Galaxy Surfactants Limited (NSE: GALAXYSURF) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
K Natarajan — Executive Director & Chief Operating Officer
Analysts:
Sanjay Jain — Analyst
Arun Prasath — Analyst
Archit Joshi — Analyst
Aditya Khetan — Analyst
Dhruv Muchhal — Analyst
Umang Shah — Analyst
Divyansh Gupta — Analyst
Aditya Khetan — Analyst
Presentation:
Archit Joshi — Analyst
Ladies and Gentlemen, good day and welcome to Galaxy Surfactants Limited Q3 and 9 month FY26 earning conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. K. Natarajan, Managing Director from Galaxy Surfactants Limited. Thank you and over to you sir.
K Natarajan — Executive Director & Chief Operating Officer
Thank you. A very good afternoon ladies and gentlemen. Thank you for joining our third quarter earnings call of financial year 2025 26. If the first half was about resilience, our Q3 has been a quarter where multiple headwinds converged, testing our agility, execution and resolve. Before delving into the specifics, it is essential for us to understand the broader context and the developments over the quarter and the year to date period. The major factors that have shaped our performance since last two quarters can be enumerated as below. First, reformulation pressures arising from reformulation of a key ingredient by one of our key tire one account in India within our performance affectant segment due to persistently high feedstock prices, this continues to weigh on volumes and contributions since last two quarters.
Second, in India, the GST rate rationalization, while a long term positive for the fast moving consumer goods value chain, it caused a temporary demand deception from end of September and spilled into October month due to deferment of purchases and inventory adjustments, the after effects of which were seen into the festive period in the upstream value chain. Third, the reciprocal tariffs imposed by the US on Indian exports as we highlighted in Q2 continue to impact the contribution of a specialty segment originating from India and affected the pace of conversion in some pipeline projects from Q3 onwards.
And fourth, the dynamics of fatty alcohol pricing which have stayed buoyant at a very high level since last year. Amidst this, it is important to highlight a significant positive Development on the Tariff Front following the recent bilateral update between India and the United States, the reciprocal tariff on Indian exports have been reduced from 50% to 18%. While we await the fine print of the announcement, Galaxy strongly welcomes the state development as global supply chains continue to evolve. This tariff normalization bestows competitiveness and creates a more level playing field for us in the US Market. Lower landed cost and improved pricing flexibility will not only help us rebuild traction in the near term, but it will also strategically strengthen our long term position in North America.
We also believe this move will support the reinstatement of our existing customer pipelines, accelerate penetration high value specialty opportunities and unlock new avenues for growth. While the past two quarters reflected temporary hiccups due to the tariff led disruptions, this development is a major structural positive for us going forward. When all the chemical feedstocks saw a brief softening driven by sharp trough in November on account of record palm oil production and stock build up, the easing was short lived. Market participants expected further declines and therefore stayed cautious resulting in an average basket correction of about 8% for Q3 in our India business.
Unfortunately, the unusually wide and prolonged spread between fatty alcohols and crude petroleum, as communicated earlier, also a phenomenon rare over the last three decades, has kept reformulation thus elevated and this played out adversely for us in India again this quarter. Coming to the numbers in specific for Q3 concentrated volumes were stable on year on year basis, the performance of Pectin’s portfolio experienced a high single digit decline. However this was offset by high single digit volume growth within the specialty segment. The specialty segment’s resilience delivered growth despite tariff induced uncertainties and this was primarily supported by continued momentum in our non US markets in the rest of the world bucket our Q3FY25 26 EBITDA before exceptional items increased by 13% year on year to 124 crore versus 110 crore in the similar quarter last financial year.
Consequently, EBITDA per metric ton improved to 20,156 per metric ton compared to 17,527 for metric ton in the previous year. This uplift was driven by strong volume growth from our non Tire 1 customer accounts, improved contribution realization from the MASTID segment in India specialty prestige specialty products in the rest of the world, incremental service income from our ongoing EPC project, lower logistics cost and the successful execution of multiple cost efficiency initiatives across the group. Our YTD nine month financial year 2526 EBITDA before the exceptional items remain flat year on year at 376 crores versus 375 crore in the YTD nine months FY25 and consequently our YTD nine month FY26 EBITDA per metric ton before exceptional items stood at 19,126 per metric ton versus the last year YTD nine months number of 19,272 per metric ton during the quarter.
We also recognized exceptional items related to the new Labor Code to the extent of 11.9 crores towards the enhanced impact due to revised calculations of gratuity and leave and cashmere. These are though one time adjustments and do not reflect underlying operating trends. They are however necessary and hence prudent provisions have been made aligned to the new statutory regime. Moving on to the regions first India, our domestic growth engine, the volume grew by mid single digit year on year for Q3FY26. Within this the performance segments performance affect in segment degrew by roughly 4% year on year largely reflecting the continued reformulation in few tier one accounts.
Whereas our specialty business delivered more than 35% volume growth year on year basis. The GST reset led to inventory adjustment by all over customers in October month which created a temporary blip in the uptake and the US Tariff overhang continued to weigh on our specialty business volumes exported out of India. That said, the broadening of our franchise with non tier 1 customers cushioned the impact and help sustain overall momentum. As shared last year, we have already undertaken capacity enhancements and developed alternating surfaction systems aligned to the new reformulations by some of our customers. Approvals are underway and we expect commercialization to start in Q4 FY26.
With the normalization of GSE related adjustments, continued specialty strength and the planned commercialization of alternatives, we remain confident of a gradual improvement in our India growth trajectory. Coming to amend the market conditions remain challenging. During Q3FY26 the region recorded a double digit year on year decline in high teens driven largely by market share losses in key tier 1 accounts amid heightened competitive intensity including pressure from bracket integrated and local players. However, we have an update based on some recent developments. We have recovered significant volume traction in Q4 2526 from most of our customers which will get reflected in the upcoming quarter’s performance.
