for the latest statistics? For the last two years, I think there's been over 17 to 1,800 tons imports of chrome metal into India. And it's growing close to 12 to 13% year on year basis. So yeah, I mean you'd say around 2,000 tons of demand in India. But I think what... I think along with that, partner, what we are targeting is 60 to 70% of the production will be exported. 60 to 70%. And currently, it is more or less coming from the China?

23:14 It's coming from Europe. It's coming from China. Okay, sir. Got it. Thank you very much for answering. Thank you. We have next question from the line of Silesha from Samixa Capital. Please go ahead. Hello. Yes. Good morning. Hello. Good afternoon. Hello? Hello. Mister., are you line and unmute? Please respond. Hello. Am I audible? Yes. You mister, your line is breaking. Come in, range, please, for... To speak.

24:08 Yeah. Now it should be audible. Am I good? Hello? Yeah. Better. Please go ahead. Yeah. So my question is on cash flow. So our inventory and receivables have increased, if I compare with the last year first half and even the full year. So if you can help us understand the reason behind that. Mister, I request you to repeat your question, please. Yeah. Just a minute. I hope now I'm clear. Yes, please. Yeah. So inventory and receivable days, my question is on that. So that has increased if I compare them with the first half last year and even for the full year. So if you can help us understand the driver behind that.

24:57 Thank you so much for your question. The change in inventory days is predominantly because of macro environment, the higher logistic cost and uncertainty due to geopolitical situation globally. At the same time, our receivable days has remained quite similar to what it was last year at this point of time. It's not gone up significantly. It was a sixty two days last year in... As of September twin... Thirtieth two thousand twenty five, has gone up to about seventy two, seventy three days now. So... But this situation will subside over a period of time because we don't think this environment is going to last quite long. So in the short to medium term, we are expected...

25:42 We we expect that the overall situation will stabilize, at least from where it is... Where... What we have seen in q two, and that also will reflect in the numbers going forward. Understood. And if you can give us on a CapEx side, so we have done a significant amount of CapEx in the first half. So what is the guidance for the full year and next year as well? Yes. One second. Total CapEx outlay is, around 524 crores. And so far we have incurred close to INR 190 crores and that's already reflecting in our balance sheet in the form of increasing debt partly and partly it's coming from our contribution as well. So, yeah, the further we have 300 crores of plan.

26:39 Okay. And what about next year? Twenty years? Yeah. So next twelve months, we are going to, spend 300 crores. Okay. Understood. And if you can help me under, give me some numbers on utilization. I think you talk, talked about Barium, but not about Chromium side? Yeah. Yeah. We are over 75%, and and and and similarly in barium as well. Understood. And we were looking to add some capacity on the chrome side, I think, by 10,000, ton. So what is the status there? Yeah. Mostly, we are looking at the, capacity addition in the value added products like chromic acid and chromoxide three.

27:27 And our sodium dichromate capacity expansion has already completed. So we are at 90,000 tonnes. Okay. Understood. Yeah. Thank you so much. Thank you. We have next question from the line of Prasad Vanishad from Union FM. Please go ahead. Mister Prasad, your line is muted. Please respond. Mister Prasad? Hello? Yes, sir. Please go ahead with your question.

28:15 Am I audible? Yes, sir. Yes. You're audible. Can you speak speak louder? Yeah. Yeah. So am I audible now? Yes. Are you audible? So so, Siddharth, there are two questions from my end. Firstly, on the existing business on the side, if you see Mister Prasad, you are not audible. Okay. Am I audible now? No, sir. I'll join back the queue. I'll dial up on. Thank... Sure. Thank you. Thank you. We have next question from the line of mister Praveen Gala from Vaiwara AMC LLP. Please go ahead.

29:06 Hello? Yeah. Am I audible? Yes. Good afternoon, sir. Good afternoon. Thank you for the opportunity. So my first question comes for overall CapEx cost and capacity. Maybe we are looking to build up for each product maybe by metric tons if you can give us some idea on that, maybe a peak turnover or a capacity realization which we can expect. Sorry. Your voice is not audible. Hello? Yeah. Is it audible now? Yeah. Better. Yeah. So my first question is overall CapEx cost and capacity built up for each products, maybe by metric ton and the realization which peak turnover, we can expect?

