Aarti Industries Ltd (NSE: AARTIIND) Q4 2025 Earnings Call dated May. 08, 2025
Corporate Participants:
Suyog Kotecha — Chief Executive Officer and Executive Director
Chetan Gandhi — Chief Financial Officer
Analysts:
Nishith Solanki — Analyst
Kumar Saumya — Analyst
Aditya Khetan — Analyst
Vivek Rajamani — Analyst
Abhijit Akella — Analyst
Arun Prasath — Analyst
Unidentified Participant
Harsh Shah — Analyst
Surya Narayan Patra — Analyst
Siddharth Gadekar — Analyst
Jay Bharat Trivedi — Analyst
Meet Vora — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to RP Industries Q4 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Nishit Solanki from CDR India. Thank you, and over to you, sir.
Nishith Solanki — Analyst
Thank you. Good evening, everyone, and thank you for joining us on RT Industries Q4 and FY ’25 earnings conference call. Today, we are joined by senior members of the management team, including Mr Suyav, Executive Director and Chief Executive Officer; and Mr Chetan Gandhi, Chief Financial Officer. We will commence the call with opening thoughts from Mr on the Q4 and FY ’25 performance overview and outlook, post which we shall open the forum for Q&A where the management will be addressing queries of the participants.
Just to share our standard disclaimer, certain statements that may be made in today’s call may be forward-looking in nature and the disclaimer to this effect has been included in the results presentation that has been shared earlier and uploaded on stock exchange websites. I would now like to invite Mr to share his perspectives. Thank you, and over to you, sir.
Suyog Kotecha — Chief Executive Officer and Executive Director
Thank you, sir. Thank you, Nishit. Good evening, everyone, and thank you for joining us today. Apologies for joining this call 15 minutes late. Let me begin by acknowledging FY ’26 has started on a major note, coupled with new uncertainties such as US tariffs the overall external environment remains volatile marked by increasing global uncertainty stemming from geopolitical events and evolving trade dynamics, requiring us to remain agile and adaptable in our strategic planning.
Having said so, we’re seeing encouraging signs of stabilization in-demand across several End-User industries and underlying volume growth across our businesses. The growth is being supported by our strategic initiatives to diversify our product portfolio, expand our geographical reach and strengthen our customer relationships.
Overall, we are well-poised to navigate the current volatility and capitalize on the future growth opportunities within the evolving chemical landscape. I’m pleased to share that we ended the challenging year with a positive note. We clocked in total revenue of INR8,046 crores, posting a growth of about 15%, while EBITDA grew by about 3% to INR1,016 crores on a consolidated basis.
Commercialization of our various projects and higher interest-rate — higher interest costs in FY ’25 did increase the depreciation and finance cost components resulting in PAT of INR331 crores. Speaking now about our Q4 performance, it has been steady on a sequential basis. We clocked in revenues of INR2,214 crores, marking a 9% quarter-on-quarter growth, largely driven by volume recovery across all end applications. EBITDA for the quarter came in at INR266 crores, reflecting a 13% sequential improvement.
Likewise, PAT increased to INR96 crores, mostly driven by better cost efficiencies achieved through higher volumes. Considering the annual performance, the Board has recommended a final dividend of INR1 per share for FY ’25. Speaking to specific applications, I think volumes for energy application grew 21% quarter-on-quarter enough linked to our strategy of diversifying and widening customer-base and geographical spread as well.
On the other hand, the base business has also shown a good volume recovery across chains such as, nitrochloro benzenes and ethylation-based products, also linked by our new capacity additions and improving demand landscape. These segments have also contributed sequential uptick in overall performance and will now remain a focus area moving forward.
Our volumes in this segments grew by 14% quarter-on-quarter basis. Even an agrochemical inventory level seems to have stabilized now, the demand for other end-use applications like dyes, pigments, polymer additives also remains positive. We are anticipating this volumes to continue this growth path as we move forward into the FY ’26 timeframe. Earlier this year, we signed two renewable energy power purchase agreements for solar and hybrid power with Clean and frazil.
These agreements are also on-track with one of them expected to start delivering within this calendar year and the second one expected to begin by end FY ’26 or early FY ’27. Upon commencement, this will lower our operational costs and provide sustainability benefits by facilitating also a transition to cleaner, more resilient energy landscape. Sustainability continues to be a key driver and focus area for future roadmap.
And I’m happy to inform that AIL has been elevated to the CDP Leadership Bank for its outstanding performance in climate change and water security. Our ESG score also improved significantly to 62 in S&P Global DJSI Index, Sustainability Index, positioning us in top-decile of global chemical companies. We have also maintained gold medal for in the EcoVadis CSR assessment for 2025, marking our fourth consecutive year of excellence.
Our score has also improved to 78, up from 72 last year. This places us in top 5% of the company business by. AIL has also been granted approval by Indian Chemical Council to use Responsible Care logo now for a three-year period from April ’25 to March ’28. All of these accomplishments reflect our unwailing commitment to the responsible care principles and highlight our dedication to sustainable practices and ethical conduct across all aspects of our operations.