Our teams remain deeply engaged with customers, strengthening our value proposition and actively working to rebuild our position across both Tier 1 and non Tier 1 segments in the region. Coming to rest of the world, we performed well and helped balance the portfolio on a year on year basis. Rest of the world volumes grew mid single digit with Latin American Europe posting growth and sustaining healthy demand across both performance and specialty segments. These gains partially offset the tariff induced softness linked to the North American specialty export from India and they underline our strategy of geographic diversification and disciplined market development.
Tricade, our super specialty business segment catering to high end prestige products delivered a strong performance enhancing the EBITDA profile of the group Coming to Innovation as per the strategy 2030 that we announced in Capital Market Day in June 25, we are pleased to inform that we have launched five new products in Galstorp Sunbliss range, in Sun Care, new one segment in November month and in Cosmetics Bangkok. These second generation molecules are designed to offer high photo stability, strong efficacy at low dosage, broad spectrum UV protection including blue light defense and improved sensory performance while meeting evolving safety and environmental standards.
We have received very favorable response in this regard and these products will be commercialized from Q4FY26 onwards. An update on our rebranding initiative which most of you would have seen in January 26, Galaxy refreshed its ban identity after 43 years as part of its ongoing strategic evolution. Guided by the purpose chemistry creates care, the new branded identity reinforces the company’s focus on long term partnerships, responsible innovation and sustainable value creation. Alongside this, Galaxy is expanding its portfolio beyond home and personal care into beauty, derma and wellness segments. While the visual identity has evolved, Galaxy’s core strengths I.e.
quality, reliability and technical expertise remain unchanged. The refreshed identity clearly positions Galaxy as a trusted future ready partner for customers and all external stakeholders. Coming to Outlook on the cost and supply side, we saw a few moving pieces. Freight offered some relief but operational frictions like port congestion persisted in raw materials despite a brief softening of polychemical inputs. The quarter’s average price correction was not significant and as we entered January the fatty alcohol prices began to form up again consistent with seasonal patterns and festival link demand. While new fatty alcohol plants are coming up should improve availability, Palm canal oil remains a factor that we need to be looking at and planning with what we expect as the way the market would move forward.
On demand side, India performance volumes are expected to increase incrementally in both Tier 1 and non Tier 1 accounts and we do see a double digit volume growth on the specialty segment to continue. Amit recovery of volumes seems positive from Q4 onwards and be of high priority for rest of the world performance surfactants. Growth will continue to be driven by the momentum as was evident in Q3 as regards the specialty segment Our existing customer growth pipeline projects are expected to get good push as regards our North America business thanks to the tariff reduction and will start reflecting from late Q4 and startup Q1 next year.
In conclusion, I’d like to say that we are confident that the worst is behind us. With the India growth story improving amend volumes, gradually recovering incremental profitability expected from the recent U. S India tariff reduction announcement and a sustained improvement in our premium specialty product mix, we are confident of regaining our growth momentum in the coming quarters. Thank you for your continued trust. I now open the floor to to questions. Thank you.
operator
Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchdown telephone. If you wish to remove yourself from the question queue, you may press star and two participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Sanjay Jain from ICIC Securities. Please go ahead.
Sanjay Jain — Analyst
Thanks for the opportunity. I got two sets of questions. First on the regional performance on the Emmett we said that there is a competitive intensity which has increased in Q3 but at the same breath we said that Q4 we are looking at the volumes to come back. What has changed just in a matter of a quarter which is giving us a confidence and in Ammet we are already down 35% from our peak quarterly volumes. How much of that we can recover say next one one and a half year. That’s on the amethyst on India we were supposed to adopt the new changes in the formulation with new product introduction.
Where are we in that process and when should we see volume from that segment coming? And on the rest of the world you sounded quite optimistic on US trade deal and you did mention that you expect specialty volumes to grow at double digit. It is more like fi or you expect for next few years this specialty should grow in double digits. So this is on the demand question side of things. Thank you.
K Natarajan — Executive Director & Chief Operating Officer
Yeah. On the Ahmed side, what has changed between Q3 and what will happen in Q4 is in terms of certain of the businesses that were in pipeline and we are discussing with certain new geographies there. We have been able to complete that towards end of last quarter because although the competitive intensity is there, we do have to keep rejigging in what pockets we need to be catering to within Amit and I think that we did a good job in quarter three but we expect those volumes to start Flowing in only from Q4. That is as far as AMIT is.
Sanjay Jain — Analyst
Concerned with regard to 5% down from the peak. Now where do you expect that to reach? Do you expect to reach that peak in next one, one and a half year or will it take more time?
K Natarajan — Executive Director & Chief Operating Officer
No, we don’t expect it to reach the peak because we very clearly have told that we have had a new relative where you have a person who is backward integrated and who has also taken share from the Taiwan customers there. With all that has happened over the last two years as far as the currency availability and the depreciation is concerned in the key market of Egypt. So that is something that will not come back.
Sanjay Jain — Analyst
Okay, okay. But we will get back to the growth there.
K Natarajan — Executive Director & Chief Operating Officer
Yeah. So what we are essentially doing is that we are trying to see with the new normal how are we able to look at other markets in Amit the way that we are able to balance it out with the credit risk. So that’s what the team is working on because we can’t say that what has gone, we will not recompensate. That’s why the team is working. But to compensate within the existing scheme of things is not going to be possible. That’s why it’s taking time. But in next one and a half years, if you ask me today, I don’t see that we’ll be able to come back to those peak volumes.
Very clear. On India. On India. With regard to the new distinguished, we are ready. But then what also happened was last this thing, our customers, you know, the key customer who reformulated was very busy with, you know, battling the GST rationalization and annuity adjustments. So we are in the process, we expect the approval to happen anytime and business would start anytime now. But the major impact of that will be felt only in the next year.
Sanjay Jain — Analyst
Got it. So we will be back. So double digit growth in India with.
K Natarajan — Executive Director & Chief Operating Officer
That product coming, we should be. But we also had said last time in terms of reformulation there have been also activity, you know, the active adjustments that have happened. Okay. So it all depends on what’s going to be the way that they’re going to look at in terms of continuing with that or trying to operate from further so which we don’t have any idea. But if the current situation continues, we need to see the growth momentum coming back because the double digit growth can happen only if the market is growing. India market, even today, if you see all of them are reporting 2 to 4% volume growth, underlying volume growth.
