Archean Chemical Industries Limited (NSE: ACI) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Ranjit Pendurthi — Managing Director
Natarajan Ramamurthy — Chief Financial Officer
Rampraveen Swaminathan — Managing Director
Rajeev Kumar — Deputy General Manager of Finance
Analysts:
Sanjesh Jain — Analyst
Vinay Nadkarni — Analyst
Rohit Nagraj — Analyst
Aditya Ketan — Analyst
Dhruv Muchal — Analyst
Rushabh Shah — Analyst
Ricken Shah — Analyst
Rohit Sinha — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to arkin Chemicals Industries Limited Q3FY26 earnings conference call. As a reminder, all participants line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ranjit Pandorti, Executive Vice Chairman of Arkin Chemicals Industries Limited. Thank you. And over to you sir.
Ranjit Pendurthi — Managing Director
Thank you. Good morning everyone. A warm welcome to all of you joining our Q3 and nine month FY26 earnings call. Thank you for taking the time to be here with us today. On this call we are joined by Mr. Ram Prameen Swaminathan, Managing Director, Mr. Natarajan Ramoorthy, CFO Mr. Rajiv Kumar, DGM Finance and SGA team, our investor Relations Advisor. First update is on the changes in the senior management team. Further, the board has appointed Mr. Ram Praveen Swaminathan as the Managing Director of the company. We would like to welcome him to the RCN team. Ram Praveen Swaminathan has over 28 years of experience in business leadership, operations and strategic transformation across industrials, energy and manufacturing sectors.
He has led large scale growth technology enabled transformations and operational turnarounds across multiple geographies and industries. He has most recently served as the MD and CEO of Mahindra Logistics Limited where he repositioned the company as an integrated technology driven logistics provider and significantly scaled its revenues. Our colleague Mr. Kannan has decided to move out of the company due to personal reasons. I would like to place on record our thanks and appreciation for Mr. Kannan for his contributions to the company. Mr. Kannan will continue to work closely with Ram and myself over the coming months as part of the leadership transfer.
We are at a very exciting phase in Arkin Chemicals businesses across the range of businesses we operate and to further lead this exciting phase of growth, Ram has agreed to come on board and lead the management. I will now hand over to Ram to provide an overview of the business performance. Thank you.
Rampraveen Swaminathan — Managing Director
Good morning everyone. And thanks Ranjit. I am pretty excited to be joining the team as we focus on developing the organization and scaling up our businesses further in the future. I’m also looking forward to engaging with our investor community including all of you on the call today and taking your inputs and insights as well on this journey. I hope you all have had a chance to go through the financial results and the investor presentation which is available on our website and the stock exchanges websites. I will provide a quick summary of the overall business performance and then hand it over to Natarajan for a quick financial summary and then revert back for the Q and A and closing comments.
So starting with just an overall market market environment, you know over the last we have been working operating in a mixed market environment driven by some level of uncertainties over the past three to four quarters. While the early indications of improvement, we expect the rest of this year last year to be one of stabilization and the operating environment to normalize as we move forward. We are closely tracking developments across the proposed India US and the India EU FTA which could and platform to create new opportunities for the Indian specialty chemicals exporters over the medium to long term.
The India UFT and other regional trade agreements will provide long term tailwinds for the sector. Though it has limited short term impact on our operating segments during this period our focus continues to remain firmly on strengthening the fundamentals of the business, driving focus growth in a accelerating operational excellence, deepening our customer partnerships and capability across the enterprise. A continued focus and acceleration on this will ensure that we are well positioned to benefit from these initiatives and other macroeconomic drivers which we believe continue to remain extremely positive for our company and the sector as a whole.
Coming more specific to our own performance. As we have mentioned in prior earnings calls as well, the overall business performance in the first two quarters was challenging with results imparted by multiple issues including erratic monsoons, logistics disruptions in our area of operations, some technical issues in our plant operations and lower crude prices which kind of impacted rig activity and affected some of our end markets. We’ve also seen a mixed environment on pricing with continuing pressure on industrial salt prices but favorable movements on bromine. On a positive side in the quarter we just completed, I think price salt pricing was stable and that’s kind of a good trend as we look forward.
Increasing bromine prices have also put pressure on margins in the derivatives segment and demand for some of the downstream products. Despite these challenges, I think we were able to capitalize on some of the tailwinds and drive stronger momentum. In the third quarter we saw a healthy demand in the industrial salt segment which showed strong volume growth year on year and also year on year growth in derivatives which partially offset weaknesses in other segments, most specifically the bromine business. On a consolidated business, the company has reported 11% year on year revenue growth for the nine month period and for Q3 specifically, our revenues on standalone operations grew by 12% and consolidated operations grew by around 10%.
I would say growth was limited for us in as much by operational factors as by the market and I talk about them a little bit more as I cover segmental performance going to the specific segments and I’ll start off with Elemental Bromine. Demand for bromine continues to remain strong. During the first nine months India was a net importer of Bromine with stable to positive trends globally as well as domestically. In terms of demand. Short term pricing trends have also remained favorable and we continue to have a very healthy order book and are seeing positive traction with our customers.
We’ll also continue to see growing demand internally from our derivatives business which is a cum and overall I think we believe we remain very well positioned from a market perspective and from a demand side we definitely think that the volume growth is likely to continue to happen. Our engagement with clients remains strong and they continue to support us. And obviously this year and next year we expect Bromine cap consumption from our captive operations to also drive further growth. During the quarter, as in prior quarters, I think our performance remained constrained by operational challenges and disruptions.