In FY ’25, several cost optimization initiatives, both variable and fixed were also successfully completed and we plan to achieve similar targets in FY ’26. The key achievements include successful implementations of back pressure turbine projects to improve steam efficiency, scaling up our generation through the first phase of hybrid power project, which also helped us reduce carbon footprint and generate cost-saving, yield improvements across key products value chain such as,
Nitrochloro, benzene and hydrogenation products. Additionally, we continue to take steps to optimize our fixed costs and we are progressing quite well on that dimension. On capex front, for FY ’25, we stood at about INR1,372 crores, in-line with our expectations. Our large project initiatives at Zone 4 are being executed in phased manner and with the commissioning scheduled to progress in a staggered manner throughout FY ’26.
Our newly operational pilot plant at Zone 4 has already commenced commercial operations. It will play a vital role in driving new product development, foresting innovation and supporting diversification of our offerings moving forward — moving forward. And based on our current plan, we expect capex for FY ’26 to be in the range of INR950 crore INR1,000 crores.
To sum-up, while the external environment remains volatile, we are encouraged by our business resilience, agile cost-control measures and clear path to capital discipline. We are entering FY ’26 with a strong execution pipeline, healthier balance sheet and a sharp focus on delivering sustainable and volume-led growth.
Thank you, and I now welcome any questions from participants.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw yourself from the question queue you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen we’ll wait for a moment while the question queue assembles, First question is from the line of Kumar from Ambit Capital. Please go-ahead.
Kumar Saumya
Hi, sir, good evening. My question. So my question is on the volume growth. So if you could give us indication on the year-on-year volume growth in FY ’25 as well as the 4th-quarter?
Suyog Kotecha
So I think on a 4th-quarter on a quarter-on-quarter basis, you know non-energy business grew roughly by 40-odd percentage and the energy business grew by almost 21%. I think that energy business volume growth was also linked to, as we explained in the last call, one of the shipment had got pushed out from Q3 to Q4.
And so that’s the range of volume growth numbers. If you look at year-on-year numbers, FY ’24 versus FY ’25, we are roughly at around 17% growth at overall portfolio levels.
Kumar Saumya
And we expect to continue this growth momentum, at least in the volume side.
Suyog Kotecha
So look, I think if you look at the capacity utilization numbers that we’ve given value chain by value chain clearly shows that we have significant upside to drive volume growth based on existing asset footprint. And we remain very aggressive in the market to capture growth as well as increasing market-share to ensure we drive-up our capacity utilization levels.
Kumar Saumya
Yeah, sir. Thank you. I’ll come back-in the queue.
Operator
Thank you. Thank you. Next question is from the line of Aditya Khetan from Swiss Institutional Equities. Please go-ahead.
Aditya Khetan
Thank you, sir, for the opportunity. I have a couple of questions. Sir, on to the agrochemical business, we had witnessed that volumes had reported an uptick, but pricing still remain under pressure. Any specific reason, sir for this because the destocking cycle has ended roughly around nine to 10 months back. So why are the prices still weak?
Suyog Kotecha
I think we covered this in some of the earlier comments. I think overall, our perspective is the inventory destocking story got done sometime back. I think there’s a genuine demand-supply imbalance issue for the agrochemical intermediates and downstream technicals. We are seeing volume recovery for sure.
But given the amount of overcapacity that exists in China, that incremental volume growth has also served by marginal pricing and that’s where we are not seeing uptick on pricing/margins at this stage. And going-forward, especially with the — with the US tariffs announcement, there are some movements happening in the overall agrochemical value chains and we expect at least from a downstream product flowing to US point-of-view, there should be positive traction.
And in that context, the requirement of intermediate from — for our domestic customers is expected to go up.
Aditya Khetan
And sir. So this should benefit after the tariff imposition or you think the day — so the demand-supply dynamics will automatically adjust and we can see improvement in the. So from the very first day?
Suyog Kotecha
No, I think it will — it will take its own time to adjust. What is very clear is that the volume and the demand growth is there. I think pricing and margin is a bit of a complex question to answer because there are second, third order impacts, right? If the downstream exports of Chinese technicals and formulations gets impacted, I think they will also have a tendency of dumping the intermediate product portfolio in the remaining part of the world.
And in that context, how we another market we protect ourselves from that dumping will also determine to some extent our margin profile for those intermediates. So I think the impact coming out from US tariff, especially on the agrochemical sector, I think the second, third order level of impact is yet to become visible. And our sense is it will take a few months-to play-out.
Aditya Khetan
Got it. Sir, when we say that the agrochemicals and pharmaceuticals volumes are witnessing an uptick even the dyes segment also. So why the dichlorobenzene volumes in second-half is relatively weak compared to first-half.
Suyog Kotecha
So dichloro benzen, the end application is actually polymer, right? It’s — I think PDCB specifically goes into polymer segment mostly into PPS, which is used into automotive kind of applications. And that segment has been under pressure from a demand point-of-view. So I think in the first-half, we were actually expecting much more inventory correction by some of our customers in US and Japan, and that’s what impacted DCB chain volumes.