So that really needs to come back. Everyone, all our Customers are saying that the GC destination should bring that up to that level and they are working towards making that happen. But it has to get reflected in the actual number that they would be selling.
Sanjay Jain — Analyst
Got it, got it.
K Natarajan — Executive Director & Chief Operating Officer
And on the U.S. yeah, on the U.S. obviously. So if you see the tariff actually created an issue for us in terms of the way that we are running the customer projects there where the customers were essentially very, very apprehensive in terms of whether they want to continue working on the projects in pipeline. Now with the way that things have got settled down, it is not only in terms of the tariff but also the way that India and us have warmed up. So customers do feel that this would be a stable situation to move forward.
And we are seeing that, you know, based on the last two weeks of discussion with customers, there is a positive momentum in restarting evaluation of various products in pipeline that were suspended. So that gives us the confidence in terms of it’s going to start, it’s starting to show sudden, you know, uptick in demand for those products that got impacted due to tariff from end of this year. End of this year and more it will be seen in the next year.
Sanjay Jain — Analyst
So we should be growing for double digit volume growth in specialty.
K Natarajan — Executive Director & Chief Operating Officer
We should be seeing that. Yes, yes, yes. But then it’s all a question of, it’s all a question of how we are the customers are going. Because it’s also a situation where we do not know what contracts customers have done for the products already when those contracts are expanded because everything went into a limbo. Now the team is with all the customers. We are trying to understand that. But initial thing indicates that it looks positive to what externally positive we’ll get to know probably in the next call. I’ll be able to give more clarity.
Sanjay Jain — Analyst
Very clear. My second set of question. More like bookkeeping. Netanya, you said that the margins were also boosted because of EPC segment. Can you give more detail on that? And the second question, I can only.
K Natarajan — Executive Director & Chief Operating Officer
Tell you Sanjay, that if you look at it on a YTD basis is not significant since it is with a single customer. And boy with confidential conventionality arrangement with them. You’re not able to reveal the actual number, but it is, is I can say that it has not been significant.
Sanjay Jain — Analyst
Got it, got it. And just one bookkeeping question on the. There is a significant jump in the other comprehensive income for last two quarters from a, from a, from a line item where we need to recognize it into P and L in a later date. What, what exactly is that?
K Natarajan — Executive Director & Chief Operating Officer
Those are Basically coming from your exchange rate movements, coming from subsidiary adjustments. So.
Sanjay Jain — Analyst
Why should it get recognized later in the P L In that sense.
K Natarajan — Executive Director & Chief Operating Officer
I think these are the items which get only. That can only come to P L once you sell your investments in subsidiaries or get back that money into subsidiary back to India. So these are all foreign currency translation reserve, sort of.
Sanjay Jain — Analyst
Okay, okay, got it. Yeah, that’s it from my side. Thanks n for all those updates and best of luck for coming quarters.
K Natarajan — Executive Director & Chief Operating Officer
Thank you so much.
operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may Press Star in 1. Our next question comes from the line of Arun Prasad from Abidis Park. Please go ahead.
Arun Prasath — Analyst
Thank you for the opportunity. Good morning. Good morning. First question is on this tariff related to us, have we shared any tariff with the customer during this intervening period? And if so, with this update on the on the trade, should we see some kind of gains coming back in terms of marches?
K Natarajan — Executive Director & Chief Operating Officer
No, I didn’t, I didn’t understand when you say shared with customers means.
Arun Prasath — Analyst
So a lot of companies have indicated their tariff burden is shared equally between.
K Natarajan — Executive Director & Chief Operating Officer
That’s what we said. So what we had done was that to respond to that there are certain businesses that we could actually cater to from Egypt, we moved it to Egypt. What we couldn’t move, we had to take either some of it at 50%. It didn’t make any sense to do the business at all because you can’t be cash negative. So we didn’t do those businesses in which products where we could absorb some portion of it. We took that call to keep the volumes going. So as we move forward, what we would see is that the major outlook for us or the major outcome that will be good for us is where we are able to build the volumes in terms of all those coins which can be taken only do from India.
And that’s what we’re focusing on now. To the extent that we have taken some calls on some products where we took a margin call, you know, to the extent that the duties have come down from 50 to 18. Once my current contract gets over, we can start reinstating.
Arun Prasath — Analyst
So your confidence that the rest of the world should grow in double digits, it’s more backed by the return of the volumes from those geographies which we couldn’t deliver because of the tariffs. Is that the right understanding?
K Natarajan — Executive Director & Chief Operating Officer
See, right now even without us, we are growing well in the rest of the world because we started pivoting to other locations like in the rest of the world. Now that momentum we want to maintain and we also want US now to come back after customers start warming up with the new reality on tariff. And the way that India and us are warming up, that is going to be a plus for us. But the product categories are very different. It’s not that. Whatever volumes I couldn’t place in US, we could place elsewhere in the rest of the world.
There’s also a mix that has changed now. All this will get reset the moment we move into the next year. Hello.
Arun Prasath — Analyst
Okay. Okay. Okay, sir. Second on this EPC revenue and earnings. Will it be similar to what we have seen in this year going forward? Also where there are small amounts will be keep booked each quarter or will we see some kind of a bulk or a major significant revenue and earnings to come in say by 2017?
K Natarajan — Executive Director & Chief Operating Officer
Because we are expected to be completing this by Q4 of next financial year. Okay. So it will get recognized in small pockets. Not that there will be anything that significant will come in one quarter. Okay.
Arun Prasath — Analyst
Because when the initially announced. What’s the. What I remember is there will be some significant amount which will come at one go. So that’s not going to be the case in any quarter.
K Natarajan — Executive Director & Chief Operating Officer
It’s a question of what we receive and what we recognize. Recognition happens based on the way the accounting standards mandate. Correct. So we are recognizing income based on what the according standards mandate and that will be evenly spread out linked to the percentage of completion of the project. Correct?
Arun Prasath — Analyst
Right.
K Natarajan — Executive Director & Chief Operating Officer
Yeah. That’s what we do.
