AETHER INDUSTRIES LTD (NSE: AETHER) Q2 2025 Earnings Call dated Oct. 18, 2024
Corporate Participants:
Shubhangi Desai — Executive Investor Relations
Rohan Desai — Promoter and Whole-Time Director
Faiz Nagariya — Chief Financial Officer
Aman Desai — Promoter and Whole-Time Director
Analysts:
Nilesh Ghuge — Analyst
Kushan Mundada — Analyst
Ankur Periwal — Analyst
Krishan Parwani — Analyst
Atishray Malhan — Analyst
Rohit Ohri — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Aether Industries Post Results Call hosted by HDFC Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Nilesh Ghuge from HDFC Securities. Thank you. And over to you, Mr. Nilesh Ghuge.
Nilesh Ghuge — Analyst
Yeah. Thank you. Thank you, Renju. Good afternoon all.
On behalf of HDFC Securities, I welcome everyone to this Aether Industries Conference Call to discuss the result for the quarter and half year ended September 2024.
From Aether industries, we have with us today, Dr. Aman Desai, Promoter and Whole-Time Director; Mr. Rohan Desai, Promoter and Whole-Time Director; Mr. Faiz Nagaria, Chief Financial Officer; Mr. Kushal Doshi, Lead Investor Relations; and Ms. Shubhangi Desai, Executive IR.
Without further ado, I will now hand over the floor to Ms. Shubhangi Desai to begin with the earning call for Q2 FY ’25.
Over to you, Shubhangi.
Shubhangi Desai — Executive Investor Relations
Thank you, Nilesh. A warm welcome to everyone.
Today, on October 18, 2024, our Board has approved the financial results for the second quarter and half year ended on the fiscal year 2025, and the same has been filed with the exchanges, as well as updated over our website.
Please note that this conference call is being recorded, and the transcript of the same will be made available on the website of Aether Industries Limited and exchanges. Please also note that the audio of the conference call is the copyright material of Aether Industries Limited and cannot be copied, rebroadcasted or attributed in press or media without specific and written consent of the company.
Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are predictions, projections, or other estimates about future events. These estimates reflects management’s current expectations on future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Aether Industries Limited or its officials do not undertake any obligation to publicly update any forward-looking statements whether as a result of future events or otherwise.
Now, Mr. Rohan Desai will begin by sharing Aether’s business outlook. Then Mr. Faiz Nagariya will cover the financial highlights for the period under review, and Dr. Aman Desai will share the ongoing expansions and the strategy of the company going forward.
Now, I shall hand over the call to Mr. Rohan Desai for his opening remarks. Over to you, sir.
Rohan Desai — Promoter and Whole-Time Director
Good evening. I hope everyone is doing well, and I’m delighted to connect with you all to share our company’s performance during the second quarter of financial year 2025.
During this quarter under review, total volume has increased, but the prices remained low due to China’s dumping. While we feel prices have bottomed out, the current change in the trend is only likely to start in the fourth quarter of financial year 2025. The demand for our products remains strong, and we have added 12 new clients during this quarter. The accident affected Site 2 has been redesigned and is planned to be fully operational by mid-November 2024 in a highly compliant and safe manner as we are awaiting regulatory permissions to restart at 100% capacities. We expect to commission Site 3+ and 3++ in early quarter one of financial year ’25- ’26.
Our greenfield capex expansion is on track on Site 5, which is located in Panoli, with Phase 1 being expected to be completed in quarter three of financial year 2025-’26. Due to a prior delay in finalizing the contract and subsequent long lead times in procurement of raw materials for Baker Hughes contract, Site 4 is likely to witness an increase in production beginning from quarter three of this financial year. We have commissioned 10 megawatts of solar power plant out of a total of — order of 15 megawatts, which was given earlier. The remaining 5 megawatts power plant will be commissioned by the end of October 2024. This is a significant investment towards our sustainability goal and will also help us save money on electricity overheads, which will enhance the company’s operational profits.