But again, even in that case, you know, we have seen some level of inflow coming in, especially from the US customers to advance their shipments in the first quarters to have certainty around the tariff impact. So we’ll see slightly different behavior over the next three months. But in general, the DCV volume question that you asked was more linked to polymer and application. It was not linked to the other two applications.
Aditya Khetan
Got it, sir. Sir, just one last question. Sir, this quarter Sabik, which is the Saudi chemicals giant, so they have also reported loss at the bottom-line. And sir, one of our long-term contract is linked with Sabik. So does this change or alter any of the offtake agreements with them?
Suyog Kotecha
No, there is no impact on our arrangement at this point.
Aditya Khetan
Okay, got it. Thank you.
Operator
Thank you. Next question is from the line of Vivek Rajamani from Morgan Stanley. Please proceed.
Vivek Rajamani
Hi, sir. Thank you so much for the presentation and congratulations on a good set of numbers. Two questions from me. Firstly, on the MMA side, I think you mentioned in your comments that you have made progress on expanding the customer-base as well as the geographic base. Could you just talk a bit more about what kind of customers these are and what kind of impact they could have in terms of the pricing as they ramp-up? That’s the first question.
Suyog Kotecha
So I think the M&A for — as we mentioned earlier, I think we obviously trying to diversify consumption, which was more concentrated mostly towards Middle-East. And now we are seeing increasing supplies going to US in some of the high fuel supplies going into Europe as well as the Indian volume is also looking up.
So in that context, the broader geography diversity — diversification is playing out. At this point in time, we remain focused on-market development, right? And the objective is that we have a significant capacity to produce this particular product and we remain focused on developing the market and ensuring there is a much wider customer-base which has used the product, understood the value proposition and is able to consume it in sort of larger quantities in their end applications.
And from a pricing and margin point-of-view, you know, it’s relatively linked to raw-material in most cases. And I think most of the global markets do understand it to a great extent now, analy is a key raw-material which drives ultimately the MMF price. At the same time, there is also impact of the downstream end-market, right?
As we’ve explained before, there is ultimately the viability of the product to the end-customer is linked to, you know, the gasoline NASTA economics and gasoline food economics. So combination of the two is what determines the pricing. But right now, our focus remains on developing the market for the higher volumes?
Vivek Rajamani
Sure, sir. Thank you so much for that. The second question I had was more from the broader customer-base. I just wanted to get your thoughts with everything that’s happened recently in the past few months, how are the customer conversations generally evolving into the remainder of ’25 and ’26? Is there more uncertainty? Is there, you know a shift towards probably more short-term contracts? Could you just give us a sense of how the customer is thinking about everything that’s been evolving? Thank you.
Suyog Kotecha
Okay. So I think if you’re asking specifically about M&A, then I think you know, as I said, we are in a development phase. I think every conversation is sort of discovery of a new client, taking them through the entire sampling qualification trial, still sort of try and test kind of mode. And that journey continues.
Vivek Rajamani
Sorry, yeah. No, I was actually talking non-MMA. I think you covered MMA.,
Suyog Kotecha
Yeah. On non-MMA, frankly, the volume — volume is still — volume growth still looks very strong. I think, yes, the recent events do pose a challenge where some of the customers start going into sort of holding decision kind of mode, right, because there is so much uncertainty around what’s going to happen to tariff, what’s going to happen to-end market growth, you know, will there be recessionary pressures, will growth rates come down.
I think in that context, we saw there was a phase-in which there is kind of holding pattern where people start pushing out key decisions. But over the last few weeks, we have also started seeing people coming back, right, and sort of moving on with respect to regular business. In general, we are anticipating in The tariff issues to settle down over the course of next two to four months and that will definitely bring much more clarity in terms of how the final trade flow will settle.
Vivek Rajamani
I’m sure, sir. I’ll rejoin the queue. All the very best.
Operator
Thank you. Thank you. Next question is from the line of Abhijit Akelia from Kotak Securities. Please go-ahead.
Abhijit Akella
Yeah, good evening and thanks for taking my questions. So you have first on the outlook for fiscal ’26, would it be possible to share any revenue or EBITDA kind of targets you have for the year? I know there’s a three-year target out there, but anything you would like to share for fiscal ’26, please?
Suyog Kotecha
No, I think we are — Abhijit, we are not talking about specific yearly guidance we mentioned that last-time, right? We’ve set-out a strategy for the three-year and I think the only thing I can confirm is we remain on-track to deliver that three-year numbers. Of course, not all of it is back-ended.
I think we’ve also given clarity on initiatives that will lead us to that range, right, and initiatives are a combination of cost, operating leverage related ramp-ups and then new capex-led growth. And in this time’s presentations, you’ve also talked about at least given some indication of which of these initiatives are completed, which of these initiatives are sort of ongoing and advances of completion.