Arun Prasath — Analyst
If this entire process is not giving us say a meaningful earnings even in any single year, what is the benefit that we are actually going to get? I understand we will be improving our relationship with the customer and at some point of time that may result as a better volume. But what is the tangible benefits we are going to see in the same.
K Natarajan — Executive Director & Chief Operating Officer
Exactly what we said first is we are with our customer as part of their strategic incentive backward integrate. And that was not the only reason. It’s also in terms of we getting access to volumes to for our performance affectants in the biggest market for home and personal care. That is the U.S. north America. That is the prime move that we are doing. And it is not that it is not significant. Okay. It is. It is not that it is something that is going to change because it is not a thing based on what EBITDA we have.
It is not something significant from that context but from this project as such it will be. You need to. We need to understand the context in which we are saying this. Okay. And we are not doing this because we want to get into the business of epc. So we did this because it’s going to give us a link to our strategic market of North America.
Arun Prasath — Analyst
Have we already started getting some benefit because of this? In terms of volumes or margins or mix at least we are not able to see this in the numbers.
K Natarajan — Executive Director & Chief Operating Officer
You can see that because this is in the performance segments, performance affectance segment. And the project will be commissioned only in Q4 of Next Financial year. It is not a commission. Where will the volumes come?
Arun Prasath — Analyst
Okay, understood sir. But anyway those project that that plant will be operated by the customer, right? We will not be reporting in our numbers.
K Natarajan — Executive Director & Chief Operating Officer
No, no, we will not be. We’ll only report numbers which are in terms of what volumes we are going to be off taking for our requirement in North America.
Arun Prasath — Analyst
Okay, understand. And one more question. On the gross margin this quarter, if we see in the first half on per kg basis, we are clocking close to around 49 fees per kg and Q3, suddenly we are looking at the 53. 53 and off per kg. I’m looking at the reported EBITDA per Kei chicken translated into gross margin per kilogram. So this first off to first half of 49 to Q3, 53 is to throw again. Is it dramatic shift in the mix or pricing? The large effect, how should we look?
K Natarajan — Executive Director & Chief Operating Officer
No, this as I said in my opening remarks, one is our psyche which is into prestige specialties did very well. So that is one of the reasons K and the other one is also what we sell from India. Okay. There is a mixed impact. Okay. But as you said, our trike business which is into this is specialties had a role to play in terms of this being better than what it was in first half.
Arun Prasath — Analyst
Okay, but. But from last year’s say 20, cumulatively we had closed around 52 and a half rupees per kilogram gross margin. From there the first off reduction to 49, 48. 49. That was primarily driven by the our mix. But again from the what happened was.
K Natarajan — Executive Director & Chief Operating Officer
The major reason in custom was when the tariff got announced for us, some of the businesses just got stalled. Yet also take time to be rejigging business from India into whatever we can do. The mix also had to undergo a change because certain products we couldn’t sell out of India. And then we had to be seeking other markets like in rest of the world. Okay. Where we had to place it in a sense of urgency. So it’s not that we could get time to be able to get the pricing we want. So it is all about how do we recheck our portfolio in terms of our locations and geographies based on what what the tariff situation presented.
That’s what explains that.
Arun Prasath — Analyst
So this gross margin per kilogram.
operator
But you may please rejoin the queue for more questions. Thank you.
K Natarajan — Executive Director & Chief Operating Officer
Can I answer this what I think last question that you had so that we we don’t lose.
Arun Prasath — Analyst
Sir, this is a sustainable cost margin. Unless and until we see some. Before we see some kind of we’ll.
K Natarajan — Executive Director & Chief Operating Officer
I will have clarity because my US thing has to sustained because I’m also seeing that the US market based on all that my customers, one of our key customers who has a big presence in beauty and well being in US has flagged concerns in terms of demand issues in us. So that means we need to see how Trike shapes up. But I don’t see that as a big concern the way that the Trike business is performing. But I need to make it clear certain only when I go into the next quarter I will call. The other thing is with our tariff getting releasing we also see that if all my customer projects that were put on hold and business that we actually are suspended once that start coming in it is going to state the margin profile.
So I would urge you to wait until May when we will have our call for the full year. I can give better clarity.
Arun Prasath — Analyst
Understood sir. I’ll just rejoin the queue and.
K Natarajan — Executive Director & Chief Operating Officer
Thank you. Thank you.
operator
Thank you. Our next question comes from the line of Arshit Joshi from nuama Wealth Management Ltd. Please go ahead.
Archit Joshi — Analyst
Hi, very good afternoon sir. Thanks for the opportunity. I have a few. First one, we have been hearing from you about the reformulation strategies adopted by our customers. Sir, my question was whether have we seen this happen in the past? Is that like a permanent reset to a particular surfactant being used in a lower quantity basis their cost structure? Of course. And should that reverse sometime in the future. What have been our experiences when such a shift happens at the customer’s side?
K Natarajan — Executive Director & Chief Operating Officer
I’ll tell you. So it’s not that it happened for the first time, it happened earlier. But then the tenure for the the price delta between fatty alcohol and crude petroleum derivatives have been not this prolonged. So that’s one change that has happened. Second is any deformulation in terms of activity adjustments or your alternatives being used typically are something that is not our customers would do in the normal course. They’re doing it because they are forced. So I can tell you that once price start getting corrected to some reasonable levels we would see that they would revert to what their original formulation was.
So these are all temporary adjustment that they’re making. Okay. And that’s what even a dialogue with the customers tells us. But we are hopeful that the fatty alcohol prices should start getting corrected say from May onwards because we do see that you know, structurally with the high season months coming in of palm and palm kernel. Okay. It should start reflecting. But yes, you know, we don’t have a crystal ball in front of us but this is what is expectation based on what we have seen in the earlier years. So we need to wait for that.
Archit Joshi — Analyst
If I understand correctly, long story short is that there is a chance that the actives used in any formulation can go back to the same levels that earlier they used to use. Yeah, of course, timelines notwithstanding.
K Natarajan — Executive Director & Chief Operating Officer
Yeah. When it will happen. It’s all a lot of imponderables around that. But yes.