These did continue to improve. Some of the challenges we had in Q2 did impact us in early Q3 as well. We have launched several improvement projects which we expect will help us get back to steady state in Q4 and then we’ll further try to scale up operations in the coming quarters. For the quarter, Elemental bromine contributed approximately 24% of standalone revenues and for year to date it has been approximately 29% of our consolidated revenues. On industrial salt. During the quarter we sold approximately 1.1 million tonnes of salt, reverting back to our quarterly run rate of more than a million tonnes.
The segment contributed nearly 70% of standalone revenue and for the nine months our volumes are now about 3 million tonnes with demand remain robust despite the moderation in prices. Sequentially, Q on Q pricing has remained stable and we expect that to continue in the short term. We have a strong demand visibility and our long term contracts. Our customers continue to be in good shape so we continue to expect to scale this business up with some seasonal uptick in Q4 and continuing kind of expansion of operations as well on sop which I think just continues to extending from what we had covered in the last quarter.
Our pilot stage trials have been completed successfully during the quarter we have worked towards progressing from pilot to plant scale trials. The site is ready and we are on the verge of commencing plant scale trials and expect meaningful contributions from this business. In the in F27 especially the latter half of F27. As you have stated repeatedly, we continue to believe and have strong conviction that SOP has significant potential for the business in the long term. And our challenges in that business has been obviously around changes in feedstock given brine quality. And those are the technical changes we are making in the plant operating system now which should, when successful will kind of position us well to start scaling up operations again.
On bromine derivatives which is essentially in a cum. Our operations are up and running. We’re currently at around 30 to 40% utilization. We have around 40 reactors and month and month they change but generally on 30 to 40% utilization. Global uncertainties and obviously lower crude oil prices have impacted rig activities which has further impacted the oil field chemical market demand. On the supply side, price increases on bromine have also increased cost pressures. However, we are engaging with clients availing certifications and approval and expect the volumes to start scaling up. We continue to focus on product development.
We have around 15 new products in pipeline which are at different stages in terms of customer trials and completion and this should help us, we believe 50 to 60% utilization in the coming quarters. We in the past mentioned about the flame retardant bromine project, so a quick update on that. We are the project evaluation phase there and we’ll provide a more detailed update on that as we make progress in the current market. Environment is kind of mixed there, so we are trying to evaluate the feasibility of offset business and how quickly we can scale volumes up.
Now moving on to our strategic initiatives, especially in what I call the advanced material space broadly on the semiconductor side. During the quarter, our Semicom business initiative through SYSCEM continue to make strong progress. As you’re all already aware, SYSCEM is among the 10 projects approved by the Union Cabinet under the Indian Semiconductor mission. The finalization of the fiscal support agreement with the Indian Semiconductor mission is currently underway and is expected to be completed soon, which will then give further finalisation to the overall funding framework. Execution on the ground has already begun. The 25 acre site in 4 Valley Bhubaneshwar has been allotted and we held a groundbreaking ceremony on that at the site in November 2025.
Land leveling is complete and we are right now going through topographical survey and soil test before we start any construction activity. Along the same time we’re also kind of investing in developing our go to market strategy, finalizing our supply partners including for FAB design, EPC and project execution. And overall we believe the project is well positioned. From a timing perspective. We are on target right now in terms of our internal schedules and from a medium to long term perspective, we continue to believe that this is very well positioned to not just enhance our own business but also I think contribute meaningfully to India’s emerging compound semiconductor ecosystem.
We’ll continue to share this is a long gestation project so we’ll continue to share updates with all of you as we move to the next phase of execution. Our energy storage business which is the other strategic initiative we have as you know we have invested in Off Grid Energy Labs, a zinc bromide battery innovator with a robust IP portfolio of over 50 patents and more across cathodes, anodes and separates operators. In May 2025 just to remind everyone, we successfully acquired 18.14% but the remaining commitment expect to be completed over the coming period. The company as an Off Grid Energy Labs plans to set up a 10 megawatt hour demo manufacturing facility in the UK.
The work has already started and is progressing well with the R and D for the next generation stationary solutions kind of underway. Again this is a project we continue to keep you all updated of progress in the coming quarters. Overall, if I kind of looked at summarizing at a summary level, our business fundamentals remain strong and robust. Our marine chemicals portfolio is well positioned with high product quality, strong customer acceptance and continued focus on strengthening our cost position year to date we had some challenges operationally due to some external factors and operational factors really in the bromine business and of course some external issues around pricing on the industrial salt side.
But we are remain focused on recovering this in coming quarters. Longer term investments in advanced materials are on track continue to position us well for the long term. So I’ll now hand over to Natarajan to provide a more detailed financial summary for the quarter and for the year to date and then you know I’ll come back for the Q and A and the wrap up.
Natarajan Ramamurthy — Chief Financial Officer
Natarajan yeah, thank you and a very good morning to all the participants on the call. We are pleased to report a notable performance for the quarter gone by to give you a summary of Q3 and 9 months FY26 on a standalone basis. Let’s start with Q3 FY26 performance. Total income for Q3 FY26 stood at 2608.1 million 2.4 increase on a year on year basis we have shared the revenue and business mix in the investor presentation for better understanding. Our business mix is as follows. In Q3 bromine contributed 23% of the total standalone revenue and the Industrial Salt contributed around 77%.
Sale volume of the business are as follows. Volume sales of Bromine for Q3FY2.6 stood at 2403 ton. Volume sales of industrial salt Q3FY26 stood at 1.1 million tonnes. EBITDA for the company stood at 698.6 million in Q3FY26.25% decline on a year on year basis. EBITDA margin stood at nearly 27% for the quarter. Increase in expenses were largely due to increase in logistics cost, new employees and other overhead costs from the new units. Net profit of Q3FY tradition stood at around 343 million coming to nine months performance. Total revenue for nine months stood at 7840 million.