So in that context, what we can say is that we continue to remain optimistic about volume-led growth for the coming financial year. From a three-year standpoint, we are not changing the guidance that we had given earlier and we feel confident and can remain on-track to achieve that.
Abhijit Akella
Okay. Second, just on the tariff impact, are most of the products you export to the US exempt from the tariffs? And if so, what sort of implications, if any, do you see for your business in the context of this whole tariff developments?
Suyog Kotecha
So I think the — if you want one-line summary, then I can say that the overall US tariff impact on AIL is a bit mixed, right? And because it is complex, we have a wide variety of the product portfolio and different products have different implications because some products are part of 2, some products are not part of 2.
In general, the products where we are directly competing against China and if they are not exempted, if they are not part of 2, then in that context, of course, we have a positive tailwind. And likes of, for example, NTDA is one of the products in PDA chain, where in the near-term, we are seeing positive demand traction because it’s not part of exemption and the competition was from China. So there is a clear credit advantage.
While there are some products which are part of exemptions, but even though they are part of exemptions, I think there is a tendency generally coming out from the market to see if they can source better volumes from India, India provided we are able to meet the pricing expectations.
This is the second category of products and there are a lot of products in that category, especially in the sort of agrochemical science and life sciences. And the third category of the product is like, for example, M&A where we are not really frankly competing head-on with any particular manufacturer, but it’s more of a market development effort that we are doing.
In that context, of course, tariffs have a negative impact because they straight away add cost to the product for the final customer and the economic viability does get a little bit compromised because of increased costs. So I think three types of scenarios I described, all of them have different types of impact. And we are not even talking about second, third order impact, right?
Right now, we are talking about a direct product level impact, but in the overall three to four months timeframe, the second and third order impact will also start to come through in terms of what happens to end-use sector growth, what happens to US demand, what happens to the extra volume that gets feed up from China.
So all of that is expected to play-out over the course of next few months and quarters. At current level, based on our best judgment, we can say it’s a mixed impact on AIL certain products are definitely seeing positive traction, whereas for certain products, you know, we’re trying to adjust the pricing to ensure that the tariff impact is absorbed by the both sides in a fair manner.
Abhijit Akella
Yeah, that’s a really helpful color actually. Thank you for that. And just one last thing for me before I rejoin the queue. Just on the capex outlook for fiscal ’26, the INR1,000 crore approx number. What projects specifically is that going into the bulk of it? And from a revenue growth standpoint for fiscal ’26, is it coming primarily from better utilization of the existing product capacities or are there any significant contributions from the newer projects you are commissioning, say, for example, Zone 4 engine that’s getting commissioned? Thank you.
Suyog Kotecha
Yeah. So I think bulk of the capex spend that we have committed right now is going to Zone 4. I think we will complete the zone for capex by and large within this financial year and a significant part of that number is sort of reserved for that. In terms of volume growth for this year, large part of it will come from existing assets which are already commissioned.
Zone 4 staggered commissioning will happen throughout, let’s say, quarter three, quarter-four of this financial year, especially the multipurpose plant, the Calcium chloride plant is expected to start-up in Q3. But we don’t think there will be a significant addition to volume growth based on this.
This will take time to stabilize ramp-up during this financial year and the volume growth from all of these assets will actually start to get reflected from the next financial year. So yes, this year, I think we are pushing for volume growth from the existing assets which are already stabilized and ramps-up.
Abhijit Akella
Understood. Thanks a lot and all the best thank you.
Operator
Thank you. Next question is from the line of Arun Prasad from Avendus Spark. Please go-ahead.
Arun Prasath
Good evening. Thanks for the opportunity. So good morning. First question is on the impact of the current crude prices on the. So I understand that our margin — I mean, probably our realization will also go down as the crude price come down, but what will happen to the spreads, especially the gasoline NAFTA spread, will it — historically has it come down and that will also have impact on the M&A margins that we will be realizing?
Suyog Kotecha
So Arun, as the crude prices has corrected very sharply and at absolute level, gasoline and NAFTA have also corrected. The gasoline NAFTA has actually widened a bit if you look at the March numbers or April number for that matter. So — and as I described, I think absolute prices are of importance, but at the same time, the delta is also of larger importance because that’s what determines the liability of the product.
So that’s first. Second, as the absolute prices are coming on the crude gasoline side, even the raw-material is also coming down quite significantly. And so that — though of course, there will be a lag in terms of adjusting the raw-material from inventory valuation standpoint because bulk of this raw-material is imported from out of India.
So usually there is a lag of 1.5, 2 months-to get the pricing adjusted from a raw-material costing point-of-view. But there’s also significant correction on that front. In that context, I think overall, you know, we feel like the current gasoline NASTA differentials are maintained, then we are hoping to continue on the volume trajectory.
Arun Prasath
But directionally, the spread increase on the lower crude price, is it a short-term event and it will revert to the mean over the medium-term? Is it the right understanding?