29:58 If you can just throw some light on that. Good afternoon, mister Paransk. Thank you for your question. So on the chromium metal joint venture, as stated earlier, we are setting up a capacity of 6,000 tons of high purity chrome metal. The plant is going to come up as a greenfield expansion in Vishakapatnam. I won't be able to share the exact realization. Too early at this stage. But globally, if you see the index of pool metal, it... It's... It trades at close to about 10... Say, 10.1 to $10.5 per kg, which is approximately 1,000 rupees per kg.

30:47 On the dimethyl sulfoxide plant, which is expected to commence operations in q one of FY twenty eight, we are setting up a capacity of 10,000 tons per annum. And on strontium chemicals, we have already set up a capacity of about 12,000 tons per annum. And next year, we are targeting, utilization of 70% in our second year of operations. On chromium chemicals, further, are adding specialty derivatives, like bromothiazide, green, chromic acid, which will be approximately 30,000 tons in total.

31:34 So bromocide green will be approximately 20,000 tons of incremental capacity, and bromoc acid will be about five to 6,000 tons of incremental capacity. So this is our overall mix of expansion in terms of volumes. Right. Thank you. Just to understand... On a better understanding, are the products sold at spot rates or on a long term contract specifically for the aerospace? And what are the margins we are looking out in that segment? We will be tier two kind of a supplier to the aerospace as well as the defense industry, I would say.

32:27 Mainly, this is used particularly as a anticorrosive agent to prevent any high thermal stability issues in the engine as well as the propeller. Just to give you an idea, around two twenty kgs of pro metal is used in an Airbus three twenty engine. I mean, just to give you a perspective on where and how much it is used. Yes. In terms of margin profile, again, it's too early and it will be very much volume driven. We run through the business plan along with our partner. I think the gross margins as well as EBITDA margins, even at a 60% operating level are looking very strong.

33:15 That's great to hear. Sir, any plans for future expansion into electrolytic chromium metal maybe from aluminothermic electrolytic process? Electrolytic chromium metal... Well, I mean, as you know, we're starting off with air melt grade. Okay? From air melt grade, also, by going through vacuum furnace, we can produce a quality of product which is similar to electrolytic chrome metal. The reason why we we choose an aluminum ceramic process is more energy efficient, whereas electrolytic process is very high on energy.

34:02 Through this process and one step forward, which we will take probably year two years down the line, we can achieve the same electrolytic metal quality through aluminum ceramic process. Right. So one more question. How volatility on the prices front for our products we are seeing with the current scenario and maybe the... Going forward? We are witnessing more volatility related to the steel trade, especially since we are, you know, all the Asian bound exporters, including India, China, Vietnam, and all of the Far East countries are experiencing higher seat rates towards the end.

34:51 That's the current challenge. In terms of end user market, especially in India, it remains quite resilient. Europe remains relatively strong. And given the factoring in that, you know, we'll be shipping more chrome oxide to our, you know, partner in Europe in coming months. So our share of oxide and, I mean, outside India, Europe will be contributing this year to our revenue. US also remains promising. We have achieved some good customer wins over the last few quarters and having a good visibility from our marketing team for the coming quarters.

35:43 The volatility, I think it's more to do with the raw material, like, you know, energy related costs, which has impacted in the quarter gone by, as well as one of the key raw materials like sulfuric acid and sulfur. Also, has been a significant impact that impacted that market. I think we see more volatility when it comes to raw materials and energy costs rather than the end user market and the price again. We take the next question from the line of Ankul Arora from Sagun Capital. Please go ahead.

36:33 Yeah. Hi, sir. Thanks for the opportunity. Most of my questions have been answered. I have just one question on the progress of South Africa or mine. If you could just share some light on that. Good afternoon, mister Anupul. Yeah. In South Africa, we continue to work as guided towards operational readiness for our processing plant. We are already taking a lot of measures towards commissioning it at the earliest possible and with teams from India, South Africa, and UK working on it. And there is due emphasis on operational safety, reliability, and consistency of the output that comes from the processing plant.