7.4% growth on a year on year basis. EBITDA stood at 2,416 million. 10.8% dip on a year on year basis. Net profit is 1,246 million. 1.6% decline on a year on year basis. On a consolidated basis, Q3 and 9 month performance stood as. Total revenue Q3 FY26 stood at 2615 million. Bromine derivative 142.1 million. EBITDA for the company 613.5 million. And the net profit 240 million. 9 month performance. Total revenue 8016.7 million. EBITDA 2001. 66 million and net profit 931 million. With this we conclude this speech and open the floor for Q and A.
Rampraveen Swaminathan — Managing Director
Thank you Natarajan. We’ll now open for Q and A and I request the moderator to kind of facilitate the same.
Questions and Answers:
operator
Thank you very much. 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. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. And you are also requested to limit your questions to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanjay Jain from ICICI Securities. Please go ahead.
Rampraveen Swaminathan
Good morning Sanjay.
Sanjesh Jain
Good afternoon. So quickly I got couple of questions but before that just data keeping questions. Natarajan sir, can you repeat the revenue for acums for Q3 SOP and volumes for both?
Natarajan Ramamurthy
Yeah, sure, sure. One second. Q3 only, right?
Sanjesh Jain
Yeah.
Natarajan Ramamurthy
Q3 Q3 total quantity is 799 metric ton and value is in. Okay in 137 million and for nine months ended.
Sanjesh Jain
No, for SOP. No, no. Nine month. We got.
Natarajan Ramamurthy
SOP one.
Sanjesh Jain
Yeah. SOP volume and revenue.
Natarajan Ramamurthy
Yeah. SOP Q3. Once again. Okay. It is Q3 is 71 metric 10. Okay. And value is 751.
Sanjesh Jain
Okay.
Natarajan Ramamurthy
No, no. 71. 71.
Sanjesh Jain
Okay. Okay, okay. And value is.
Natarajan Ramamurthy
Value is 32 lakhs.
Sanjesh Jain
Okay. 0.32. So. So now coming to the questions, you mentioned in the initial remark that you are seeing pressure on the bromine derivative. But on the other if I look at the bromine prices, they have really shot up. Now both really doesn’t add up. If there is a pressure on the derivative, how can the elemental prices go up? Or if there is a. Or there is some supply constraint which is driving this broken prices. How. Should we read this commentary together?
Rampraveen Swaminathan
No. So I think my comment was that we obviously had the increase in bromine prices obviously spring cost pressures on our bromine derivatives business. And what I mean by Sandesh obviously is that given the specific products we are making right now and the way that the contracts are not all of the cost increase is something we pass through to our clients. Right. So you’re seeing this trend where obviously bromine prices are up. I mean very favorable for us if our volumes have been better on the bromine side. But that increase is also putting cost pressures on the elemental bromine.
Because. And that’s why you have seen in the accumul side we’ve had to enhance our product development efforts towards new products. And also we’ve seen some downtick in our revenues because we’ve had to kind of adjust volumes in some of the products where we had a higher cost impact.
Sanjesh Jain
No, I got it. There are only three product which significantly take away the bromine volumes globally. Now what we are telling is that the derivative pressure is specific to the rk, not to the industry.
Rampraveen Swaminathan
Right then yeah, it’s specific more to our products. That’s why I made that comment that currently our current product portfolio has a longer tail on that. Which is why I mentioned we are in the process of accelerating the 15 products we have in the pipeline.
Sanjesh Jain
Very clear. Second, on the bromine last quarter we mentioned that we have a 10,000 metric ton of backlog. The production really not keeping up. Just wanted to understand how much of this backlog is with the lower pricing which may hurt us because we are not fulfilling that and probably may have to fulfill them in the future. And number two, that means the realization we will be in the catching up game. And number two, what really is happening on the production side, can you help us understand when we say the technical problem, what we really mean? Technical problem?
Rampraveen Swaminathan
All right, so let me answer the first question first. I think we. So we have much of the order intake we had, you know, is roughly at the same price. It’s still very much still there someday. So I think the 10,000 ton or nine and a half thousand ton backlog we had at the end of last quarter, we obviously shipped approximately two and a half thousand tons of that. So we have still around 6,500 tons in backlog. We’ve not seen a significant amount of cancellations there. We are obviously reviewing by contract with our individual customers on what we can do to reprice those contracts.
If I had to give a simple headline message, I think there will be some carry over the next one and a half quarters or so, but we hope to then reset to market pricing over the next couple of quarters. So there’ll be some carry in it. I don’t have a more specific answer at this stage. Happy to revert back to you. A little bit more detail there, but that’s just like a headline view on the operational side. I think what’s really happened is, and I think Ranjit and Kannan may have spoken about this a little bit last quarter’s call.
You know, we’ve obviously had a fair amount of weather changes over the last six months and flooding and kind of weather changes have meant that the brine quality, which then kind of drives the feedstock quality has changed in terms of composition. That has meant that we’ve had to make some changes in our brine field operations to kind of. To kind of ensure that we are enhancing the feedstock quality. We’ve also had to make some changes or improvements in the operation in the plant itself to be able to kind of manage a wider range of brine or input feedstock.
So we had a trailing effect of that. Essentially throughput came down because of that last quarter as well. And we had a trailing effect of that in the first half of this third quarter as well. We then obviously launched some improvement projects that also resulted in some time off because we had to kind of make changes in the system. We ended the quarter getting back on a positive trend. And that’s why I mentioned that I believe that in the coming quarters, in the short earlier rather than later, we should be able to get to a steady state.