Suyog Kotecha
Finally, you know, I would be totally honest, very difficult for us to forecast on gasoline, right, especially different road price environment. I think I have seen now forecast from three different agencies in last six months and none of them have panned out the way it was supposed to be. So what we remain focused on is to ensure that what’s important for us at this point in time is that the product is available to more-and-more customers in the global market and that’s what we remain focused on.
The current level of differentials is good enough for people to try out this product and sort of scale-up the usage of this product. And third aspect is we continue to optimize on our cost, right, both raw-material as well as operating costs to ensure that we are able to offer better value proposition to our customers.
Arun Prasath
Great. Understood. Second question is on our EBITDA three-year EBITDA growth outlook that we have given out of that three buckets. One is cost optimization and then volume ramp-up and then capex led growth. Is it fair to assume that the cost optimization that we will be realizing this year in FY ’26?
Suyog Kotecha
From an implementation point-of-view, bulk of it will be get done in FY ’26. The — from a EBITDA accrual of that saving initiative point-of-view, it will go into — I think the full accruals will happen into next — sort of not in this financial year, but The next financial year, especially the hybrid projects which are expected to contribute also significant value. They will start accruing to bottom-line fully from start of FY ’27. So implementation wise, yes, accrual point-of-view are slightly delayed
Arun Prasath
Even for the cost optimization bucket.
Suyog Kotecha
Yeah, especially the hybrid power part of it.
Arun Prasath
Okay, understood. So largely this ’26 fiscal earnings growth will be led by the macro parameters
Suyog Kotecha
Yeah. I think as we said, I think we remain focused on driving up utilization for surplus capacity that we have in the existing and then continue to optimize the cost.
Arun Prasath
Understood. Thank you very much. All the best. Thank you.
Operator
Thank you. You. Next question is from the line of Gupta from Geogit PMS. Please go-ahead.
Unidentified Participant
Good evening. So my question was what exactly would be the reason for higher expense growth than the sales growth, even though the sales volume has grown a lot, but the number-wise, the expenses have grown a lot, but the sales number has not grown as much. So what would we attribute that to?
Suyog Kotecha
So there is an increase in global valuation segment. So the export numbers have been significantly higher. If I had to put the number out, 55% of revenue for the quarter is from export as compared to the previous year where it was close to, 48% 50% kind of stuff. So that is going to to increase in the freight cost.
Unidentified Participant
Okay. And you will — you are saying that after the cost optimization takes place, then the margins will improve and this profitability will go up.
Suyog Kotecha
Yeah, that is how it will pan-out.
Unidentified Participant
And with decreasing price — crude oil and petrochemical prices, do you see that the volume growth can offset the pricing pressures
Suyog Kotecha
I think I think both frankly are a little bit dealing. I think the — for us from a — if you look at the reducing price environment, right, if you really want to sort of go a bit deeper into the analysis, what are the major raw materials that we consume, right? We have benzene, we have nitric acid, we have analyline, right, and we have to some extent.
Out of which benzene and nitric acid, we practically operate on very, very limited inventory. We are talking about one to five days kind of inventory. So in that context, the pricing impact in our inventory is immediate, right? So our ability to manage that to our customer is very, very-high versus is where we import the raw-material.
So of course, we have to maintain certain inventory and then there is a 1.5, two month lag in terms of reflecting the latest market pricing into our inventory valuation, which is where we have to manage the inventory valuations to some extent while ensuring that we give the best possible service to our customers. But so on a net-net basis, from a volume growth point-of-view, we manage our inventories and pricing in a way where we don’t let that impact our volume growth and that’s been the philosophy for the operations.
Unidentified Participant
Okay. Thank you. That is all from my side.
Operator
Thank you. Next question is from the line of Harsh Shah from HSBC Asset Management. Please go-ahead.
Harsh Shah
Hi, just one question. In your balance sheet, your data days have reduced on a Y-o-Y basis. Inventory days more or less is the same. But your payable days have more than doubled. What is the reason for that? Because if you look at from a cash-flow perspective also apart from operations, increase in data days has led to a significant cash-flow accretion for you in this year. So yeah, what is the reason for that
Chetan Gandhi
That’s more of the — some of the import of raw materials which is and everything comes at a longer credit, which is where the numbers have gone up. And also the consumption over the last 12 months have been significantly higher. If you look at the volume data of different products, MMA, the volume numbers across two years have increased by more than INR38 crores to 38% or so. So that has resulted in higher consumption of annually and higher import of annually which comes little longer credit.
Harsh Shah
Okay. Okay. And entering FY ’26, will this remain like this or will this reduce? Because this is again also one of the reason why your — as such net-debt has remained range-bound?
Chetan Gandhi
That should remain like I guess with increase in the volumes, probably there could be a bit of an uptick every opportunity available. But broadly I will say between here and a bit of increasing those numbers, we will be some at midway.
Harsh Shah
So as a company basis in the whole of FY ’26 or you can also guide for H1 if the outlook is still not there. What is the overall working capital days in that you are looking at?