With respect to Aether’s business model, we have seen 57% of contribution coming from large-scale manufacturing business model, 27% coming from contract/exclusive manufacturing business model and 14% coming from contract research and manufacturing services business model during the quarter two. We have seen volume growth in all the three business models.
Contract/exclusive manufacturing is expected to rise significantly beginning from quarter three and quarter four of this financial year when the commercial orders from the SSA inks with Baker Hughes will begin to be shipped. Our exports and our domestic revenues stand at 50% of our total revenue each in quarter two of financial year 2025.
Last week, we showcased ourselves in CPHI in Milan, which gave us great insights into the prospects of the current business dynamics landscapes and to position our capabilities globally.
With this, I would like to conclude speaking and wish you all a very Happy Diwali in advance. I would now request our CFO, Faiz Nagariya, to touch upon the financial highlights for the period under review.
Over to you, Faiz.
Faiz Nagariya — Chief Financial Officer
Thank you, Rohan, and good evening everybody.
I’m glad to present the financial results of Aether Industries Limited for Q2 and half year ended for financial year ’25. The total consolidated revenue of the company stood at INR2,098 million at in the quarter two of financial year ’25 as against INR1,920 million in quarter one of financial year ’25, which is an increase of 9% quarter-on-quarter. This has resulted in EBITDA of INR613 million in Q2 of financial year ’25 as against INR521 million in quarter two of financial year — quarter one of financial year ’25, an increase of 18% in the comparing periods.
EBITDA margin stood at 29% in Q2 as against 27% in Q1 of financial year ’25. The PAT has amounted to INR348 million in Q2 of ’25 as against INR299 million of quarter one of financial year ’25 and increased by 16%. The PAT margin stood at 17% in Q2 of financial year ’25 as against 16% in Q1 of financial year ’25. The standalone PAT has been INR381 million in Q2 as against INR303 million in Q1 of financial year ’25, resulting in healthy PAT margin of 18% against 16% in the comparing periods.
The consolidated revenue in the half year of H1 of FY ’25 increased by 18% to INR4,017 million from INR3,417 million in first half of financial year ’24, enabling an EBITDA margin of INR1,134 million in H1 FY ’25 against INR1,071 million in H1 FY ’24. And PAT being INR647 million in half year financial year ’25 as against INR665 million in half year ’24. The main reason in decline in the PAT margins on the consolidated basis on half year is the result of the operations to still begin in Aether’s facility, whereas the expenditure of common measures like salaries, utilities, etc., coming up. We expect this to be turned around well by the end of financial year ’25.
During the quarter, we had submitted the stock-loss claim resulting from the fire accident, which had taken place on 29th of November 2024 to the insurance surveyor and the same will be processed and claimed settled by the insurance company in Q3 of financial year ’25. The revamping of the affected site is progressing as per the plan, with certain delays from our regulators. Still, we anticipate 100% operations at the fire affected site within a month or so.
The remaining claim for the fixed assets for the loss will be put up to the insurance company in the month of November ’25, along with the loss of profit claim. And we are confident to get the sum settled by the insurance company by or before the end of this financial year ’25. We have been able to reduce the inventory cycle to 178 days as on the 30 September 2024 as against 210 days as on March 31, 2024. The debtor cycle has also been reduced to 136 days on September 30, 2024 as against 142 days as on March 31, 2024, encompassing the payment flows from the customers. With the commercialization of SSA with Baker Hughes, we anticipate to have better debtors and inventory cycles in future.
Now, I would request Dr. Aman Desai to share updates on Aether’s ongoing expansion plans and strategies going forward.
Aman Desai — Promoter and Whole-Time Director
Thank you, Faiz, for the financial highlights. Good evening, everybody.