Steady state, to remind you in my mind is kind of what last we did last year. Last couple of years we made at the 18,000 ton kind of level. And we want to get back there and then obviously our goal is still in the medium, near to medium term to try and get to the 25,000 ton run rate.
Sanjesh Jain
Got it, got it. So we had a capacity of 42. Why are we targeting only 25? That there’s a disconnect between the capacity we have and the production we are targeting.
Rajeev Kumar
Sanjay, Rajiv here. Hi, Sanjesh. So see, as we have previously mentioned in our call, the capacity expansion will actually primarily happen between 25 and 42 in line with the capacity expansion in the derivative position.
Sanjesh Jain
Okay. So. So as we put up more derivative, only then we will be able to extract more or we will be extracting more raw and probably.
Rampraveen Swaminathan
Yeah, that’s a headline. That’s overall.
Sanjesh Jain
No, but, but just want to understand on the derivative side, there’s a sharp drop in the volume. How do we plan to ramp it up? And I think we are lagging significantly in terms of what we thought we can do. I know the market conditions, but can you help us understand how should we look at FY27 for us?
Rampraveen Swaminathan
Yes, I think just to answer the question more clearly, we are right around 35 to 43 to 40% utilization. So first the plant is first target for us is to kind of get the utilization up. The second thing I think is that the product mix we have, we have essentially three to five products which are running most of the volume. Those are things which you would like to kind of move away from or change the mix from, away from that. So that’s the two big focuses right now is to get the right product mix, get the right level of penetration with customers.
The potential is there. Even though markets are a bit soft, I think the potential is there. And we have, we started the quarter with around 5, 6 products in the pipeline, Q3 and as we speak right now we actually expanded products to around 15 products which are now in trials and going through kind of customer acceptation, acceptance, validation and so on. So that’s kind of the focus is to kind of expand the product portfolio and repeat with the portfolio and appreciate towards better yield kind of products for us. What does this translate into? Math? I think for 26, 27, as I mentioned earlier, we are trying to scale it up to 60 to 70% utilization at a plant level.
And of course that will move day to day or week to week based on which reactors we operate. But just from an overall throughput perspective, to get to that 60 to 70% level, that’s the product portfolio I’ve been working on and I Think we see that step up Q1Q it won’t be A. It’s not a one time switch but over the next couple of quarters you should start seeing that scaling up.
Sanjesh Jain
No, that’s great, thanks. Thanks for answering all those questions. So patiently understood. Flip for the coming quarters.
operator
Thank you. The next question is from the line of Vinay Nadkarni from Hathaway Investments Private Limited. Please go ahead.
Vinay Nadkarni
Yeah, good afternoon. I have just one basic fundamental question. I when I’m looking at your company for the last what, seven, eight quarters now the. Whether it is orange hydrocarbons, whether it is, you know, your bromine derivatives, whether it is bromine also or sop, everything gets delayed as the quarters go by. So every time there is some kind of a delay that is happening. Is there any management bandwidth issue that you have which is impacting this?
Rampraveen Swaminathan
I think, I don’t think that would probably so firstly every company has challenges around management bandwidth, scale up operations but I would be an oversimplification of the issue. I think the very specific challenges we’ve had so obviously bromine we were at a good run rate prior as I think we were at 17,18,000 tons. We are looking at run rate of around 25 and then as you mentioned earlier to do a kind of minor brownfield expansion to take it around the target of 40,000. We’ve had the setbacks which we talked about earlier and I think we have good bandwidth on the ground which is why we’ve been able to make these changes within 1/4.
It’s a continuous process manufacturing plant and we’ve been able to make changes in fact without any major shutdowns because we have fairly good bandwidth on the ground. Industrial salt volumes are growing and therefore we are so in that part of the business I think there are headwinds but there’s no challenge around bandwidth. The idealist investment was projected saying that it will take us multiple quarters. As we had got the assets out of nclt we had to make stepwise changes. There are issues in terms of local ecosystem challenges and so on the good thing and so there’s.
It’s not that we don’t have bandwidth, we don’t have team working on it. It’s just I think the nature of the program which we had and we always I think bore caution to the fact that given it’s an NCLT asset buyout it will be a staged recovery process and not an overnight kind of scale up. Three plants are now operational. We have to take these products actually have a long customer certification Cycle. It’s not a commodity product like salt and therefore it does require a fair amount of customer approvals. So three plants are up and running now.
We are in the process of scaling it up on the accumulated side and the derivative side. Yes, I think that’s a piece which has been, I think we are to execute that a little bit better and those are changes which we are making. Right. So I think. And a lot of that is around product development. We’ve accelerated that over the last quarter and we are continuing to focus on accelerating that this quarter even further. Right. So that’s a piece where back end is really solid operationally. We are in. The plant’s in great shape. It’s very good, it’s got great operating metrics.
But the demand side has been scale up has been weak because we have had to kind of rework our go to market and our product portfolio and that. I take your point and that’s what we are working on right now.
Vinay Nadkarni
Yeah, my observation was also on SOP because that is one high margin product that you have and which has got a good demand also. But somehow quarter after quarter we see delays getting, you know, a little too frustrating now.
Rampraveen Swaminathan
You know, our conviction and sop. So our conviction on SOP still remains extremely strong. We’ve had maintained that now for several years. It’s a complex technical issue and it’s not the lack of our resources committed to it or the capability of those resources. We have strong resources partnerships globally. But it is a complex technical problem which takes time to solve. I think we are now getting close to a point where we think we have, I would say a more enduring fix. We have been trying to do many short term fixes which obviously have not given the yield we expected.