37:18 The mining operations has already started, and we are seeing some very good output. So once the processing plant begins, we are targeting to ship the material in a quarter to India. Okay, sir. So any timeline by which quarter or by which year should we expect by next year, FY '28, or by when should we expect this? Yeah. So next year will be a year where we will see significant, contribution from the operations in South Africa. And we would like to start, commencing the shipment from South Africa to India from next quarter onwards. That is q four onwards. Okay. Got it, sir. Thank you so much, sir. Thank you.

38:06 You too. This... Thank you. We have next question from the line of Mr. Darshid Zawari from Crown Capital. Please go ahead. Hello. Thank you so much for taking my question, sir. Firstly, congratulations on a decent set of numbers in a challenging environment. Sir, I just wanted to understand in terms of, h two outlook in revenue, how do you see it as... Because we've lost some export sales, but that might bounce back. So what would your full year revenue target be, sir? Good afternoon. Thank you so much for your question. More than the loss of sales, it is a diversion.

38:55 You know, we have a very balanced market mix in both domestic as well as export markets. So in certain quarters, you will see export outperforming the domestic and vice versa. In the half yearly details that we shared at the beginning of this call, our company has already reported a growth of 15.4% on a Y o Y basis compared to last year. And we will continue to work on the same metrics and deliver a strong overall, annual performance in FY twenty seven. Yeah. Fair enough, sir. But, because growth had moderated slightly in q two, so I just want to understand, will q three also have some moderation and pickup from q four, or do we see q three as a normalized quarter, sir?

39:44 Sorry. Early for us to comment on, the number one. That number. Just a, you know, qualitative statement from you. Like, is it traditionally... Is... Yeah. Or if it's been a month since q three, they're just starting like q two, or are they normalizing if it just attract also helps? Yeah. It it is. It seems to be on a positive trend compared to q two, and, you know, we hope that the next two months are more productive than the quarter gone by. That... That's helpful, sir. And so I just wondered, I think earlier in the call, you mentioned FY '28, 18 to 19% in return. I'm sorry. Was that for the consolidated business or for a specific segment, sir?

40:32 In the earlier call. No. Earlier today in the call, I think you were mentioning 18 to 19% EBITDA in FY twenty eight. I don't know if I heard it correctly or not. FY twenty eight. Yes. Next year. So that's consolidated on the sec. Yeah. Yeah. So for the first half of this year, we have delivered a 15% EBITDA margin. And if you see, nearly 3% increase has been there in the logistics cost on a quarterly basis. So we expect that to subside in the quarters to follow. That will help us inch back to about 17 to 18% in the year to follow. And we'll get some benefit from our backward integration. Right? So that will also help. Combination of... Yes.

41:19 A combination of both backward integration and forward integration due to a change in product mix that will, you know, overall improve our margins. Oh, okay. That that... That's great. That's it from my side. Thank you so much, sir. Yeah. Thank you. Thank you. We have next question from the line of Mehta Liti from Allegity Advisors. Please go ahead. Hi, sir. Thank you for the opportunity. So I just wanted to understand. You said that mining will start... Will be there by q four. So is there any reason for further delay by a quarter or so?

42:07 Well, I mean, we remain very positive. I think, the mining is happening, quite well. We are we are seeing good output. We are in the final phase of, you know, commissioning the verification plan and getting the write off. Okay. So verification is still the bottleneck there? Reason for it to go beyond quarter four. Okay. And you just mentioned that you are expecting the 3% margin to 18% in q four, and 3% would be from logistics. But given the backward integration Yeah. So that was a guidance for next financial year, not q four, I mean. Yeah. Yeah. I am asking about next financial year for FY '28. So you said that 153% logistics cost should inch back, but given that we are backward integrating, shouldn't the margin expansion be much more than the expectations?