I’m quite very pleased as always to connect with all of you again. To begin my section, we’ve been working diligently in augmenting our capabilities with our ongoing capex across multiple sites, integrated with the incremental additions and chemical reaction capabilities in our core competencies, where we begin all the way from R&D through pilot plant, all the way to commercial scale. And this is aiding us significantly in enabling and developing newer technology, which we are translating into our CRAMS business model.
We continue to witness a significant influx of business inquiries in the CRAMS business model against the backdrop of the various global scenarios. This business model of CRAMS has indeed grown quarter-on-quarter. This is on the backdrop of our expanded state-of-the-art R&D infrastructure, what we think are cutting-edge technology and chemistry core competencies. With our efforts to broaden our range of end-use industry applications, we have again successfully proved this CRAMS business model by entering into and publicly announcing our contract/exclusive manufacturing contract with the SEQENS Group of Europe. It’s a take-or-pay contract. And under the take-or-pay contract, Aether will produce a series of natural bio-based products exclusively for the SEQENS Group.
The innovative manufacturing process, which involves continuous reaction technology, which is one of our core competencies, was collaboratively developed at Aether by Aether and the SEQENS Group over the last three years in the CRAMS business model, and this is now translating into the contract/exclusive manufacturing business model under the current executed contract.
Sustainability and renewables continues to be an important emerging area for us. Now, evidenced by numerous publicly announced collaborations with Saudi Aramco Technology Company, Novoloop in the U.S., a major lithium ion battery producer, and now the current contract with SEQENS Group. We are further working on numerous other projects in this overall platform, and we anticipate several positive developments in the near future in this overall platform.
Near future should also see significant projects being translated into the contract/exclusive manufacturing business model from the CRAMS business model. Specifically, a significant project for our Site 3++, as well as multiple projects in our Baker Hughes partnership. Our R&D expenses for the quarter one of the fiscal year ’25, which is the current quarter past, stood at INR143 million, i.e., 7.5% of our total revenues was R&D spend. Our in-house pilot plant has enabled us in enhancing chemical development and scale up of our in-house molecules, as well as further expanding CRAMS portfolio.
We have been working relentlessly to leverage the learnings from the upheaval that we faced because of the fire accident in the past year, with continuous sustainable improvements and enhancements being made across the board to implement stringent safety measures, which are also progressing and have been launched by numerous full-scale HSE audits, led by various regulatory bodies as well as our innovator customers across the globe.
Just in the past quarter, we have faced nine customer audits, including four full-scale HSE — multi-day HSE audits by four of our multinational global leading innovator customers. And we have successfully passed all these audits and in the process, we have also reinvigorated our collaborations with these various innovators. So all in all, I do believe we are proceeding in a significantly positive direction.
And with that, thank you, everybody. Wish everybody a very Happy Diwali and a prosperous New Year, and a safe and satisfying vacation wherever you all are. Looking forward to your questions. And Kushal, back to you.
Operator
Thank you. Shall we begin the Q&A?
Shubhangi Desai — Executive Investor Relations
Yeah. Sure.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Kushan Mundada [Phonetic] with NJ Wealth. Please go ahead. Mr. Mundada, please go ahead with your question. Mr. Mundada, if you have muted your phone, please unmute yourself and please go ahead with your question.
Kushan Mundada
Hello? Am I audible? Hello?
Operator
Yes. Please go ahead.
Kushan Mundada
Hello? Am I audible? Okay. Good evening, everybody. I have a couple of questions. Firstly, regarding the capacity utilization at our sites, what was the capacity utilization for second quarter at Site 2 and manufacturing Site 2 as well as the Site 3?
Faiz Nagariya
So the capacity utilization at Site 2 was around 55%, and at Site 2 it was — at Site 3, it was around 62%.
Kushan Mundada
Okay. So, we are improving gradually. And what is the target for the end of the year?
Faiz Nagariya
So, our target for the year end is around — we should be 100% on with the Site 2 also. And so we should reach again the 70% mark. And for the Site 3 also, we would expect to reach around 70%, 75%. It is the maximum we try to go ahead and then we keep the other capacities free for any kind of a downtime or any contingencies.