So we are now at a point where I think we have a more enduring fix. But it will take us a few more quarters to get there.
Vinay Nadkarni
Thanks, thanks a lot for that answer. Looking forward to a brilliant F27.
operator
Thank you. The next question is from the line of Rohit Nagdaj from 361 Capital. Please go ahead.
Rohit Nagraj
Thanks for the opportunity. So first question is in terms of the contracted volumes for bromine. So if you can just help us understand how much is maybe a medium long term contract and how much is Spock? The perspective that we want to hear is whenever there is change in bromine prices, whether we get that advantage or not. Because I think last year also it happened sometimes in the month of April, May, bromine prices went up, but it was not reflected in our performance. In the last couple of months now bromine prices have gone up beyond $5,000.
So when we will be able to see the tangible benefit in the financials. So a broader perspective in terms of contracted spot will also help us.
Rampraveen Swaminathan
So I think, I assume you’re there in the earlier part of the call as well when I answered part of this. In some ways I think we have around six and a half thousand tons of fusion of contracted backlog. But that’s not backlog which is like only for 1/4 or 2/4. It’s kind of spread over a period of time and we have a mix of both spot and contract price. So we have obviously the balance of both long term contracts and short term contracts in the mix. I think the challenge for us is about the production side of it.
Obviously when the production side has been trailing, we don’t have enough bromine coming out to actually balance both those customer sets. And we do have to make strategic calls given our customer relationships. And that’s probably the reason why you may not have seen some of this impact at least this year. I can’t talk about last year, but this year’s perspective and I think as I mentioned we will probably see a trailing impact on some of these contracts for a couple of quarters. The exact impact of it will also be a function of how much we’re able to get through into our system in terms of production.
So at this stage, I mean that’s probably the best input I can give you is that I do think we will see that the contracts will have a impact over the next couple of quarters, but they should probably, the longer term contract should probably depress in probably 50 to 60% of our volume and not more than that.
Rohit Nagraj
Okay, so, so once these, I mean just a clarification on this, once these long term commitments are over, what could be the optimal mix in terms of maybe a medium long term contracts and spots just to get an advantage of the spot market as and when otherwise.
Rampraveen Swaminathan
Yeah, let me come, if you get this whole, let me come back to you specifically on that. I don’t have, I don’t have a perfect answer on that right now. Right. We’re still kind of reviewing some of this as well, but, but I will try and reach out. Somebody from our team will reach out to you separately outside this call. Sure, sure sir.
Rohit Nagraj
Thank you. Thank you. So second question is, in terms of next year, given the constraints that we have on domain, is there a fair chance of reaching at least the 18,000 tons of production which includes both the element sale as well as for our captivity.
Rampraveen Swaminathan
So simple answer.
Rohit Nagraj
Yes, perfect, that’s helpful. And one more question, I just want to squeeze in Oren. We had indicated that there have been delays in terms of the revenues next year. What is the reasonable number that we can put? 100 crores. 150 crores based on the current understanding of where we are.
Rampraveen Swaminathan
As a matter of rule we don’t give guidance and I think. Right. So but what I would say I think is on the cum side I was very specific, we do expect we’ll get to a 50 to 60% capacity utilization there. On the orange side of the idealist side, I think each, as I said, we are still in the process of scaling up plants and operations. So at this stage I’d probably defer answering that question. But if you can pick that thread on it next quarter I’ll probably be able to give you better insight on it.
Rohit Nagraj
Fair enough. Thanks a lot for answering all the questions and all the best, sir. Thank you.
operator
Thank you. The next question is from the line of Aditya Ketan from Smith’s Institutional Equities. Please go ahead.
Aditya Ketan
Yeah, thank you sir for the opportunity. Just a couple of questions. So on the bromine side today, so climate change is quite visible as you mentioned, like there was some bad weather impact and it seems nowadays like even a smaller wind comes it takes away our volumes. So sir, just putting things in perspective, how many months or days of lost volumes we can build and what is the sustainability of the numbers which you have given of 25kt? How should one put faith in the numbers like this Bad weather impact wouldn’t be there in the coming fiscal so one to two years.
And how should this play out like in the longer run?
Rampraveen Swaminathan
No, I think the weather impact is two things. Obviously in some extreme cases it can result in a total shutdown of operations. But the largest set of issues we’ve had is more more about adapting our systems to it. When these changes happen they obviously change, you know, the flow of feedstock and the chemical capabilities of the system. I’m reasonably confident that I think we should. We are, we have solves on most of this implemented now. This, you know there is clearly a roadmap to get to that 17,000 number. As I mentioned to the earlier to earlier that we are a simple answer.
We will be north of 18,000 tons next year. Right now the goal is to get to a run rate of between 18 and 25,000 at which stage we obviously have to do some expansion work and we’re hoping that the Derivatives bromine business will also start scaling up meaningfully at that stage so we can actually make that step up beyond 25. Right. But I don’t think this is, this is, this is a flash in the pan thing that Internet happens. You know, we just end up having going sideways. There is, there are technical things which one has to do to solve the problem and that’s what we have taken care of now.
And you should start seeing that coming, coming through in our, in our results as well.
Aditya Ketan
Onto the bromine derivative side we had clearly witnessed like the business has not been able ramp up quite steep. Just I want to know, like you mentioned earlier also like there is the demand is not that great today. So is that also related to the higher bromine prices? Because. Because the feedstock prices are higher. Consequently the CBF and PT synthesis prices are also higher which is where you might not been able to pass on or the demand itself like in the global world that is muted today.
