Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Tatva Chintan Pharma Chem Limited (NSE: TATVA) Q4 2026 Earnings Call dated May. 16, 2026
Corporate Participants:
Ajesh Pillai — Chief Financial Officer
Chintan Shah — Managing Director
Analysts:
Sanjesh Jain — Analyst
Unidentified Participant
Jaya Vagasia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Tatvo Chantan PharmaChem Limited Q4FY26 earnings conference call hosted by ICIC Securities. As a reminder, all participant lines will be in the Luxonomy 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 touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr.
Sanjesh Jain from ICIC Securities. Thank you. And over to you sir.
Sanjesh Jain — Analyst
Thanks Supnali Good evening everyone. Thank you joining thank you for joining on For Tatvachintan Pharmacium Ltd. Q4FY26 results conference call we have Tato Chintan Management on call Represented by Mr. Chintan Shah Managing Director Mr. Ajesh Pill, Chief Financial Officer. I would like to invite Ajeshti to initiate with opening remark post which we will have a Q and A session. Over to you sir.
Ajesh Pillai — Chief Financial Officer
Thank you Sandeshi Good evening everyone and welcome to Q4FY26 earnings call of Tatuchindan Pharmacam Ltd. Our financial results for the quarter have already been submitted to the stock exchanges and are also available on the company website. I will take you through the key financial highlights and provide you a brief update on the performance of our major business segments during the quarter. For Q4FY26 the company reported operating revenue of Rupees 1341 million reflecting a strong growth of 24% year on year and 2% quarter on quarter.
EBITDA for the quarter stood at 281 million, marking a significant increase of 214% compared to the same period last year and a 10% improvement sequentially. This growth was primarily supported by better product mix and improved operating leverage. Now turning to Segment wise performance first is phase transfer catalyst. It recorded revenue of Rupees 311 million registering an 11% sequential growth through revenue though the revenue was lower by 20% on a year on year basis. Electrolyte salts delivered a strong performance with revenue of 131 million reflecting an exceptional growth of 865% quarter on quarter and 1,378% year on year, Pharma and Agro intermediates and specialty chemicals generated revenue of Rupees 358 million, representing a 10% increase year on year and despite a 24% decline, sequentially structured directing agents reported revenue of Rupees 525 million, witnessing a marginal decline of 2% quarter on quarter while achieving a robust 52% growth compared to the corresponding quarter last year.
With this I conclude the overview of performance for the quarter. Once again, Our Managing Director, Mr. Chintan Shah has entrusted me with the opportunity to deliver this address on his behalf and I sincerely value the confidence placed in me. With that, let me take you through his perspective on the year gone by and the progress achieved across the business and the direction we envisage going forward. First and foremost, I would utilize this opportunity to congratulate all the stakeholders on achieving revenue in excess of rupees 500 crores in recently concluded financial year.
This year also marks an important milestone as Your company completes 30 years of operation, a journey defined by committed innovations. As we conclude the financial year, we are pleased to note that Satvichinden is at an inflection point where multiple initiatives across our business segments are beginning to converge, reflecting the early stages of a more structured growth. Over the last couple of quarters we have been observing a gradual pickup in momentum in business activity across the segments.
Order flows are becoming relatively more stable. There is a consistent gradual uptick in demand. Customer interactions are increasingly moving beyond short term procurement towards broader business discussions and future requirements. The overall engagement environment across key end use segments has improved significantly compared to what we experienced over the last couple of years. This is helping in better planning, improved continuity in business discussions and more structured commercial engagement across all the segments.
At an operational level, our efforts during the year remained centered around improving execution across businesses, stabilizing newly commercialized products and preparing the organization for higher scale across select segments. Also, we remain focused on making the new production block at Dehit site operational. The new block is now fully operational on commercial scale. Alongside this, we continue to work on process optimization and on strengthening the manufacturing readiness for upcoming opportunities.