Archit Joshi — Analyst
Sir. Secondly, I remember you know, speaking to you on the mix that we have amongst our customers and we are definitely seeing some shift of some local niche kind of players who have gone up in the total salience of our total revenue mix. So in this quarter, as I can see from the presentation, 40 is going to 47 and on a nine month basis also we have jumped from 39 to 44. How should we read this? Is it that because of these reformulations the MNC customers have dropped significantly in volume and because of this there’s an optically higher number seen in the mix of these local and news players or we have actually seen local news players grow significantly in volumes.
K Natarajan — Executive Director & Chief Operating Officer
Funny percentage. Obviously also know that denominator has an impact. So if the denominator comes down, the percentage goes up. But that’s one part of the explanation but more importantly which we have been constantly saying, is that we are very deeply entrenched and a huge amount of engagement with all our Tire 2 Tier 3 and T2C customers which is what enables us to ensure that we were able to mitigate a good portion of the impact because of the reformulation by Tire 1 customer. With what we could do with the Tire 2 Tier 3 and the direct to consumer brands and that particular intensity to grow that segment is not something that we are doing now.
It has been a stated strategic agenda for us and we will continue to maintain and build on that momentum. That we are very clear. And we also know that the way the markets are looking at it, you know, you will have D2C brands are here to stay. It’s all important as to how we have a business model that enables to address it very effectively, effectively and sustain whatever growth that we achieve with the business with them.
Archit Joshi — Analyst
Understood. So would that be fair to assume, sir, there will be a gradual pivot towards these local, niche, regional kind of players and that should any number as a percentage of mix that you would be targeting over there.
K Natarajan — Executive Director & Chief Operating Officer
See, one thing that I say, personal derivative. It is not that we are deliberately familiar pivoting towards tier 2, tier 3 and depriorizing tier 1 though that is not the way that we will do business if the churn happens in the end market. We are well ready because the way that we engage with all types of customers, okay. That’s the way this we understood there is. Our strategy is not to deprioritize. Okay. We have to have the ability to serve all the segments and in a way that they would want it. The way that the market configuration happens and that would been doing for last 40 days, we’ll continue to do the same thing.
Archit Joshi — Analyst
Got it sir. One last small one on this extremely welcome development with regards to commercialization of five new products under the D1 category. Hearty congratulations on that. And since we are hoping to ramp up production, sales and commercialization from next quarter onwards, would you sir, like to give us some more understanding with regards to its potential from an export perspective or whether it will be domestic or any particular customers. Would there be MNC or regional players? Anything on that account that would be helpful? Thank you.
K Natarajan — Executive Director & Chief Operating Officer
Yes, it will be. Essentially we launched it in November. We are able to see a good amount of response and that is very heartening. It will be in India and out of India both because it is in the Livon segment, this is in Sun Care. Okay. And obviously it is. We don’t have any specific focus on. We say that, you know, it’s not that we want to focus only on Tier 1 or Tier 2, Tier 3 customers. This is a product. We have got interest across all tiers of customers and our objective is to see how we are able to progress well and convert all these positive enquiries into business.
That’s what we are working on.
Archit Joshi — Analyst
Understood, sir. So this would have a significantly higher EBITDA per ton, right? Compared to our existing or blended number that we are reporting close to 18, 20,000 tons.
K Natarajan — Executive Director & Chief Operating Officer
Yes, it should have. It should. Correct. Understood.
Archit Joshi — Analyst
So thank you sir. Thanks a lot and all the very best.
K Natarajan — Executive Director & Chief Operating Officer
Thank you so much.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the question from the participant, we request you to kindly limit your question to two questions per participant. If you have a follow up question, please rejoin the queue. Our next question come from the Line of Adity Khetan from SMIFS Institutional Equities. Please go ahead.
Aditya Khetan — Analyst
Yeah, thank you sir for the opportunity. Just a couple of questions sir. When we say so we are pivoting to other regions for growth in export market. So compared to US market also whatever benefits which we had got in US are the other markets similar in terms of the remunerative prices or they’re below or they are higher. So whatever markets like we have explored during this tariff journey, how you see that journey to build upon or like so US will come back to normal.
K Natarajan — Executive Director & Chief Operating Officer
See first of all the. It’s. It’s not that in the rest of the world on our specialties we are focusing on all the markets North America, Latin and Europe. But then when the tariff situation presented to us in Europe then we had to be looking at how do I start seeking more business from those segments. And obviously we had to even do certain things which were because what option we had either to take those huge margin rate in terms of continuing to sell that into the US or look at other markets where the impact can be lesser than what margin impact we will have in the US with the tariffs incorporated.
So that will ensure that there is no question of saying that whether I plan to have what margin I need now whole thing was to ensure that we start pivoting because we never knew how long this U.S. situation will continue. Correct. Now this positive development has happened in terms of the tariffs getting reset and we don’t have any competitive, we don’t have any comparable disadvantage visa others in the world. Almost everyone is at 18, 19%. Okay. So this gives us the confidence to restart. Okay. The strategic pipeline projects we had with the customers in US which was what was originally intended.
Okay, so we’ll then start. Once those things start rectifying we start rejigging back into the US those volumes.
Aditya Khetan — Analyst
And this customer which you mentioned US customer has stated like demand is an issue. So how you see the uptake would be gradual or it would be very easy for us to take back the lost.
K Natarajan — Executive Director & Chief Operating Officer
Now the first time, if you see the for the first time, two of the biggest guys, one of them is the biggest in the US the other one is very big as far as your personal and home, your beauty and well being is concerned. Therefore the first time flag concerns with regard to the demand side in the US we haven’t heard this till now. When we see the commentary of some of our competitors in the US and Europe they are all pointing towards huge concern on the robustness of demand. The first time when the customers are flagging.
This is when we say fine. If they are saying that they are probably much nearer to the consumer side of the business. So we said let us take this input and keep it into our mind. That is what I come in. So when someone asked whether we expect the US business to be continuing into double digit growth, I said this aspect has to be factored in. Although everything continues as normal, things would be much better given that the tariff situation also has got resolved in a very positive way.