Kushan Mundada
Okay. And on the realization spend, our product portfolio saw some growth at the [Speech Overlap].
Faiz Nagariya
Your voice is not clear. Can you speak once again? Yeah.
Kushan Mundada
Okay. On the realization front, do our product portfolio saw some growth at Site 3, the newly launched chemicals, [Phonetic] foreign chemicals?
Rohan Desai
The average realization stand is the same as quarter one.
Kushan Mundada
Okay. So are we seeing any improvement in the realization or increased Chinese pressure would further cause it down?
Rohan Desai
We expect the realizations to improve from quarter one of this financial year — quarter four, sorry. Quarter four of this financial year. Calendar one — quarter one of calendar year.
Kushan Mundada
Okay. And since the Baker Hughes contract has not yet started contributing to revenue, so our projection regarding Baker Hughes’ contract of INR200 crores top line this year and INR400 crores next year, is it still intact?
Rohan Desai
That would be impacted for this current year. But for the next year, it is standing still the same.
Kushan Mundada
Okay. And like, I have a question regarding the capacity. Around — we have around 7,000 metric tonnes per annum capacity at Site 4 and our contract to manufacture the chemicals to vehicle use is around 17,000 metric tonnes. So are we going to expand that — from where we are going to supply the additional capacity?
Rohan Desai
The capacities of Baker Hughes will be utilized from Site 4, basically. And Site 4, we already have the necessary approvals, which are in place and it is available in the public domain.
Kushan Mundada
Okay. Thank you. And wishing you a Happy Diwali.
Rohan Desai
Thank you. Happy Diwali to you too.
Operator
Thank you. Next question comes from the line of Ankur Periwal with Axis Capital. Please go ahead.
Ankur Periwal
Yeah. Hi. Thanks for the opportunity, and sorry for the background noise. First question. In your opening remarks, you did allude towards the new customer addition, the double-digit addition that we had done. Just your thoughts on which — are these customers specific to some segment or end applications and which geographies are we seeing good traction from?
Rohan Desai
They are broadly in pharma, agro divisions majorly and we have two customers in coatings, which we are already selling that product on commercial level. Also, we have added two customers in contract research and manufacturing services business model and majorly seven customers are from India and the remaining are from outside.
Ankur Periwal
Okay. Great. And you did mention two of them to whom we are selling the existing products. Will it be fair to say that all of them we will be selling our existing products to them? Or there are some new products as well, which is getting sold to these new clients?
Rohan Desai
No, no. Existing products only.
Ankur Periwal
Okay. Secondly, on the new productions and the new — sorry, the new products and your discussion with clients, any feedback you can share across maybe even agro or pharma customers. How is the demand outlook there? We have seen some deferment in demand earlier, but any any updates there will be helpful. Thanks.
Rohan Desai
Yeah. In the earlier quarters, we have suggested that the demands are back. The pricing is still a challenge as the pricing of the products are derived by China and their competition and dumping of China, which is affecting the price levels for us. However, we are seeing demands on the new molecules are coming back to its normal — normality and also new products are being discussed with a lot of customers and new opportunities are also being discussed with lot of customers. So except for the price, everything seems to be good at the moment.
Ankur Periwal
Sure. Just two-follow ups there if I may. One from a volumetric growth perspective, what is the thought process both from existing customers as well as from the new one? And secondly, you mentioned that Q1 CY ’25 onwards, we should see some pricing uptick. What gives you the confidence there?
Rohan Desai
It would be a New Year for Chinese. We hope that in the new financial year that is based on the calendar year under which they operate, we can assume that they will change their stance and start increasing the price. That is what we are assuming. And during our visits and in the exhibitions and meeting with the Chinese suppliers who are supplying to us, we understood that they are all in tremendous pressure. And so we hope and we are assuming that the prices, which have bottomed out will start increasing from quarter one of the calendar year — next calendar year.