As we move into the Sinai new financial year, our focus will increasingly be on translating these efforts into more consistent commercial outcomes while ensuring the organization remains adequately prepared to support future growth across multiple business verticals. We believe the work carried out over the last few years has created a stronger operational foundation for the company as several opportunities gradually move towards higher scale and regular business engagement. Let me now take you through the segment Wise developments Phase Transfer Catalyst Phase Transfer Catalyst Continue to deliver Steady Organic Growth in line with historical trends over a period of time, industries across the chemical sector are increasingly recognizing the process and efficiency advantages offered by PTC chemistry in various applications.
We believe this gradual widening of acceptance across industries will continue to support the long term organic growth of this segment. Structure Directing Agents in structured directing agents, the demand are consistently growing and as we come near to the 2027 implementation of stricter emission norms via implementation of Euro 7, the demand will continue to gradually rise. The first implementation of these norms is beginning with Europe and would be followed by other geographies. Gradually, we are also witnessing improved customer engagement across key geographies with business discussions becoming more structured.
Given the specialized nature of this chemistry and our established position in the segment, we continue to remain positive on the long term prospects of the SDA business and expect it to remain an important contributor to the company over the coming years. Electrolyte Salts and Solutions the electrolyte salts segment continued to scale gradually supported by increasing consumption in energy storage applications. The customer utilizing our electrolytes for energy storage devices has shown a steady ramp up in volumes and we expect this trajectory to strongly strengthen during the current year.
In addition, work with the customer engaged in hybrid battery application is also progressing well. We shall see a beginning of commercial business for this application in Q3 of this current year. With gradual scale up across customers, this segment is steadily strengthening its strategic relevance within our overall portfolio. The current year will reflect electrolyte segment as a relevant contributor to our overall revenue. Pharma, agro and specialty chemicals that is PASC in pac. Commercial traction has improved meaningfully.
The agro intermediates commercialized earlier are witnessing sustained demand and are expected to see healthy offtake during the year. On the pharma side, all the validations of our products are successfully completed and commercialization will begin. From current year we have one product getting into commercialization in Q1 and the other two products will get into commercial production from Q3. These products would be produced and delivered on campaign basis. Overall, this segment continues to reflect the benefits of our focus on catalytic technologies and complex chemistry development.
Semiconductor Chemicals in the semiconductor chemicals segment we are pleased to report a significant milestone. Planned scale trials for our first product have been completed successfully and its dispatch would happen in the current quarter. This is a big confidence booster for our team and this success brings in New Zealand to put in more efforts to make this as one of our most important product segments over few years. This marks an important step forward in our long term semiconductor roadmap and while the scale up will remain Gradual it strengthens our confidence in the emerging opportunity within this domain.
As we discussed earlier, our focus on building infrastructure for future growth remains a key priority. With respect to the new greenfield project at Julwa, the preparatory work has progressed further and we expect to commence the groundbreaking during this quarter. As the project engineering and planning were refined further, we identified opportunities to enhance long term scalability and operational efficiency of this facility. We believe this additional effort at the design stage will strengthen the long term value creation potential of this asset.
This facility will be a key enabler for products with strong domestic demand and will significantly enhance our manufacturing flexibility as we move towards commercialization over the next 18 months. The current ongoing geopolitical conflicts definitely pose challenges this leading to rising costs of fuel packing material and of course the biggest challenge is the steep increase in the prices of key raw materials which are crude origin and related to ammonia. The freight rates are also increasing.
The good part is that so far, availability of raw materials continue almost smoothly except for some delays in certain cases. We have worked closely with each customer and most of our major customer has shared the impact of rising cost. We appreciate the support of each customer in their understanding and support in this difficult time. With their help, we have been able to minimize the impact of increasing cost. Of course, as a part of our commitment, we have honored each and every open order for all the customers.
The increased price have gradually been implemented on new orders. With multiple developments getting into commercial phase, we foresee the momentum of growth to continue for next two years. Once the new green field project at JOLO goes online, it will bring in the next phase of growth. From financial year 2829, we will launch two agro intermediates with significant revenue potentials. We have successfully piloted the innovative technology by which we will produce these products at the new plant.