Aditya Khetan — Analyst
Got it. So sir, despite this slowing, suppose if that issue persists on the demand side, we still like sir, maintain our volume guidance of whatever for the next two years. Is that maintained or like there is would be again some cut.
K Natarajan — Executive Director & Chief Operating Officer
See volume guidance, we Talked always about 6 to 8%. Okay, so it is, it’s actually very dangerous to change guidance when things are in such a state of flux. That’s the reason why I don’t, I’m not courageous enough to do that because I don’t want to be. My revising the guidance has to give more clarity. It’s not confused. Correct. That’s the reason I’m not doing it now. There are too many things that are happening on the positive side in the geopolitical situation. If all that falls in place, we do see that things should start looking up and take us closer to that 6 to 8%.
Because what is very commendable as far as the performance is concerned is that despite so many challenges in India, which has been the biggest market for us, with the tariff in US and with what is happening in Europe, we have been able to have a positive volume growth and also able to keep our profit numbers flattish by combination of how do we reject our demand and also in terms of how we took care of cost. So this essentially again is a very good, clear demonstration of the very, very robust business model that we have across customer pairs and across geographies and across product segments.
Yeah.
Aditya Khetan — Analyst
Just one last question sir, if I may, to the ep, EPC business, any sort of an guidance like for the next one year or for the next two years how much contribution we can see from this business and how much EBITDA diversification will happen from base business to this. Any sort of a number considering next so two to five years.
K Natarajan — Executive Director & Chief Operating Officer
So first of all I just said if I can give for next two years I would have given as to what we have recognized in this year. That’s why I said it is not significant. And then I was asked if it’s not significant, why did I do it? Which also explained. Okay. So I can only tell you that in the coming years also it’s. It will be there but not be significant in terms of what we’re doing with this customer. Since I’m born, the confidentiality agreement with this customer I am not able to disclose otherwise.
You know that as an organization very transparent. Okay. We would have disclosed.
Aditya Khetan — Analyst
Okay. Thank you sir.
operator
Thank you. Our next question comes from the line of Dhruv Muchal from HDFC amc. Please go ahead.
Dhruv Muchhal — Analyst
Yes sir. Thank you so much sir. First question is is it possible to share how much portion of your India business is getting influenced by this reformulation? And to some degree is it already, I mean is it there in the Q3 numbers or more can happen?
K Natarajan — Executive Director & Chief Operating Officer
As of today whatever has happened is fully reflected in my Q3 numbers. Okay. And if you, if you look at the entire degrowth that has happened in India if you compare with last year to now can which we have been able to mitigate with some good business growth that we had with our Tire 2 Tier 3 customers has entirely been due to this reformulation. So if we don’t see the base getting altered significantly if the current situation continues. But if they are, you know, if you have the fatty alcohol price and crude petroleum prices further diverging.
Okay. Then we cannot make any statement on because then we need to go back to the customer. But as of now what has happened has happened. Okay. So we don’t see that increasing further.
Dhruv Muchhal — Analyst
Sure. I’m asking why? Because there would be some products where the formulation can never happen. I’m assuming there could be some products where the formulation reformulation can never happen. So from that angle I was trying to understand.
K Natarajan — Executive Director & Chief Operating Officer
Yeah, correct. So whatever. I think most of what could have happened have happened. So customers also, they very, they do give us advanced intimation but they will not tell us into every detail that they are planning. But based on whatever discussions we have had with their top leadership, I think most of what they had to do they have done.
Dhruv Muchhal — Analyst
And secondly that we are seeing this reformulation strategy of yours will start to play out from Q4 and gradually from Q4 and also the Amit growth will start to see. I mean at least the base is there now we’ll start to see volume growth back. But just trying to understand how is this business from a profitability perspective both India and the new growth that we are seeing in Amit, I mean is it meaningfully different than what you were historically doing? And initially there will be some learning curve and some market share gain related push which will influence the margins or the EBITDAs versus what you typically used to do historically or they are broadly similar as what was earlier.
K Natarajan — Executive Director & Chief Operating Officer
Yeah. So the first object we have is to be meaningfully present into certain reformulations that have already happened to the extent that we need to. That is the first objective. So once we get there, we also know that, you know, because the pricing is what there is in the market, it’s not a new product. Okay. It’s something that is already existing. And then we obviously didn’t get into that because it is a petrochemical based feedstock. So we said let us first prepare ourselves to participate in this reformulation. Similarly in Ahmed and those new countries that we are looking at, okay.
We are very clear that we will not get into any country where we have significant credit risk. But we are also looking at taking appropriate margin calls to get the volumes. This first objective is to get the volume traction back. Okay. But it is not that we are taking calls that are going to be injuring us in terms of margins. But yes, these actions that we are taking are not going to be super margins that we will make. So it is going to be something very normal.
Dhruv Muchhal — Analyst
Sure. And the last question, a quick one is when I do a console minus standalone, I see these subsidiaries, which effectively I believe is Egypt and the US and some other businesses seems to be doing well. And this is despite Amit not doing as well for the last few quarters and probably few years. So is it primarily driven and particularly this quarter seems to be strong. So is it primarily because of the US because of the TRIK or the other factors probably mix in limit is improving and all those is just trying.
K Natarajan — Executive Director & Chief Operating Officer
To understand the major here, if I can say is that your U.S. i said in terms of is a better, better but the major impact in terms of standalone being low is because I said India has been significantly impacted due to the reformulation.
Dhruv Muchhal — Analyst
Yeah, standalone low is understood but the gap seems to be okay. I mean that would mean the subsidies are doing well.
K Natarajan — Executive Director & Chief Operating Officer
I think it’s also majorly what I said in terms of what is happening in our Tricare business where it is able to give us some good growth in terms a profitable growth which is able to compensate.
Dhruv Muchhal — Analyst
Okay, got it, sure. Great. Thank you so much and all the best. Thank you.
K Natarajan — Executive Director & Chief Operating Officer
Thank you so much.
operator
Yeah, thank you. The next question comes from the line of Oman Shah from Banyan Trees Advisors. Please go ahead.