Chetan Gandhi
Yeah. So it should be somewhere between 70 to 80 days kind of stuff. We will some more for some numbers, but yeah,
Harsh Shah
Because ideally that will lead to reduction in payable days which will again shoot up your debt position. Your cash may not be able to handle that much of reduction in payables. Yeah.
Suyog Kotecha
No, I think that if you look at the absolute number of working capital, I think we feel pretty comfortable with where we are. And I think without increasing the absolute INR crores in working capital, we should be able to handle the FY ’26 volume-led growth is our current sense.
Harsh Shah
Okay. So just last question from my end is with respect to net-debt, you closed the year somewhere around INR3,500 crores. For FY ’26, how will this number look like or directionally?
Chetan Gandhi
So directionally, I guess we would have peaked out, we would expect the number to be lower. We are expecting some unlocking of cash-flow from working capital as well. So plus the capex intensity is also going down. So directionally, I expect the number to be lower by maybe INR200 crore INR300 crores kind of stuff.
Harsh Shah
Okay. Okay. That’s it from my side. Thank you. Thank you and all the best.
Operator
Thank you. Next question is from the line of Vish Toka from Nuvama. Please proceed,
Unidentified Participant
Good evening, sir. Atchit here from Nuvama. Sir, I wanted to get a better sense of your growth prospects in FY ’26, given that we have given our utilization levels, I think it’s quite conceivable that PDA, hyprotylene and ethylation, these are the kind of low-hanging fruits here. What would be the utilization for NCB and DCB given that we are above 70% even in hydrogenation, where could we peak out? And if you could just give a directional sense of how do we see these three value chains of PDA, nitropylenes and ethylation in terms of any visibility that you can give with regards to volume growth in FY ’26.
Suyog Kotecha
So look, I think we’ll talk about value chain specifically on — so let me start with PDA, which has frankly been underperformer for last few years. If you go by the — if you go by the current latest trends, I think we expect significant uptick in utilization levels because of increasing demand in US given by tariff issues. And so that trend should see higher-level of utilization compared to last year.
Our NCB, as a chain, given couple of large customers are increasing their capacity, bulk of the application there is pharma and both large customers are increasing capacity. So through the year, we also expect the NCB capacity utilization to go up from the current levels. DCB, frankly, we expect you know, maybe we should be able to maintain the current level of utilization level.
This is where we are — there’s a mixed bag in terms of the downstream consumer demand of PPS, which is going into automotive and a little bit of pressure and depending on how US and Japan plays out, there could be some impact on the demand of DCD chain. So broadly, maybe we are able to maintain the current levels. And and ethylation are linked to each other because NT provides raw-material for the ethylation chain.
That’s where the — the lifecycle — sorry, the life sciences and the agrochemical story comes into play. And we are expecting higher utilization compared to last year for this particular chain. But it is a ramp-up process because we expanded capacity very recently the full capacity actually got proven only in Q4 FY ’25. So it will take a bit of a time to ramp-up the capacity utilization level, but nonetheless the number should be better than the last year.
Unidentified Participant
Sure, sir. Got it. That’s helpful. I just have another one on M&A. I was just reading some articles with regards to some new competition beefing up in China. I think there’s a company named New Materials who is planned of 4 lakh ton capacity, almost double of our size. While I’m aware that the opportunity for developing this market
Unidentified Participant
Is immense. But do we see this trend of either switching from MTB to M&A or developing this market even in other areas is becoming a trend and would that be of any impact to us in the near to mid-term?
Suyog Kotecha
Yeah. No, I think competition will come, right? I think people do track us closely and in that context, it is expected that competition will come up as and when we scale-up certain products. But that’s perfectly fine. If more people are trying to the market, it also works in industry’s favor.
We do have a certain unique advantage for this particular product. I think, of course, we have a head-start in terms of supply-chain capabilities that we have built over the course of last two years that allows us to do some unique things which are not available to a lot of other players. Including, I think some of the freight components, especially if you’re sending bulk shipments to Middle-East or Europe or US, I think we are slightly better-positioned in this stage compared to competition.
And in addition to that, I think we — we remain sort of in the market aggressively to expand more-and-more customer-base. So of course, we are expecting competition in the product and people will ramp-up capacities over the course of, we don’t know, maybe a year, maybe a two, but at the same time, we feel the market is large-enough to absorb the volumes and we do build certain competitive advantages, which allow us to better capture the market-share.
Unidentified Participant
Sure, sir. That’s great. Thank you and all the best for the next year. Thanks.
Operator
Thank you. And the next question is from the line of Surya Narayanpatra from PhillipCapital. Please proceed.
Surya Narayan Patra
Yeah. Thanks for the opportunity, sir. My first question is on, let’s say, on the MMA, say, sir, since it is a new product area and we have been seeing a kind of rapid expansion in terms of volume over the last few years. So given the kind of a new customer addition and all that, so how do you see the progression and growth in terms of volume for this product, let’s say, for FY ’26?