Besides the new launches, the Jeollwa project will also have capacities available for us to grow within our existing products. As we reflect on the journey of the company over the last three decades, it is evident that the foundation of Pathway Chindan has been built on consistent investment in technical capability, innovative technology, customer centric approach and disciplined execution. Today, we are seeing the results of the sustained efforts gradually coming together across the business, setting the stage for a more integrated and scalable growth platform.
We remain committed to maintaining this disciplined approach as we move forward with a continued emphasis on operational excellence, technology led differentiation and long term value creation for all stakeholders. We would like to sincerely thank our customers, business partners, shareholders and employees for their continued trust and support over the years. With that, I now request the Moderator to open the floor for question and answer session.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star then one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star. And two participants you are requested to use SANSIP while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star N1 to ask a question. We have the first question from the line of Siddhan Singh from Green Portfolio Private Limited.
Please go ahead.
Unidentified Participant
Hello. Am I audible?
Ajesh Pillai
Yes, you are audible.
Unidentified Participant
So to begin with, how should we think about the overall revenue growth outlook for FY27 and overall blended EBITDA margin? Like as in Q4 we have I think done achieved 21% EBITDA margin. So what is the overall outlook for FY27?
Ajesh Pillai
Yes, so the. Actually this has. The guidance has already been given in our previous calls we have already maintained that we will be growing the revenue by around 25% and EBITDA should be in range of somewhere around 20 to 22% on a very realistic basis. So we will stick to that.
Unidentified Participant
Okay. Okay. And like due to geopolitical issues like we are not decreasing our guidance like EBITDA guidance,
Ajesh Pillai
Not actually because the crisis are going up due to the geopolitical situation and other things. But gradually it is being absorbed by our customers. Our customers are cooperating although they are not being absorbed at 100% level. But probably we believe that it will gradually be absorbed and we don’t intend to change anything on our guidance in that matter.
Unidentified Participant
Okay sir, at the start of the call like you told, electrolyte salt segment will be a key contributor this time in FY27 light. What will be the percentage like if you can quantify it
Ajesh Pillai
Around 8 to 10% that we had already informed in last earning call and we are still going by this.
Unidentified Participant
Okay. Okay. And for like we are, we are getting any visibility about electrolyte salt orders like with any key customer in us or any anywhere.
Ajesh Pillai
Yeah, actually it’s a sunrise listing segment and we have been an early entrant into it. So we have been working with quite a few companies on this and we have been very transparent in our earning call about it. And now gradually we have, we are seeing that it’s materializing. The things are getting stabilized at the customers end and the uptake of the products from our end is actually increasing. So that is quite evident in the results that we provided.
Unidentified Participant
Yeah. Okay. And sir, one thing like I missed it. Like what is the commercial execution timeline for Jalva project?
Ajesh Pillai
See, we are actually at the planning state.
Unidentified Participant
We are actually
Ajesh Pillai
At the planning stage. And after the planning we would take somewhere around 18 to 20 months. So. Okay.
Unidentified Participant
Roughly
Ajesh Pillai
Around in January 2028. I mean first a couple of months of 2028 we would be commercializing the Ulga brand. We will be starting the commercial production.
Unidentified Participant
So like current facility. Like what. What is the peak utilization of current capacity? I mean revenue terms
Ajesh Pillai
Around 85%. 80 to 85% range.
Unidentified Participant
Okay. Right now we are. We are. So peak potential revenue will be around somewhere around 700 crores maximum from current capacity. And after Zolva plant we can like enhance that
Ajesh Pillai
From the current facility. It would be somewhere around 8, 850 to 900 crores.
Unidentified Participant
Okay.
Ajesh Pillai
Of revenue and Julva facilities. The revenue would be on the similar lines.
Unidentified Participant
Okay.
Chintan Shah
In multiple phases. Yes. Phase one, we estimate the revenue potential in the range of 400 to 500.