Umang Shah — Analyst
Hi sir, thank you for the opportunity. So I just had a question on Amit. You said that, I mean you mentioned in the proceedings that there Was a lot of local competition. Is this cost based competition and do you think it is sustainable?
K Natarajan — Executive Director & Chief Operating Officer
See, this competition is not coming now. In fact, it has happened. When Sandesh also said the peak volumes that we had was all when Egypt was in a very steady state, currency was ruling at something like 15, 16 to a dollar. Today it is at 45. Okay. And inflation, they have passed through some hundred percent inflation. Today they are at 40%. So now with all this, what has happened is that there have been some local players who have taken advantage of the situation and have come up with product formats and pricing that have been significantly cheaper and they are also backward integrated.
That is what resulted. Because when my customers there, my tier one customers lose share, it safely reflects on us and there is no way that I can gain back that share with others who are now taken the end market share because they could integrate it. So that is something that is not something that has happened now that has happened over the last three years.
Umang Shah — Analyst
Got it, Got it. Very useful, sir. And the second question is, after a long time there has been a declining raw material prices, fatty alcohol prices on a quarter, on quarter basis. Do you see the price increases impacting or benefiting the ebitda?
K Natarajan — Executive Director & Chief Operating Officer
No, no, no. Actually whenever prices decreases, it decreased briefly. But then we were also very cautious because when prices start decreasing now when alcohol was at $3,000 and it went to $2,500 $2016. Typically the problem is the risk we have to manage is very high intensity because customers then expect it to come down. For some don’t do deals, but we need to buy to continue our production. So we are very, very conscious now how do we manage the risk now after all of them were waiting that then they will do their deals once it comes on follower, now it has started going up.
So now customers again are coming to buy, but again are doing deals which are short term because they say it has gone up and it will come down. So this aspect of it’s not a question if it has been secular into a particular rising situation or a fall. I think it’s very easy to manage the business if it is a situation where it keeps fluctuating. Very frequently the frequency is what is a problem today. And the issue reflects in terms of the way customers are looking and doing deals because they are being very short term.
You know, they are looking at deals for doing one month, two months and three months. Okay? That means your risk profile increases because you have to manage the raw material risk within that frequent way in which customers are doing the deals.
Umang Shah — Analyst
Got It. Got it, Got it sir. But I assume that we had an automatic quarterly price increase that you are passing on to the customers in performance segment.
K Natarajan — Executive Director & Chief Operating Officer
So that is for our contractual customers. But I think I have a good, we have a good business happening with our non contextual customers now that is tied to Tai3. I’m talking about that.
Umang Shah — Analyst
Got it, got it. So the 30 or 2 tier 3, they don’t have any price increases. So basically the negotiations out on a quarterly basis.
K Natarajan — Executive Director & Chief Operating Officer
Quarterly. Some of it is monthly. Some of them do 6 month deal depending on how they see the raw material situation. So one is what we give them information as well what we know other is what they know. And finally addition happens. So some of them do a six month deal. Even today we have to people who are doing a six month deal, they expect prices to stay firm. There’s some people who are going short, they’re only doing it for two months. So it’s a combination.
Umang Shah — Analyst
Got it, got it, got it. Thank you so much.
K Natarajan — Executive Director & Chief Operating Officer
Thank you.
operator
Thank you. Next question come from the line of Divyansh Gupta from latent pms. Please go ahead.
Divyansh Gupta — Analyst
Hi sir. Am I audible?
K Natarajan — Executive Director & Chief Operating Officer
Yes, you are.
Divyansh Gupta — Analyst
Yeah. So regarding the alternate formulation that we have developed some questions regarding that. So is my assumption correct that this is not a supply constrained situation? As in the tier one customer or other customers would have enough decent supply of players providing them with the reformulation. And therefore the question is that given that we have developed a technical formulation to serve the customer, what is going to be our edge to grab any market share? As you also mentioned, that majority of repopulation has already happened.
K Natarajan — Executive Director & Chief Operating Officer
So there is no question of grabbing market share. It is there that we lost volumes to the reformulation. My customers, obviously they reform it because there’s someone else who was making that supply. And the reason why we are confident that we’ll be able to get a good portion of the volumes back is in terms of the strategic arrangement we have with the customer and the volumes that went out from us would come back once we are ready with that particular alternate feedstock, alternate, you know, formulation. That’s it. There’s nothing of me trying to grab market share.
Divyansh Gupta — Analyst
Whoever they were buying from.
K Natarajan — Executive Director & Chief Operating Officer
Yeah, correct.
Divyansh Gupta — Analyst
Got it. Understood. And we the realization for this would be lower than a performance of actings or largely similar.
K Natarajan — Executive Director & Chief Operating Officer
Should be largely similar.
Divyansh Gupta — Analyst
Just last question. With the uk, FTA and the eu, fda, does it benefit us in any way with respect to pure cost competency?
K Natarajan — Executive Director & Chief Operating Officer
No, sir, I don’t know. With UK there is nothing much that happens in uk the business. So we probably. It’s not that the duties are very high. Okay. UK as a market, most of it is to get done in the other parts of Europe and getting into uk. So our team is now working with some customers in uk. So the UK FTA is not something that’s going to be of any great, so significance to us. But do you have ta. Yes. Because what is important is that even earlier you had, you know, the again, gsp, your general system of preferences used to have duties of 4 to 6%.
Now that is going to go to zero. That it’s not that the duty rates are very high.
Divyansh Gupta — Analyst
So it’s not going to make us marginally any more comfortable. Large competition age is not there.
K Natarajan — Executive Director & Chief Operating Officer
Yeah.
Divyansh Gupta — Analyst
That’S all. Thank you.
operator
Thank you. Our next question comes from the line of Rohit Nagaraj from 361 Capital. Please go ahead.
Aditya Khetan — Analyst
Thanks for the opportunity. First question is on the palm corner, oil prices, fatty alcohol prices. Given that in the last one one and a half years the prices have been hovering more than say $2,000 per ton. Is it a structural shift that has happened where earlier the prices used to be about 1500 plus minus dollars per tonne and now moved consistently at $2000 per ton?