Suyog Kotecha
I think we’ve described what’s our current capacity and we also said that over the course of next two years, we are targeting to utilize that capacity and that’s where I think we will remain focused. And whether we take 12 months, 18 months, 24 months-to reach to a decent level of capacity utilization will be linked to the success of market development efforts.
But that’s the overall strategic direction that the current capacity numbers we should be able to develop market good enough to absorb that volume in a two-year kind of timeframe.
Surya Narayan Patra
Okay. Okay. So overall, let’s say that the overall growth for FY ’25 if you see it is entirely led by the volume-led growth. So given the kind of new projects that we commissioned in the later part of the FY ’25 and hopefully and potentially the chlorotolerant, which is likely to also come in the second-half of FY ’26 and also the likely ramp-up in the MMA volumes given the new customer addition. So now going ahead for FY ’26, is it fair to believe that the volume-led growth, again, it would be a volume-led to growth and the volume-led growth would be better in FY ’26 compared to ’25.
Suyog Kotecha
So right now, our base assumption, we are factoring in most of the growth led by volumes. So yeah, we are not factoring a significant recovery in the margins because we don’t see the demand-supply imbalances from China getting corrected soon. So however, though that’s correct at a macro-level, I think from a near-term point-of-view, there are — there are events which are difficult to predict, right, how the US tariff scenario will pan-out, how the geopolitical uncertainty will pan-out is difficult to predict at this stage.
But from a management’s focus point-of-view, I think we remain focused on delivering the volume growth. Margin is a function of a lot of external factors as well. If there is opportunity, we’ll capture it, but that’s not a base assumption with which we are going into the financial year.
Surya Narayan Patra
Okay. Okay. Just even slightly more clarification. Let’s say, is it fair to believe that the volume-led growth what we are talking about for FY ’26, so that would be higher than the FY ’25 growth what we have seen or not predictable at this moment.
Suyog Kotecha
I think difficult to comment. Look, I think we don’t want to start talking about sort of quarter-on-quarter exact sort of volume growth. I think we have certain assets. We’ve been very transparent with respect to where we are on the capacity utilization for these assets. And in a three-year plan, if you see bulk of the operating leverage-oriented initiatives, we are targeting to finish it in the first two years, right?
And that’s where we expect most of our assets, buying few where we have, let’s say, costing issues where we are not competitive with respect to the world-scale assets from other players, we should be able to reach respectable level of utilization levels within the first two years kind of timeframe.
Surya Narayan Patra
Okay. Sir, since it is the full-year result that we are discussing, is it possible to just update about what is the kind of a level of performance that we are having for the long-term contracts? So whether we are in the expected lines or it is slightly below given the kind of demand situation that is prevailing currently or how should we be thinking about the long-term contracts that been doing so-far for FY ’25 and what is the likely outlook for those contracts for FY ’26.
Suyog Kotecha
Yeah. Look, I think contractually speaking, you know the — I will take the simpler ones first. I think the 20-year purchase agreements that we have for nitric acid continues to perform exactly as per contract. No issues on that front the other project that we have, which is where sort of our profitability is ensured, right, it’s polymer application with a global major. I think that continues to run very well. No changes on that front.
And there is another contract which we had with US major for a very advanced specialty polymer intermediate, which has started ramping-up only last year. We are we are expecting that to do even better in the coming year, right, with the asset now stabilizing and demand kind of picking-up. I think those are the easier ones. I think rest of the contracts are sort of a — they’re kind of a sort of supply contracts for some of the key intermediates.
There individually, depending on the end-market applications, there will be a variation, right? I think the contracts ensure that there is a relationship between the two parties where we have sort of privileged access to each other and there are certain contractual terms in terms of volumes and pricing, but they do vary linked to-market conditions and that’s how it is playing out at this point in time.
Surya Narayan Patra
Okay. So just one question for the, sir. So what is the export number for the quarter, sir?
Chetan Gandhi
The export number for the quarter was roughly INR1,240 crores.
Surya Narayan Patra
Okay, INR1,240 crores. Okay. So there is a kind of mark improvement sequentially that we.
Chetan Gandhi
Yeah. So as you said earlier and it was shared in the last call, a couple of bulk shipments of exports, which were expected to move-out in Q3, end of Q3, which did move and which moved out in Q4. So that has also been one of the factor why some of this bit of this number is higher. But yeah, there is a significant improvement in export volumes as we are witnessing.
Surya Narayan Patra
Okay. And so if there would be a kind of a normalization in the export, then the other expenses are also likely to see a normalization going ahead or
Chetan Gandhi
Export has a higher component of freight, which is why you see the other expenses going up. If I have to specifically look at the fixed-cost actually has been lower on a sequential basis or more like a lower to cappage kind of a situation. It’s more of this freight and other components in this.
Surya Narayan Patra
Okay. Thank you.
Operator
Next question is from the line of Siddharg from Equirus. Please proceed.
Siddharth Gadekar
Hi, sir. First on the tax-rate, how should we think about the tax-rate for FY ’26?