Rampraveen Swaminathan
No. So let me just state this. Overall just several of you might be interested. I think, I think medium to long term demand on the derivative side is pretty good. Short term demand across categories is also fairly stable and improving. Our challenge has been in scaling up the business has been in some of the specific products we make and diving penetration with the end user accounts. So that there is obviously there is supply side pressure which we have to either optimize for our own cost of operations or different customer contracts pass it through to our clients as well.
So this is not an enduring, this is not that kind of a challenge. What we have to, and the steps we have taken obviously is to kind of refocus a lot on getting the right product portfolio and increasing the speed at which we are getting products out. So that’s been the big pivot we have to accelerate in the business. I think if we get the product expansion out and accelerate the customer acceptance cycle, we should be able to get there. So obviously we are I think probably 12 to 18 months behind. I don’t have exact number because I’m still trying to figure out some things.
But I would say that whatever duration we are behind, a lot of this has just been how could we execute here? And that’s what I kind of commented earlier on that to the person who asked me do we have a bandwidth issue? I think this is one area where we could have executed a little bit better. But we have put the fixes in, now we are putting some more fixes. So we should be able to get this back on stream in F27. I won’t say that’s going to happen in Q1 of F27 but from an under perspective through the year we should be able to get to that 60% ish kind of capacity utilization.
Aditya Ketan
Got it. Just one last question. Considering the recent geopolitical tensions between Israel and Iran, is there any sort of. Is there any. So while talking to customers, are they hinting about so diversifying from Israel to India volumes because Israel chemicals like which is the biggest player in Israel, is there any sort of like if these things turn out there could be some short term supply chain issues. Supply issue and customers are looking more towards India, towards other players. Is there any sort of like things you’re talking in. And secondly sir, if you can also highlight the global supply, is there any new player which is entering or existing players looking to expand the supply in China and in other countries that would be helpful.
Rampraveen Swaminathan
Yeah, I think some supply will come up, you know, globally probably next, next year or so with expansions probably in Australia. Right. Somewhere towards 27 or so. But again these are organic changes which do continue to happen. From a demand perspective, I think our focus markets have actually been around Asia, South Asia and East Asia and we’ve not heard any significant re pivot. Demand still is stable and growing and therefore I don’t think anything to be concerned about in that sense. No immediate upside as well because of the way global supply chains work. In our focused markets we don’t see anything dramatically changing.
I think we’ve heard from our customers at least.
Aditya Ketan
Got it. Thank you.
operator
Thank you. The next question is from the line of Dhruv Muchal from HDFC amc. Please go ahead.
Dhruv Muchal
Yes sir. Thank you so much sir. One of the challenges in the bromine production I believe as you have mentioned in some of the previous calls, was also as you’re focusing some bit on the sop. So as you’re confident of the recovery in bromine from next year also can you highlight how the SOP trajectory could be. I understand it’s still on the planned trial stage, probably starting soon, but some early trends. If you can share something on that.
Rampraveen Swaminathan
I think our pilot trials, these are very independent programs as you know obviously and the pilot trials have been successful, the chemistry works. We have been able to ensure that we are getting good yields out and from a quality perspective we are good. We have the plant scale trial somewhere in this quarter or early next quarter. We kind of got the plant ready. That’s one of the reasons why probably volume has been lower in Q3 because we’ve been getting Plant ready. But we should. I think it’s hard for me right now to give a specific number if that’s what you’re looking for.
Okay. I think once we finish the plant trials, probably in April or May, we would be in a better sense to see what kind of ramp up will be required. You know, we also have to, because we have to understand what kind of modifications we have to do at a plant level. And we have a preliminary sense obviously of what has been done. But we’ll be able to confirm that only after we do the plan trials. And that’s when we’ll be able to give a far clearer view on what the project, the projected throughput will be.
You already know the capacity number, so that’s been out there in the public world for a long time. So the goalpost is known to everyone. Right. We just have to come back with a more specific ramp up plan which we’ll share with you as the plant trials get completed.
Dhruv Muchal
Sure. Thank you.
Rampraveen Swaminathan
And so the second question I just want to highlight, obviously you know, we look at an F27 perspective. There will be plant modifications, modifications etc to be done. Once the plant trials are successful, we’ll have to make some modifications of plant. So hard right now to say even know what the F27 impact will be. A couple of you have asked that question. So I just want to kind of recalculate, clarify that.
Dhruv Muchal
So but just to confirm, probably clarify these plant trials do not have any implication on the bromine production because now that can happen.
Rampraveen Swaminathan
No, no, no, nothing. They’re independent. They’re independent value chains. There are a lot of shared infrastructure on utilities and so on in the business. Right. And on the, on the feedstock side. But operationally they are very different.
Dhruv Muchal
And so the second question was on the flame retardant project. Now I think if I could have missed. But the project earlier you had mentioned about 12 months for the project. I think in the commentary you mentioned earlier that the project you’re relooking at the project now this was to be a downstream project which could have taken some of the virgin bromine. Does it have any implication in terms of how you ramp up your. Assuming this project is on hold for now, does it have any implications on how you ramp up your elemental bromine now?
Rampraveen Swaminathan
No, I think what I mentioned was that we are evaluating the project feasibility and not the viability. Right. So we are going to continue to work on flame retardant. It’s only that we are working through the project details and working on that. It has no direct impact on our ramp up plan. So the 60 to 70% growth, the utilization I had talked about. Right. That has got. That is something which we hope to achieve in either case.
Dhruv Muchal
So the near term happens. For the example, FY27 happens. FY28 also happens because of your other downstream bromines. But assuming this project, I’m not sure, still not very clear. Is this project on hold or not on hold?