Unidentified Participant
Okay. Okay. Okay. Got it sir. And one final question. Like on the semiconductor chemistry as you told like we have. We are going to dispatch our first trial this quarter only like. But apart from that like we are seeing any more demand uptick here or any new pilot project or like we are still thinking about that. Commercialization will still be happening in calendar year 28.
Ajesh Pillai
It’s a very complex chemistry. And there are a lot of validations cycles that’s being that will be happening till that period. Okay. So it’s the plan. Plan product that is being sent as of now which again will undergo different validations. And then the final commercialization will begin somewhere around in 2829.
Unidentified Participant
Okay. Okay. Okay. Thank you so much sir. And all the best for your future. Thank you.
Operator
Thank you. Before we take the next question, a reminder to all. You may press star and one to ask a question. We have the next question from the line of Sanjeev 10 from ICS Securities. Please go ahead.
Sanjesh Jain
Yeah. Thank you. Thank you very much. I got a few questions. First on the electronic chemical this quarter we had seen a sharp jump quarterly wise. Is this the run rate we should see for the remaining year? Is that a fair assumption that what we are selling in this quarter for next four quarter quarterly basis should. Should we sustain those level?
Ajesh Pillai
It’s a sustainable growth, Sanjay. It will be somewhere around the same point in all the quarters.
Sanjesh Jain
Okay. So not yet.
Chintan Shah
Well every quarter. But on a yearly basis you can say it would be four times of this revenue is what we can project
Sanjesh Jain
Okay, so we will see a very sharp jump then next year for this. And this is only for one application or this is including both applications. Currently only for one application. Second application
Chintan Shah
Of hybrid battery will go online by somewhere in that phase of November or December of this calendar year.
Sanjesh Jain
The run rate should increase from there for that,
Chintan Shah
That should increase. But that business will also get into full commercialization. So it will be a gradual ramp up getting into full scale by 2020 when the actual vehicle launch is happening in mid of 2020. But before that probably late 27 or early 28 is when the actual ramp up will happen.
Sanjesh Jain
Got it, Got it. And for PASC this quarter we saw a decline. I thought we had a big win in pasc. How should we see PAC and is how are we seeing the agrochemical demand and the demand for our product in the next quarter? Sorry, next year
Chintan Shah
Demand is pretty stable. Why we saw this decline was not because of lack of order. Because of that has happened because of we started producing it from the new facility. We started trial production in January and commercializing February and post that we had seen lot of challenges which we had to overcome to streamline the production. That is what caused lot of delays in terms of dispatching the product. And then this has now been overcome and things are moving. So in terms of orders we have good visibility till end of calendar year, current calendar year.
And I assume the same to remain same to continue for the next year.
Sanjesh Jain
And so for agrochemical we had two products, right? One is photochlorination and the other one is the larger product. Both are seeing the production ramp up or just one of them? Yes,
Chintan Shah
Both are seeing both. Both of them.
Sanjesh Jain
Both of them are same.
Chintan Shah
Both of them. So the photochlorination product also we had lot of challenges which we gradually, gradually one after another we could sort out all the troubles. And now there as well, the production has become much more smoother and now we are seeing consistent disparity happen.
Sanjesh Jain
Got it, Got it. And on the pharma side we said we are starting one product to commercialize from the Q1 onwards. How should we see entire pharma piece for FY27
Chintan Shah
On the upper side we should see a revenue in the range of about I believe somewhere close to 70, 75 crores. In this financial. That is completely a new add on. 70 to 75 crores is a fair extended. That will be a completely new add on to our existing business. So of course there has been revenue from pharma but it was very negligible only coming from Those validation trials and stuff like that. But now the actual commercialization has begun. We are already executing couple of orders for this first product.
So production is ongoing in the display we have already started. So yeah, we have clear visibility to scale within a range of 70 to 75 years in this financial year.