Ankur Periwal
Sure. Thanks. Thanks a lot. That’s helpful. Appreciate it. Thank you.
Rohan Desai
Thank you.
Operator
Thank you. Next question comes from the line of Krishan Parwani with JM Financial. Please go ahead.
Krishan Parwani
Yeah. Hi, sir. Congratulations on a great set of numbers. Just couple of them from my side. First is, we can see there has been a sharp improvement in your agrochem intermediate sales. So by when, do you think or when do you expect uptick in other segment sales?
Rohan Desai
We are seeing a good uptick in pharma segment also. Oil and gas is going to increase. It is just matter of time. At this moment, we are not seeing any challenges on oil and gas. High-performance photography has been pretty stable. The textile divisions have shown great increase, which will also increase in the future, but not immediately. And on the coating side also, we expect certain percentage increase in the next two quarters. That is how we are seeing this business in the quarter three and quarter four.
Krishan Parwani
Understood. And when you mentioned that you are expecting price improvement from 4Q ’25. So, were you referring more to, let’s say, pharma intermediates? Because I think pharma intermediates sales have been like flattish quarter-to-quarter. So, were you referring more to that in your commentary?
Rohan Desai
Yes. So, we are referring to overall prices. Overall prices from commodities has to change — to specialty has to change, basically. So, you should see a price correction in various pockets from quarter one of the next calendar year. That is what we are assuming. And as for our understanding and discussion, that could potentially happen.
Krishan Parwani
Okay. And a follow-up to that. So with improvement in pricing, would we see further improvement in our EBITDA margins, which has jumped from 24% to 27% in this quarter? So, would we see this kind of trend continue going forward?
Rohan Desai
See, if there’s a price correction, it will definitely increase the margins for us. But also remember that the raw material prices are also dependent upon China. So if the prices of our products increase, there is going to be a little bit increase in the raw material prices also. We see the traction and we are on the target to reach our original margins of around 29% EBITDA margins.
Krishan Parwani
Yes, yes. I was coming to that only. Yes, yes. Got it. Got it. That’s right. And just this last one from my side, sir, if I may. From which site will this SEQENS contract be served?
Rohan Desai
Aman?
Aman Desai
Yeah. So it will be Site 3++.
Krishan Parwani
Noted. And just last bit on that. So, I’m not sure whether we have given any revenue potential from this. And also are there any more products under work with SEQENS, given this is — I think in your opening remarks also mentioned that looking at more sustainable products? So what’s your view there?
Aman Desai
Yes. So, I think we are under strict confidentiality terms, and so giving a revenue outlook will be difficult in terms of those confidentiality agreements that we have. But we are working on other products and also this is a series of launch products for them. And so the 100 metric tonne contract that we have currently is launch and market development quantities and kind of a demo plant. And so if 100 tonnes is the launch quantity, then you can imagine that the ultimate commercialization mature volumes will be significantly higher and that we are currently discussing with them as this project moves forward.
Krishan Parwani
Perfect. perfect. That’s all from my side. Thank you for answering my question. All the best for coming quarters and wish you a very Happy Diwali.
Aman Desai
Thank you. Thank you.
Rohan Desai
Thank you. Happy Diwali to you.
Operator
Thank you. [Operator Instructions] Next question comes from the line of Nilesh Ghuge with HDFC Securities. Please go ahead.
Nilesh Ghuge
Yeah. Hi. Congratulation for good set of number despite this challenging times for the chemical industry particularly. So congratulations for Aether Industries’ team. My question — first question leads to Faiz, particularly on the working capital. So, how is the current situation as far as the working capital inventory is concerned compared to FY ’24 end?