K Natarajan — Executive Director & Chief Operating Officer
No, I think whether it’s the structural shift we’ll have to wait at least for the next six months to understand because it has run through a cycle of close to 15 months. So we need to see it at least up to next October. Okay. And then because there have been too much, too many amount of, you know, what do you say, external stimuli that is causing prices to respond. Okay. So now with all that is happening in terms of the geopolitical situation, crude petroleum price, because one thing we see that the crude petroleum prices correct significantly there can be an implication for the farm value chain because we have always seen a positive correlation between crude petroleum prices and palm oil prices.
Okay. So that is something that we need to keep a watch on. Okay. We need to also keep a watch on in terms of the production numbers. Our initial, you know, discussions with the marketplace tells us that this year they expect the production to be good. With the recent palm oil conference where my colleagues attended, I think it is pointing towards a good production scenario in this year which can also be bearish for the market. But how much bearish we do not know and whether if there is any other external stimuli that is negative, it can keep the prices high.
But the way I look at it is that the probability of prices going up further from here is low. As compared to prices coming down, to what extent they’ll come down, we’ll have to probably wait till May, June.
Aditya Khetan — Analyst
And second question, in terms of the BTN personal care, we have been more and more focused now on the Leave on category than the Rinsoft. I just wanted to get a perspective maybe five years back where were we in terms of the proportion of Rinsoft and Leave on and where are we now? Because I think last year when we had incorporated the 2030 vision, we had categorically stated that this is the area which is going to be the area of growth for us over the next five years. So just to get a perspective, I.
K Natarajan — Executive Director & Chief Operating Officer
Mean the number the entire HPC market, okay. Traditionally and for the years to come, it will always be very highly skewed towards reimsorb applications because I think cleaning is what is the biggest part of the home and person care market. You see it’s fabric cleaning or it’s your surface cleaning or it’s your dish cleaning or it is your institutional cleaning. So that will always be the case. So essentially our focus is going to be continuing to be very intense on the WinSoft segment. What we’re doing is we are adding an additional listing on the Livon segment which is more focused on what we call as the beauty segment which is more to skin cream, skin lotions and all that coming up with ingredients for that.
So that is the moving. So essentially it’s not even moving forward in terms of volumes. They can be significantly as higher percentage. But we need to be very choosy about which product categories we want to get into. As far as live on is concerned that so we see we launched what we call as the Sun Care ingredients gal gut bliss that we launched in cosmetics in November. So we’ll be very particular as to what sort of ingredients that we get into because it has to be ensuring that we are able to sustain the growth and the profitability.
Aditya Khetan — Analyst
Sure. Got that. Thanks a lot and all the best sir.
K Natarajan — Executive Director & Chief Operating Officer
Thank you. Thank you.
operator
Thank you. Our next question comes from the line of Adityan from smi. If it’s institutional equities, please go ahead.
Aditya Khetan — Analyst
Yeah, thank you sir for the follow up. So my question was onto the fatty alcohol prices. So considering the inventory, what would be the inventory position today of RM considering at $2800 per ton vs 1500 per ton prices is is the inventory cycle shortened and by how much days if you can quantify that. And secondly sir, adding on to that. So hypothetically assuming if RM prices decline by 20% just hypothetically assuming it how much hit to EBITDA we can attribute it to. And also sir, third onto this, if you can also quantify the differential between fatty alcohol and the crude petroleum prices.
Like what was it, what is it today? And roughly so one year back.
K Natarajan — Executive Director & Chief Operating Officer
So you’re actually a lot of questions that I asked my sourcing head. Okay. In terms of how he’s planning. So I can’t be answering in this detail. But I can tell you that we have a very robust risk management framework in place with NCU that even if the prices fall significant, if they rise, there is no risk. If they fall significantly, okay. Our hit to the P L will be minimal. That is how we have structured a risk management framework. That is one. The second is in terms of crude petroleum to this I don’t think as of now I have any specific response to give you.
These are all some data points that we need to get into. So I don’t have it readily available to respond on that.
Aditya Khetan — Analyst
Okay. And so this is the trend like current because for the last 12 months crude prices have went up. Most of the crude related derivative that is to make surfactants that might have also moved up. So differential ideally would have been shortened. Any trend if you can also highlight the trend is shortening and that would benefit more towards fatty alcohol players. Any sense onto that?
K Natarajan — Executive Director & Chief Operating Officer
No, I don’t think I’m able to see any trend. The lab price is going up is all related to some shutdowns that are happening now. And lab entire complex is very differently structured. So there are more details. I don’t think I’ll be able to explain that in detail. Okay. I think my sourcing it can have a conversation with you. Okay. In more detail. Okay. But right now I don’t see any trends that we can relate to. Okay. They’re all more short term in what is happening in lab and what is happening in fatty alcohol is something that is there at least for the last 15 months.
We need to wait till October to understand whether structurally something has changed inventory.
Aditya Khetan — Analyst
Cycle of rm sir, if you can quantify that, how much would it be?
K Natarajan — Executive Director & Chief Operating Officer
Inventory cycle is a derivative of how we want to manage risk. So there is nothing specific like I will only run with 15 days inventory or 3 months inventory. We need to be having inventory to the level that we can continue our production uninterrupted. At the same time not a significant impact on the panel in case the prices correct all of a sudden and significantly. So that is one of the differences this thing, the way we manage our performance of accounts business. Okay. And so it is suffice to say that we do not, we will not have any significant impact to our P and L Even if the prices correct significantly it starts coming down.
We manage our risk very, very prudently.
Aditya Khetan — Analyst
Got it sir. Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I would like to hand the conference over to the management for the closing comments. Thank you. And over to you Tim.
K Natarajan — Executive Director & Chief Operating Officer
Thank you ladies and gentlemen and thank you for the huge interest that you have in terms of understanding our business and our performance. I look forward to seeing all of you and answering all your questions and giving an update on the full year performance three months from now. Thank you. And all the best. Thank you.
operator
Thank you sir. Ladies and gentlemen, on behalf of Galaxy Surfactants Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.