Sanjesh Jain
Got it, got it. And on the SDA side, this year has been a very good year. And given that the gas prices have also gone up very sharply, which can become a tailwind for our ICE Engine Growth and Euro 7 implementation on the card. Starting with Euro, how should we see this number is sustainable? Or you expect in FY27 we will grow the SDA. Even on the high base of this year
Chintan Shah
We expect to grow at least by 20%. In this current financing,
Sanjesh Jain
We should reach
Chintan Shah
Anywhere number between 250 to 300 cr this year.
Sanjesh Jain
Got it, got it. When, when I see we have Pharma now
Chintan Shah
As, as we go ahead, you know, month on month basis, we are gradually seeing more orders being put up for the Euro 7 application. Now that is happening, that switch is happening to Euro 6 to Euro 7. So yeah, we will see that update probably somewhere around July or August is when we start seeing that update in the numbers as well.
Sanjesh Jain
Got it. So if I look at the three segments which is ess, PASC and sda, it appears that next year could be pretty Strong than the 2025% revenue guidance which we give. Right.
Chintan Shah
I will stay with 25%. See, there are a lot of uncertainties in terms of political issues that are happening. It may not hit us, but it may hit the customer. So there are a lot of uncertainties within this era. Right now what is happening is something which we have never seen historically. So I would stay little conservative with prediction of 20 to 25%. There are possibilities we can reach higher, but I would safely say, you know, to predict a growth of 25%.
Sanjesh Jain
And on the southeast, sorry, West Asia crisis, we use a lot of amines which is made from ammonia and all. How is the raw material situation and the price increase that we have taken? What is the ballpark price increase we have started taking now? Because that will also add to the growth, correct?
Chintan Shah
Yes. There was a phase of two or three weeks when nearly amines were not available at all immediately, more or less immediately after this Iran issue started somewhere in March, we lost lot many production days because of unavailability of army. But post that the availability has become very smooth. So there is no issues in terms of availability, but the prices have gone up by nearly 30 40%. So that is a deterrent. So in most of the cases we have been able to pass on that price increase to the customer gracefully.
Most of the customers have. Fortunately one accepted it. So that has not become a big challenge. There are certain cases where customers are relevant in terms of only allowing us to change the raw material price impact. Only passing on the impact related to the raw material price. That may have some adverse impact on ebitda. But largely on a broader scale with increasing volumes and a robust year that we forecast. I think that compensated with increased fuel cost and a little heat in EBITDA margins in some of the crystals should not really have any material impact in terms of what is the margin there.
Also we stay with 20 to 22% because what is happening is this improved efficiency of the plant output. The occupancy of the plant is going up. That is taking care of some of these variables which are absorbed by in terms of efficiency. So that’s the good part. The time when we are seeing the reversal in terms of demand is happening virtually at a very good time which is taking this adverse impact.
Sanjesh Jain
So we are telling that despite all this situation we will maintain the margin and growth. Probably there is a possibility of a green shoot, but we should achieve at least 25%.
Chintan Shah
Absolutely.
Sanjesh Jain
Got it. And one on the end customer, what is the feedback you are getting on ackem? Because I think there is a lot of concern on ACKEM volumes. Are you hearing the same concern from your customer for your product?
Chintan Shah
Not for. At least not for our product. And we had a very insignificant volume to the total demand. So probably we are not impacted by that. So we continue to enjoy our share of the business for those two particular products which we have newly launched. And I don’t see any challenge at least in calendar year 26. And what. What I hear is in terms of allocation, potential allocation for 27 as well. I feel we are very confident to even in the pharmacist. So both years, at least for this year and the next year.
You are very good.
Sanjesh Jain
Got it. Got it. And the new plant we started, should it ramp up from the Q1 completely and should it add to the growth? Because sequentially now. Yeah. So now it is
Chintan Shah
Working very smoothly. And that.
Sanjesh Jain
That.