Rampraveen Swaminathan
No, it’s not on hold, it’s not on hold. It’s just that we are working on it in a fair amount of detail trying to ensure that we launch the product properly and that we have a clear ramp up plan which we deliver on. Right. So that’s. And that’s kind of what we are working on in a very detailed project plan. Like I talked about what we did in Cischem 6M at a high level, we talked about 6M in more detail but very similar approach here as well. We’re trying to do the project planning in a lot more detailed way and ensure that we are fail safe execution looking at margins, returns, product mix, etc a lot more carefully.
And that’s why the execution is taking longer period of time. But it’s very much on. It’s not on the back burner, it’s not off the burner, it’s very much on the.
Dhruv Muchal
Okay, so because if I just. I was looking at 2Q conference details you had earlier mentioned, it can come online in 12 to 18 months. So assuming by end of 2Q so end of FY27ish somewhere, does that timeline still remains or still remains. Okay, got it. Okay, so basically you’re just reconfiguring the product.
Rampraveen Swaminathan
Okay, that was the update I guess and they were working through the, the project details and that’s all it is. Let me give you an update because as you mentioned in Q2, that’s why we gave an update this quarter.
Dhruv Muchal
Got it. Perfect. Great. Thank you so much and all the best. Thank you.
operator
Thank you. The next question is from the line of Rushab from RBSA Investment Managers llp. Please go ahead.
Rushabh Shah
Hi sir, thank you for the opportunity just to you know, get a more sense on the weather impact that we have over the years.
Rushabh Shah
So you mentioned that we’ve done some fixes currently. I just want to understand next time. The bad weather itself, does the impact. Remain as same as earlier or now? We’re better off now.
Rampraveen Swaminathan
Bad weather is a very broad statement but as I said, I think what does bad weather do to us? I’m just going to Repeat what I said earlier. Bad weather can either have impact on just operating environment or it can just have an impact on the brine fields and overflowing, etc. Can change that. I think technically we’ll be in a strong position to manage those kind of challenges going forward. Right. I mean, if you have a cyclone or something which requires you to kind of temporarily take safety measures on operations, that’s something which, you know, I don’t think anything which any fixed we could have done is sort of protect against that.
But on the feedstock, the brine fields, et cetera, and what higher levels of rain or floods etc do to that, those are things which I think we’ve put in the fixes to try and get strong process control and be able to manage that. That range of width. Sorry, go ahead.
Rushabh Shah
Yeah. Given that we have so much on our plate right now and just want to understand on the senior management and. The mid senior management bandwidth. So are we done with hiring? What is the progress on that so. That next time as industry divisions appear. We don’t falter again. We just want to understand on that.
Rampraveen Swaminathan
Sense is the team up and running organization. Let me give you a perspective of someone who is very new to the job. Right. So I would obviously have a very sharp sense on this. I think organizationally we are well set up. Right. And I’m not worried about it as well. We have to add some capacity as the business grows. But I would say that from a capability perspective, there are many pockets in the company where the capability is very deep. Even some of the changes we made to the bromine operations, as I said, we’ve done it without long, without any shutdowns and we’ve done it within six to eight weeks in some of the changes we’ve made.
So those are a reflection of the depth we have technically and on the execution side. So I wouldn’t be worried about that in that sense. I think we’ve got plans around it and we are executing. And just the last question to Mr. Ranjit post the designation change, you know.
Rushabh Shah
Where do you devote your time more now? We just share your thought process now. And.
Rajeev Kumar
So I think I’m happy that, you know, the management depth is increasing. I think that’s one of our tasks as promoters to ensure that, you know, there are people who are right and fit for the job to be able to take it up and then move the company at the speed and execution level that we want. So I think that’s the first change that we have consciously made with your specific question. Regarding my own role, I think it will remain strategic. I think that’s where possibly most of my time will go. We do have the new initiatives going on.
So while I work with Ram on the existing business and making sure that, you know, I’m an enabler for him and guiding, you know, and helping him make these things happen in the existing base businesses, I think my focus will also possibly more shift towards the strategic initiatives and making, you know, the semiconductor business happen on the ground, team building there and you know, working on that part of the business as well.
Rushabh Shah
That sounds great, sir. Thank you. Wish you all the best.
Rajeev Kumar
Thank you.
operator
Thank you. The next question is from the line of Ricken Shah from the boring amc boring amc. Please go ahead.
Ricken Shah
Hi, thank you for taking my question. I just wanted to ask on the Orion side. So in Q4, FY25 we have guided for 150, 160 crore revenue in FY26, in Q2, FY26 we have, you know, guided that nothing will meaningfully come this year. And we’ve shifted the guidance to FY27. So we had acquired this asset to NCLT. It was well known, you know, to have complexities. So why was the initial division so far off regarding regulatory timelines and other challenges? And now that you are guiding numbers to come in FY27, what is giving you reasonable confidence that this will happen?
Rampraveen Swaminathan
I think the first one is from a diligence perspective. We did a diligence in operating assets, the products which we can make from there and obviously what would be a reasonable operational time to get the assets back. And as always coming out of an NCLT process, there are several other issues we have to deal with as well. There are many other ecosystem factors which are dealt with local environment issues, the local communities we have to engage with, you know, labor groups which we have to engage with. And so that is something which. So our ability in any scenario to predict the last part of it perfectly is a challenge.
So I think the first two parts which is getting the plant readiness back, understanding go to market and products, I think those we fairly in good shape. Even in terms of what we projected. The plants were shut down for nearly six years and we have forecast to be aggressively able to get plants back in a year. We’ve got three plants up in 12 months. Right. Even lesser if you actually see the actual operating days we had. But we’ve had obviously challenges which you had to deal with. Right. And they do. And therefore it’s been on, off, on off situation now that the plants are so that’s been the real issue.