Chetan Gandhi
We have a — we still have one more year of heavy capex cycle, which is where the IT depreciation is going to be high. So we continue to remain lower and subdued on the tax-rate. I know this year we’ve been negative on the tax-rate level. I expect it to be in somewhere close to mid-single digit in next year.
Siddharth Gadekar
Okay. Secondly, on the trade payables, I was not clear on your answer that trade payables have jumped by INR600 plus crores this Year. How should we think about this number going into FY ’26 and ’27?
Chetan Gandhi
I believe there will be a potential uptick of maybe around INR100 crores to INR150 crores in — within INR100 crores INR200 crores in next year, assuming the volumes continue to grow in the trajectory here.
Siddharth Gadekar
So the trade payables will increase your thing by another 100. Okay, got it. Thank you.
Operator
Thank you. Next question is from the line of Jay Bharat from Incred AMC. Please go-ahead.
Jay Bharat Trivedi
Hello. Am I audible?
Suyog Kotecha
Yeah.
Operator
Yeah. Yes, please go-ahead.
Jay Bharat Trivedi
Hi, thank you for the opportunity. First question I have is with is with regards to the capex that we are doing, the INR1,000 crore capex that we have estimated, how much of it would be maintenance capex and how much of it is in the nature of new chemistries or new products what we are getting into?
Chetan Gandhi
And I guess the maintenance capex and some CapEx-related to some of the initiatives which are there on existing products should be in the range of INR150 crores to INR100 crores or so. Beyond that, everything will be for the new initiatives. The zone 4 is going to be a bulk of that?
Jay Bharat Trivedi
Okay, sir, INR150 crores to INR200 crores is the maintenance CapEx interest is for new products, correct?
Chetan Gandhi
Yeah. Yeah.
Jay Bharat Trivedi
Okay, sir. And I was just quickly doing some numbers on the guidance which you have given for FY ’28. For the INR1,800 crore to INR2,200 crore EBITDA, will our PAT fall around INR900 crore to INR1,000 crore in the INR900 crore INR1,000 crore range or am I a far off? I don’t want an exact number, but am I in the same lines what your assumptions are?
Chetan Gandhi
See, if I want to to indicate, my depreciation, which is currently at around INR430 odd crores should be somewhere between INR500 INR600 crore or within INR500 to INR620 kind of crores. So that let’s assume INR600 crores INR620 crores on depreciation. Interest, I’m not sure what’s going to be the interest rates in our level current number of around INR250 crores to INR70 odd crores, then we will have around roughly INR850 crores going out.
So I would assume, I think INR1,800 crores, we will be somewhere between INR900 crore INR2,000 crores — sorry, at a PBT level. And at INR2,200 crores will be somewhere between close to INR1,200, as well.
Jay Bharat Trivedi
Okay. Thanks. Those were my questions. Thank you so much and all the best, sir. Thank you. Thank you.
Operator
Thank you. Next question is from the line of Meet Vora from Emkay Global. Please proceed.
Meet Vora
Yeah. Thanks for taking my question. Just on this MMA side, so while we are seeing that in US market, it would add extra cost on the consumer and there could be some impact because of absorbing this cost at end. My understanding was that this is imported by blenders for e-exports and thus tariff will not be applicable. So is MMA a part of exemplist or is it not?
Chetan Gandhi
No, MMA is not part of exemplist.
Meet Vora
And is it used for export re-exports or tariff will be applicable on this?
Suyog Kotecha
No, our current understanding is tariff will be applicable on this.
Meet Vora
Okay. And secondly, as regards MPDA, we have seen — have we seen any benefit coming in Q4 because of maybe pre-buying or we’ll see that largely in Q1? And also say in terms of FY ’26, will Q1, we will see higher volumes and maybe say once tariffs taper off. So will we see rollback in Q2 because we have significant capacities compared to the utilization right now. So I was just trying to gauge the benefit of this NPDA product?
Suyog Kotecha
No, sir. I think the tariff announcements only came in April 1st. So in that context, we saw upside or we’re seeing upside as we speak from this quarter standpoint and how does it stabilize in the mid to long-term will depend on sort of how the tariff situation finally settles down. But yes, from a Q1 point-of-view on this specific molecule, we do see some upside.
Meet Vora
Understood. Thank you. That’s all from my side.
Operator
Thank you. Ladies and gentlemen, we will take this as a last question for the day. I would now like to hand the conference over to the management for the closing comments.
Suyog Kotecha
Thank you. So thank you everyone for taking our time late evening. As we — as we mentioned earlier, I think despite a challenging year, we ended the year, I would say on a positive note with a year-on-year growth both on revenue as well as on EBITDA. As we get into FY ’26, despite volatile macros, we remain quite focused on driving all the cost-improvement initiatives, remain very agile in our business operations to ensure that we take opportunities wherever available given the geopolitical uncertainty. And in that context, remain committed to deliver on our three-year guidance. Thank you, everyone, and have a good night.
Operator
Thank you. Thank you, sir. On behalf of RT Industries, that concludes this conference. Thank you all for joining us and you may now disconnect your lines