Chintan Shah
See that is the only way where we can now say that we can scale up to a revenue of 850 crores from this facility. Existing facility. So even before the Jolwa plant become operational, this is the place where of course we still have certain bottlenecks. Very specific bottlenecks which we have to remove. So there would be an infusion of some capex but very minor, you know, maybe ranging 1012 crores a year kind of a thing which will help us eliminate certain bottlenecks until ramp up the revenue to arrange like 50900 crores from this.
This is only possible with this new plant which has become operational now.
Sanjesh Jain
And we should, we should hopefully reach the full potential in FY28
Chintan Shah
Next. So not this current financial year, but next financial year.
Jaya Vagasia
Yeah,
Sanjesh Jain
Got it, got it. And then on the margin earlier we used to do 25. When the plant is fully operationalized that that target also is achievable, right?
Chintan Shah
That is achievable, yeah. Then it becomes realistic. Yes,
Sanjesh Jain
Got it. And then on the Jolwa side, can you help us understand what we earlier talked about? Now we are
Chintan Shah
Into detailed engineering. So during this course of detailing we got certain feedback from our designer team basis on which we had to do some more further trials which actually helped us to optimize the process and the engineering requirements to a very large extent. So that is what held us up for nearly four or six weeks. But that has really helped us to identify that this process can be further become more robust, optimized and that reduces our need for number of reactors to be installed at the plant.
That is what we achieved during this last. So now it is into final designing state and then potentially now we will be calling in for the bids from the various construction companies for civil construction. Then I think by within next 60 days we should be breaking the ground for this from that point on. So let us say we are in mid May, we break ground in mid July. From there let us consider the time frame of into 20 months. So that is what probably calendar year 28th, early calendar year 28th, January to March.
Sanjesh Jain
And then we should be investing what 250 to 70 crores there
Chintan Shah
Roughly in that.
Sanjesh Jain
And this will have, as we said earlier, a dedicated plant and an mp, right?
Chintan Shah
Yes. This is one dedicated facility for this large agro that we are launching. And just to mention here, which I’m really proud of being done by a new technology which has been fully developed in house and we have not seen any single patent or process filed by this route of chemistry. So it is something exceptional that our team has achieved and we are really proud of that. So this is what we have now successfully piloted as well. And now it is a matter of commercializing when the plant becomes available to us.
Sanjesh Jain
Got it, got it. And then one last bookkeeping question on the tax rate. This Quarter the tax rate appears to be exceptionally high at 38%. Can you just take us. How should we take. I thought we have this tax holiday because we were enjoying the tax holiday in our Dahej facility which is the larger one. Can you take us through the tax rate? What’s. What’s happening there and how should we see it?
Ajesh Pillai
A couple of things into it. One is that we had some carry forward losses on income tax basis so the 10 AA benefits are not. We are not entitled to 10 AA benefits this year and plus the capitalization I mean the capex has been very heavy I mean around capex has added so which actually increases the deferred tax and that both of them combinedly affects the quarterly this thing Otherwise if you look at the annual figure it would be somewhere around 26%
Sanjesh Jain
And going forward should the tax rate effectively come down because we will start. Yeah it will effectively
Ajesh Pillai
Come down as as you can continue using this assets as the depreciation between the books and the income tax synchronized more the effective tax rates will come down
Sanjesh Jain
And we still enjoy that tax holiday. Right? Yeah
Ajesh Pillai
Yeah.
Sanjesh Jain
Because the tax cash what we are paying is just 7 crore but if I look at PNL it’s much much higher.
Ajesh Pillai
Yeah yes, yes, yes because of that I mean deferred taxes
Sanjesh Jain
And what is the total capex we are looking for the next what next year?
Chintan Shah
Next year
Ajesh Pillai
Current
Chintan Shah
Financial crores and 175 crores in the next finance.
Sanjesh Jain
175 crore for next financial year that will be for all JOLBAR Largely
Chintan Shah
Both 100 and 175 both control put together because it will take nearly 20 months. Right. Also
Sanjesh Jain
We are telling a part of
Chintan Shah
That will happen in this year and part of it happen in next financial year.