Faiz Nagariya
So in the FY ’24, we — in the financial year ’24, we had a fire incident and then we restarted the facility in the month of January, February. Most of the products were in the production and the inventory had increased tremendously. And it was around 210 days inventory, which we have been able to bring it down to 178 days as on the 30 September, so a good decrease. And we are continuously working on that. And we are — because of most of the raw materials are now available in India, so we are taking the materials as and when required and for the production which is — for the production which is required.
So we are — we will be still working on that. And our target is to bring it down to 160 days by end of this year or more than that. And the debtor cycle also, which was around 142 days, has come down to 136 days odd. And as I mentioned in my commentary also with the Baker Hughes and other contract manufacturing project start with other customers, this cycle also will be coming down. And our target is to reach around 130 days by end of this year and then further bring it down to 115 days, 120 days in the next year. So working capital cycle run, also our cash flow from operations is positive just because of the good working capital cycle management, which we have done in the six months.
Nilesh Ghuge
Okay. Okay. Okay. And the second question is to Aman. See, Aman, can you just elaborate on the number of molecules and the type of molecules that we are planning to come out from our Panoli facility?
Aman Desai
Yeah. That’s a good question. So, we have — currently, we’re planning for 16 production blocks in Panoli, and we have line of sight and visibility for about six or seven of these production blocks already in terms of the in-house molecules that we are developing in the pipeline, as well as the exclusive/contract manufacturing opportunities that we have in the CRAMS pipeline. And so we already have visibility of about 35% of the total production capacity on the site size, which is I think a really good place to be considering where we are in terms of timeline. The products will be a mix of in-house as well as external manufacturing. We are currently into several advanced talks with several of our customers, especially in the renewables and sustainability segment and the oil and gas segment for contract/exclusive manufacturing partnerships in Site 5.
And so we have those projects that are going to go in there in these industry applications. And then we have a few pharmaceutical advanced intermediates that we are developing in our large-scale manufacturing business model, currently in advanced stages. And one or two — one, I believe, agrochemical advanced intermediate in very advanced phases at — finishing up the pilot plant phase validations right now, again, in our in-house large-scale manufacturing business model. So it’s a mix of both models. And in the large-scale manufacturing models, it will be heavy on the pharma and ag sector. And in the exclusive/contract manufacturing business model as it stands today, it will be heavy towards the renewables and sustainability segment, as well as the oil and gas segment.
Nilesh Ghuge
Okay. Okay. And just — you touched upon this CRAMS segment, if I look at the numbers also, the CRAMS segment is continuously doing better and better with every quarter. So, what kind of revenue we envisage, let’s say, FY ’25-’26 from our CRAMS business. Currently, we are doing run rate of more than INR25 crores per quarter.
Aman Desai
Yeah. So, let me not give you numbers on that, but let me give you an idea of what we are doing for that. We expanded our R&D significantly last year or two years ago. We are further expanding by additional two times in the same site in an adjoining plot, our R&D center. This will happen by next year 2025. We have what we’ve been calling the world’s largest pilot plant. It’s certainly one of the world’s largest pilot plant and I have been calling it the world’s largest pilot plant. And both the R&D infrastructure and the pilot plant are significant, extensive infrastructure and all of this is focused towards the CRAMS business model.
And so our CRAMS business model has become the growth engine of the company. R&D is the growth engine of the company, is the foundation upon which the company stands on. And so we are very upbeat and positive on the CRAMS business model going forward and we are continuously adding new customers. And these customers are the innovators, and they are across the industry spectrum. And so we are not dependent on any industry spectrum. They are really across the industry spectrum. And our partnerships are in the pipeline of these customers. And we are working with the R&D directors and the technology directors and the CTOs of these companies, of these innovators. And so the vision of the CRAMS business model remains upbeat, even more upbeat than ever, which, if it is possible, because I’ve always been very upbeat on this business model, but I’m even more upbeat than ever on this business model. And we should be seeing and we should be having really good fun with the numbers on business model in the years to come.