43:03 It should be because we have also product launch happening next financial year, which is dimethyl sulfoxide. And also with the change in product mix, you know, the revenues on a stand alone basis will also improve. Yes. So that's why I was asking that. It should be about 20. Sorry? Okay. No. So that's that's why I was asking that given that forward integration will be there, backward integration is shaping up. So, Strontium will be adding a good good utilization. So it should be more than 19, 20% is what I was asking. It is very much possible. I mean, again, we'd like to be cautiously optimistic.

43:51 Okay. And it could be... I mean, our our target, I think, what was in the horizon is 20% on a consolidated basis. We might as well achieve that. You know, remain very positive and optimistic that, you know, if things fall in place, mean, meeting our 80% to 90% of our requirement, DMSO stabilizing within a quarter or so. A very interesting product, again, an import replacement story. And also oxide plant coming up and improved shipments to Europe, all falling in... I mean, putting all into... I mean, if everything falls in place, yeah, I mean, could be close to even 20%. Okay. Understood. Thank you. Thank you.

44:41 We have next question from the line of Dave Mehta from Unique DMS. Please go ahead. Yes, sir. So I just wanted to ask for our DMSO business, what could be the EBITDA margin? And in what period of time do we look at utilization of, let's say, percent, 75%? Any time lines on that? These are... This... I mean, for Vishnu Chemicals, this is our, first venture into organic chemistry. We remain very excited. And we're expecting, you know, two to three months of stabilization should be should be enough. And for product approval also will be gradually happening.

45:30 I think the first year, we are targeting close to 60 to seven... 60%... 50 to 60% of operating level. I think ideal because, you know, even the customer approvals have to fall in place during that period. Okay. And the margins will be similar to, Barium, 25%? I mean, this is not the right mean, I won't be able to comment, like I said, at a 50, 60% operating level, and we have to wait and see how things pan out. Probably this time next year, I'll be in a better position to have a give you a visibility on how things are moving and so on. Got it. But upwards of 20% is what we target, right, for this particular product? Well, I mean, one of the key raw material is is coming from our billion plant.

46:22 Oh, okay. And and the other product, you know you know, I think the gross margins, we we... Again, we... When we run through the business plan and when we see the raw material cost is is only 35, 40%. So I think at the gross margin level, it's looking very promising. Again, at what volumes the economy does change will define our EBITDA margin. Got it. And just two more questions. One is, you mentioned that INR $5.24 crores of CapEx was the spent. Is the total spent, out of which INR 190 odd crores was? INR 1 crores. Yeah. INR 190 crores is spent, and we have about another INR $3.30 crores to be spent over the Got it. 12 So how are we going to find that? Are we going to take more debt?

47:10 And what will be the peak debt level for our company? So our current debt level is at INR717 crores, including working capital. And we... It'll be to $808,120 crores. I... You will see this capitalized over the next year, and rest is coming from internal receivables. Okay. So our peak debt will be 800 to $8.20 crores is what you're implying. Right? That's right. Okay. And this $5.20 odd crores of CapEx includes your DMSO, chrome metal, chrome oxide green, chromic acid. Anything else apart from this?

47:58 It's not including chrome metal. Chrome metal, is it... I mean, it's including DMSO, chrome oxide. And it's not including chrome metal because that's a separate company, and it's fifty fifty JV. Okay. If you can just give a broad bifurcation of this $5.20 crores. Just wanted to understand. Yeah. About $2.50 crores for DMSO and 220 crores for oxide. Okay. Expansion. Okay. No. Fair. That answers. Thank you. That was the last question from the participants.

48:49 I now hand conference over to management for closing comments. Over to you, sir. Thank you, everyone, for taking out today. In conclusion, kindly note that our results have been uploaded on the stock exchanges and the company's website. The investor presentation and press release will follow. If you have any further questions, please feel free to reach out to us on investors at the rate vishnu chemicals dot com. On behalf of Vishnu Chemicals Limited, we wish you all a very happy Dipauli. Please take care of yourself and your dear one. Thank you so much for your valuable time. Thank you. Participants on behalf of Mplay Global Financial Services Limited, that concludes this conference.

49:39 Thank you for joining us, and you may now disconnect. Thank you.