Sanjesh Jain
Oh so 100 crore in FY27. 175 crore in FY28.
Chintan Shah
Yes, correct.
Sanjesh Jain
Got. Got it. That’s. That’s very clear. That’s it from my side. Thanks for answering all those questions and for the coming quarter.
Chintan Shah
Thank you.
Operator
Thank you. A reminder to all you may press star and one to ask a question. We have the next follow up. We have the next question from the line of Jai Vogacia an individual investor. Please go ahead.
Jaya Vagasia
Hi. Am I audible?
Operator
Yes.
Jaya Vagasia
So my first question was on the sba. So what has happened over the past three to three and a half years is that initially we were caught up with the high cost inventory and in the latter part there was you know the fluctuation in raw material prices which really hit us hard so of course we can’t do anything about raw material fluctuation. But is this the inherent risk that the business has that in the SDA we don’t have confirmed po, we just get the visibility and then we have to make the production.
Eventually if the price fluctuation is too much, it interrupts in the pla. So is it the inherent risk in the business of the sda?
Chintan Shah
No, basically how it works is you have an annual forecast and based on that they keep releasing the orders. Usually they are very precise in terms of. Except if something becomes really unexpected. Sorry
Operator
To interrupt. Your voice is taken.
Chintan Shah
Hello?
Operator
Yes sir. Hello.
Chintan Shah
Okay. Yeah, so basically the forecast is pretty much precise. And see for example in recent times when this, during this event crisis, suddenly the raw material price is shut up very immediately post our inventory. So whatever we are holding in terms of ready inventory for the customer that we continue to ship out at the existing rate and they have readily agreed to, you know, apply the available formulas. What we have this is the consumption of these p raw materials which impact to such an extent.
So those implications have already been applied and the prices for the new POs have already been reversed accordingly. So that is not at all a risk in this particular part of business. The only risk is in terms of demand when it becomes really volatile. And that is what had happened during the past two years where demand has literally vanished because of massive uptake that happened post Covid. Lot of inventory pile up had happened and suddenly the demand flash because of that. But I think now things are pretty much normal and we are seeing very regular orders being punched in by the customers.
Jaya Vagasia
Okay. And secondly, SDA is essentially a dopam market, right? So there’s 85% around Sakim and 15 would be US. So in India our cost structures would be much better as compared to Satan. So once this Euro 7 kicks in and there is additional demand, can we expect that our market should be much better than 15%
Chintan Shah
Here it is little different way how the business happens in this segment. It is not really a price sensitive matter. So and that is the only reason why customer readily says okay, from next point have the new price allocated. So there is not much discussion over emails. It just is not a really price sensitive matter. When something is approved for one specific vehicle then there is literally no space to change it. So for example, if the tattoo product is applied to XYZ variant then it continues to remain there till the variant has its market share market presence.
So replacing somebody is not an option here for an existing business. You only get Opportunities and your doors open only for the new opportunities that comes. So that is where we have slowly started gaining momentum over our competitor. And gradually we. So for example, in euro six times we were very late entered. So a lot of things were already fixed up and we were quite late for of that part of business to sit there. But Euro 7 we are very well in time. We are, we have our foot in the door right from beginning.
So we’ll gradually see our market share keep on rising. Because yes, there is definitely a advantage in terms of pricing between us and US manufacturer. Right. So that advantage we definitely enjoy.
Jaya Vagasia
Right. So that’s what I was asking. So any model that. And here
Chintan Shah
See there are only very few select customers for our product and customers also know that there are only two suppliers for this. So they always try to keep a balance. Maybe if I say I get most of the share then I mean I may be getting 70% of the world. You will never get more than that from any particular customer or any particular product because that is how they want to keep both, both of us engaged in this business. That is the key.
Jaya Vagasia
So with Euro 7, any model with Euro 7 norms we would be wherever Sakim is, we would be there. Right? In most 85 to 90% of cases.
Chintan Shah
Yes.