Nilesh Ghuge
Okay. Okay. Thanks. Thanks, Aman, and wish you all a very Happy Diwali. Thanks. Thanks for answering all questions.
Aman Desai
Very well. Thank you for questions.
Operator
Thank you. Next question comes from the line of Atishray Malhan with Fortress Group. Please go ahead.
Atishray Malhan
Yeah. Hi. Good evening, team, and thanks for the opportunity. I have a couple of questions. But first, a clarification. So in the Investor Presentation and the results disclosure you provided, the stated revenue for large-scale manufacturing and contract manufacturing is about INR75 crores and INR64 crores, respectively. But in the corresponding quarter, the corresponding disclosures you had provided last year for Q2 and FY ’24, the stated revenue seem to be INR112 crores and INR27 crores. So, has there been some sort of reclassification for some products from large scale to contract manufacturing?
Faiz Nagariya
Yes, yes. There was a reclassification in the last year quarter. That’s why there was a change.
Atishray Malhan
Okay. Okay. Can you maybe provide some names or some contracts, something of the sort?
Faiz Nagariya
Pardon?
Atishray Malhan
Will you be able to provide the names of the chemicals or some contracts that have been shifted from large scale to contract manufacturing?
Rohan Desai
Unfortunately, no. For confidential reasons, we cannot do that.
Atishray Malhan
Okay. Fair enough. Thanks. So, I didn’t hear you too well earlier. So, I need a clarification regarding the Baker Hughes contract. So, again, please correct me if I’m wrong. So last quarter, you had provided a guidance of about INR200 crores to INR250 crores from the contract for this fiscal year and about INR350 crores for next year. And now, because of some of the delays that you had spoken about earlier, the guidance for next year seems to be intact. But the revenue guidance for this year will be a bit less than INR200 crores to INR250 crores, right?
Rohan Desai
Yes.
Atishray Malhan
Okay. So — okay. Fair enough. And just another question. I think last quarter, you had mentioned that there were some delays in the Otsuka contract. Has that been sort of figured out? And is that commercialized from this quarter?
Rohan Desai
Yes. It’s already back on track, and we have already received the orders.
Atishray Malhan
Okay. So those numbers are reflecting in this INR56 crores in the contract manufacturing for this quarter?
Rohan Desai
Yeah. By 2026.
Atishray Malhan
Okay. Okay. Fair enough. Okay. Okay. Thank you so much. That’s all from my side, and wishing the team a Happy Diwali.
Rohan Desai
Happy Diwali to you too.
Operator
Thank you. Next question comes from the line of Rohit Ohri with Progressive Shares. Please go ahead.
Rohit Ohri
Hi, Aman. Congrats on adding one more feather to the hat that is the SEQENS Group. And every nine months or so, the team at Aether keeps surprising us with something or the other. So, my question is that if you can take us through what exactly are these natural bio-based products and where are the applications? And what is the market size that we intend to cater to?
Aman Desai
Yeah. Thank you. Thank you for the kind wishes. If it is up to me, it will be much, much more frequent than nine months. So, I hope we will be making it even more briefer than that. As you can imagine, it takes a lot of efforts and coordination to be able to get approval for name release, especially for these innovators who are very, very finicky with how their publicity is seen worldwide. And so I think the fact that we’re able to get a few of these, I think, speaks to the kind of partnerships that we have. But hopefully, it will be much more in the future and we are continuously working towards that.
I’m afraid I’m not able to give a lot of information because, as you can imagine, these are R&D pipeline projects rolling off into commercialization for these innovators. And we have been working with them on developing the process for the last three years now. And they have been — before that, they were in discovery for a couple of years at least. And so this is how things have been rolling off now for the last five years, six years from the pipeline into commercialization. And as you can imagine, these sort of companies are very, very secretive on what these products are, what their applications are and what the future looks like.