Right. What we could predict the things which you can control, which can influence, which are not outside our control. And that’s been the factors which has been here. Nobody wants us, we obviously want to. We bought the asset, we want to ramp it up quickly. We put in resources to kind of scale that up. So we want to always work on it in the hardest way possible. What gives us confidence now is obviously our plants are up, three of the plants are up. We are operationally there. You know, we are getting. The customer trials are going on in different products.
So we are in the process of ramping it up. And I think just the fact that we have operational stability now is what gives me the most confidence. Right, that we will start seeing scale up. I don’t, I think at this stage, I’m not going to give you a number saying 150, 160 crores, etc. But I think you will start seeing meaningful progress in terms of, of getting this up and going. But that’s been the real challenge which has been there. Okay, got it.
Ricken Shah
But even in SOP, we are seeing similar patterns that in Q1, FY26 we have stated meaningful contribution. But in the previous, in the last quarter, Q2, we have stated that trials will only happen after Q4 and production will start post monsoon next year in FY27. So we are seeing persistent delays in other segments. So, you know, are there some issues fundamentally, you’ve obviously clarified on bandwidth issues, that you are saying that they don’t exist, but just trying to understand why these delays are happening, you know, in all these segments.
Rampraveen Swaminathan
Well, I think, I mean, it’s a fair point in one way. Obviously from outside in you, several of our programs have got delayed. I’m going to take that on, take that on as a matter of fact, because they are a matter of facts. I think clearly our ability, what I think is the one thing which we can do a lot better on, the ability to see the interplay between external and internal factors and organize ourselves better to respond to them. And that’s the piece which we are investing a lot more in doing right now. So if you look at the SOP issue, I think there have been technical delays.
We are working with the technology partner there. Pilot trials do take time. I won’t say it’s hit and miss, but there are multiple scenarios which they test on and, you know, we have to do. It’s a bit iterative because you get results from every trial and try to rework it. We went into F25 26 thinking that you know, we are in a good shape there but obviously as we did the trials we gave you an update. You know that we will actually require more time on it. I think idealist Orion is a very unique case because of the NRLD issue.
These two in my mind are two big things which as you called out probably have been more longer term shifts. But one is very technical and the other one I think is a bit of an ecosystem issue. Can we do a better job of synchronizing between external and internal factors? I think definitely and that’s our job as a management team to execute better and hopefully you will see that going forward.
Ricken Shah
Forward. All right. Lastly, just building upon.
operator
Mr. Shah, sorry to interrupt you. Can you please rejoin the queue for more questions?
Ricken Shah
All right, sure.
operator
Thank you. Then the next question is from the line of Rohit Sinha from Sunidi Securities. Please go ahead.
Rohit Sinha
Yeah, thanks for taking the question. Most of my questions are already answered. Just one thing on the the order backlog which we are trading around 6,500 for derivative side.
Rampraveen Swaminathan
Yeah, not derivatives.
Rohit Sinha
Okay. So. So that 6,500 is pertaining to. I mean which geography or industry if you can indicate.
Rampraveen Swaminathan
I think it’s across the board. There’s no specific factor of materiality in that. It’s across the board. And the only thing I would say that it’s not six and a half thousand tons which is all. Now our contracts are stacked for different delivery dates so it’s not necessary that all six and a half thousand are actually all to be dispatched today. They have to be dispatched over a longer period of time and that’s why we have a balance between short term contracts and long term contracts in the portfolio. And as the volume starts getting ramped up you will start seeing that getting kind of burnt out already is getting repriced but there’s no specific trend line which has shifted in that largely we remain a lot heavily focused on the Asian markets for the, for the.
For the larger part and our segments still remain pretty much the same. No real shift.
Rohit Sinha
Okay. Okay. So in industry specific if you can negate.
Rampraveen Swaminathan
Sorry.
Rohit Sinha
For which industry these products are having on already we have indicated for the region wise as Asia Pacific mainly will be having this. But on the industry side whom we are going to supply these on volumes.
Rampraveen Swaminathan
If you can just send an email to SGA probably I’m not able to understand the question very well but if you can just send a query to our investor team we will give you a more detailed response on it. I will Share whatever is not, not very sensitive, but please let us know.
Rohit Sinha
Okay. And one, just, just for information sake for this semiconductors. Right. If you can just indicate the timeline from where this financial agreement will be completed and post how things will be progressing and by when we should start seeing the final output from the plants.
Rampraveen Swaminathan
So I think as you mentioned earlier, one is on the ground. I think we’ve broken ground. We’re going through topographical evaluations, land soil evaluation and so on. So that is one program, one item which is going on. I think the funding framework has to be finalized. That’s something which we are having discussions the Indian semiconductor mission on. That’s an external dependency which we don’t have a clear end date on. Right. We have in good shape there. We have got good progress happening there. Once that gets finalized, I think we’ll be in a position to give you more specific details on timing and impact.
Rohit Sinha
Okay. Okay. That is for my Titan. Thank you.
Rampraveen Swaminathan
Thank you.
operator
Thank you. Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to the management for the closing comments.
Rampraveen Swaminathan
All right, thank you all for joining us in the call today. We appreciate your time and continuing interest in the company. You know, in case of any queries, you may please feel to get in touch with SGR investor Relations advisor and obviously I look forward to meeting you know, all over the next call and some of you probably even before that. Thank you all for your interest and participation.
operator
On behalf of Arkane Chemical Industries Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
Rampraveen Swaminathan
Thank you.