Jaya Vagasia
Okay. Okay. And Jim, on the agrochem side, PASC segment, so the kind of pipeline that we have built, so going down two to three years ahead, PAS would eventually be much more bigger than the sdo.
Chintan Shah
It has definitive chances to be. So you are very correct. So if I say not two years but I would say once the jewel plan becomes operational then very much it will become much larger than the sdf.
Jaya Vagasia
And one more we have declared dividend this time I don’t understand the rationale behind the dividend. So we are, we have higher see our loans have increased, short term borrowings have increased and at the same time we are paying dividends. So it’s not justifiable. Right. Basically
Chintan Shah
The see basically it is that we retain 80% of our earnings post net. The net profit we want to distribute 20 nearly about 10% of that profit profits in terms of deliverance, I think it is pretty fair for all the stakeholders holding their keeping faith in the company, then they should be paid back. That is pretty fair.
Jaya Vagasia
We
Chintan Shah
Are plowing back 90% of the earnings back into the company.
Jaya Vagasia
Got it. But just a request that at the end I think there should be of, there should be equitability whether the P and L, the interest cost that is written in the P and L. That should also. Yeah, but it is again it’s a management decision. And so my final question was regarding the semiconductor space. So can you just throw some light on the supply chain that would be involved with. So would we be sending our chemicals directly to the export market or how would it work? Would it be sending directly?
There are intermediaries involved?
Chintan Shah
No, no, there are intermediaries involved basically. See the fab companies normally have larger companies who supply into these fab companies and the larger companies kind of work as, you know, bringing in multiple products from different, different suppliers. When this recharge them, certify them under their own coa and that’s is what they supply to the end customer. So that is how the supply chain. So it is the quality qualification first happens at this integrated level, which is definitely one very large MNC company and then the second stage of qualification happens at
Jaya Vagasia
Least
Chintan Shah
Again. So if SBA I have been saying all these years is a very difficult entry barrier, most difficult part to get an entry into this. You wait for the opportunity for years. This particular segment is even worse than that. It demands lot of questions. And when the time is right and probably we could start, we. We have been working in this since almost I think now, eight or nine years when we are seeing first size of commercialization happening now. And this is also not commercialization, this is just getting into validation, actual commercialization we expect by end of 2028, early 2029 when the product will be really used into chip manufacture.
Jaya Vagasia
Right. So as far I understand itself would be selling it to maybe Japanese or the South Korean MNC and then eventually they’d be sending it to the Taiwan. Am I correct?
Chintan Shah
Correct.
Jaya Vagasia
And the pilot plant that we have set up for the semiconductor space. So what level of purity have we achieved and what are the cost that was involved with this multi state distillation and vacuum systems would be much costly. So that whole setup is already ready.
Chintan Shah
So that setup is already ready. We are going to actually display our first commercial scale batch. Not the pilot scale. Pilot scale drives have been finished long back. Now we are talking of our first plant scale batch which has to be dispatched in this quarter. That whole setup is in place. And when we are talking in terms of purity levels and not purity. So purity is unsaid. It goes as 99.99 something. But in terms of impurity levels, we are talking of impurity profiles all below 150B1 parts per billion.
So we are talking of thousand parts per trillion range.
Jaya Vagasia
And so this, these chemicals, where would it be used? Would it be used in itching or cleaning process or. Right. Right, sir. Thank you so much, sir. That’s it for me.
Operator
Thank you very much, ladies and gentlemen. We will take that as a last question. And with that concludes the question and answer session. I now hand the conference back to Mr. Ajesh Pillai for the closing comments. Thank you very much.
Ajesh Pillai
Thank you. On behalf of Tatva Chintan, thank you for joining us on today’s earning call. We trust that we have addressed most of your questions during the discussion. Should you require any further clarification, please feel free to reach out and we will be happy to connect offline. Thank you.
Operator
Thank you, members of the management, on behalf of ICIC securities, we conclude this conference. Thank you all for joining us. And you may now disconnect your now. Thank you.