But these initial bio-based products, continuous reaction technology, very innovative technology of making these materials which previously, as you can imagine, have been obtained from raw materials, which were based in crude oil. And so they are end-industry applications. We are now switching out the products, which were previously available from crude oil to completely bio-based raw materials and product materials towards the sustainability of these end applications. And as I mentioned before on an answer to a previous question, these are market development quantities for this customer and launch quantities. And so if 100 tonne is a launch quantity, then the ultimate commercialization will be much bigger, which we do hope to be a partner for with the SEQENS Group. And so, hopefully, much more to come in the years to come on this as well.
Rohit Ohri
Aman, is it possible to share from which of these segments that you’ll be working because SEQENS generally works on pharma, personal care and some specialty custom-made products. So if you can just share some more details whether — which is the domain that you intend to work on with them?
Aman Desai
It’s not the pharma. Let me just say that.
Rohit Ohri
Okay. Okay. That makes a lot of sense. Will you be interested in moving more towards certain products, which are related to PEKK or certain resins or fluoropolymers or something like that?
Aman Desai
I didn’t get the first one. I got the fluoropolymers, and then I didn’t get the other two.
Rohit Ohri
Polyetherketoneketone, PEEK.
Aman Desai
Okay. Yeah. So in the general field of polymerization, we are entering into significantly. And so, for example, the polyols, converge polyols that we make with the Saudi Aramco Technologies Company and the full commercialization is a polyol example. We are — for example, the Novoloop is the depolymerization of a PE polymer back into monomers and then circular economy and upcycle towards other polyols. A lot of the Baker Hughes products are polymers, in fact, using oil field services. And we are working on potential contract manufacturing of hydrocarbon resins with other partners as well. And so we are in the general field of polymers. But I don’t think we are the ones that you are talking about.
Rohit Ohri
Would you be interested in working, as you say, that going forward, there are many things more in the offering from this partnership that’s come from SEQENS. Would you be interested in working with Arkema also?
Aman Desai
Arkema?
Rohit Ohri
A-R-K-E-M-A.
Aman Desai
No, we haven’t — we don’t have any business with them currently, but for sure, we’d be interested. Yes.
Rohit Ohri
Okay. Okay. Sir, my next question is for Rohan, Faiz. Sir, we used to — there was a time when the molecules which were sold by Aether were at par or they were much, much better in terms of pricing with the Chinese counterparts. And post that and we see that since last three or four quarters, there’s been immense pressure. Sir, your thoughts on where exactly and what is exactly that is going wrong? Because there was a time when we were in a position to sell certain products or molecules, which were far better than the Chinese prices?
Rohan Desai
Yes. So even today, we are holding majority market shares on all the products in spite of the fire accident, which has happened nine months ago, or, I mean, 11 months ago. The raw material prices have also corrected quite a bit. And there’s a pressure in the APIs and the AIs, which is pharmaceutical end products and agro end products. And hence, the prices had to be in line with the Chinese competition, and we are still competitive or at par with the Chinese prices. And this is clearly reflected in our margins also in terms of the percentage margins where we are producing more. We are still able to retain the same percentage margins, which shows that we are able to perform better. And again, if you see, we do not have a better business edge as compared to China in terms of the currency devaluation, in terms of the export benefits and so on and so forth. So, I consider that we are doing better in these circumstances also.
Rohit Ohri
Faiz, is it possible or is it fair to assume that going forward that we’ll try to inch more towards the traditional margin levels, which we used to have in the past to the numbers of like a 28% or 30% EBITDA margin kind of level for the second half of the year?
Faiz Nagariya
Yes. That’s the target.
Rohit Ohri
Okay. Okay. Sir, thank you for answering my questions. Thanks a lot.
Rohan Desai
Thank you very much.
Operator
Thank you. As there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Shubhangi Desai
Thank you, everyone, for participating in the call. We hope that we have addressed majority of your questions. If you still have any further questions, then please feel free to reach out to us. Stay safe, and have a great day ahead. Thank you.
Operator
[Operator Closing Remarks]