AETHER INDUSTRIES LTD (NSE: AETHER) Q4 2025 Earnings Call dated May. 03, 2025
Corporate Participants:
Kushal Doshi — Lead Investment Relations
Rohan Desai — Whole Time Director
Faiz Nagariya — Chief Financial Officer
Aman Desai — Whole Time Director
Analysts:
Nilesh Ghuge — Analyst
Akshay Kaila — Analyst
Abhijit Akella — Analyst
Chaitanya Kamdar — Analyst
Unidentified Participant
Krishan Parwani — Analyst
Rohit Ohri — Analyst
Presentation:
Operator
Good day and ladies and gentlemen, good day and welcome to the Q4 FY ’25 Earnings Conference Call of Aether Industries hosted by HDFC Securities. 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 and zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Nilesh from HDFC Securities. Thank you, and over to you, sir.
Nilesh Ghuge — Analyst
Yeah, thank you,. Good morning all. On behalf of LDIC Securities, I welcome everyone to this Industries Conference call to discuss the results for the quarter ended March 2025 and financial year 20224 ’25. From the Industries, we have with us today Dr Aman Desai, Promoter and Whole-Time Director; Mr Rohan Desai, Promoter and Whole-Time Director; Mr Pravesh Nagaria, Chief Financial Officer; Mr Kushal, Lead Investment Relations; and Ms Subami Desai, Executive IR. Without further ado, I will now hand over the floor to Mr Kushal to begin with the earnings call for the Q4 FY ’25 and financial year ’25.
Over to you, Kushal.
Kushal Doshi — Lead Investment Relations
Yes. Thank you, Nilesh. Thank you and a warm welcome to everyone. Yesterday, our Board has approved the financial results for the 4th-quarter and the full-year financial year ended 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 the stock 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 the 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 reflect 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. 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 will cover the financial highlights of the period under review and Dr Aman Desai will share the ongoing expansion and strategy of the company going-forward.
I hand over the call to Mr Rohan Desai for his opening remarks.
Rohan Desai — Whole Time Director
Good morning, everyone. It is a pleasure to connect with you all today as we review outstanding performance for the quarter-four of financial year 2025. I hope you are all doing well and I’m excited to share our progress. We have achieved remarkable growth this quarter with overall volumes surging by 21% compared to the previous quarter.
For the full-year of financial year 2025, volumes soared by an impressive 34% compared to the financial year 2024. Pricing for our products have remained stable over the past six months, reflecting our strong market positions. Demand for our offerings continue to be robust and we are thrilled to have welcomed six new clients in-quarter four of financial year 2025, further expanding our reach.
Strategic pirate towards CRAMS, contract research and manufacturing services and CEM contracts less exclusive manufacturing business models is yielding excellent results. In Q4 of financial year 2025, 38% of our revenues came from contracts like exclusive manufacturing, 10% came from CRAMS contract research and manufacturing services and 51% came from large-scale manufacturing. It is particularly exciting to note that GRAMS and CEM now contributes nearly 50% of our revenue. Again, we expect to strengthen as our robust GRAMS pipeline continues to drive opportunities for our CEM business model.
Our goal is to achieve a 70% contribution from and CEM with 30% from large-scale manufacturing and we are well on our way to realizing this vision. Additionally, we have successfully commercialized Site 4 over the past two quarters and production is going on full-fledged manner in Site 4.
Our expansion initiatives are progressing seamlessly. Site 3 plus has been dedicated to a key client under our CM business model with installation of piping and reactors well underway. We anticipate production to begin in the end-of-quarter three of financial year 2026.
This milestone highlights our ability to forge unique high-value contract manufacturing relationships outside of agrochemical and pharmaceutical sectors, an achievement that underscores distinctive position in the industry. Similarly, Sci-fi in Panoli is advancing steadily with first two production blocks on-track for commissioning by December 2025.
On the trade front, exposure to the US market remains minial at 7% of the total sale, insulating us from potential tariff impacts, if any. We continue to monitor this development closely.
I will now hand over our phone to our CFO, Nagaria, who will share the financial highlights for this exceptional quarter. Over to you, Fai.
Faiz Nagariya — Chief Financial Officer
Thank you, Ron, and good morning, everyone. I’m glad to present the financial results of Aether Limited for Q4 of financial year ’25 and the financial year ended on 31st March ’25. The total consolidated revenue of the company stood at INR2,453 million in Q4 of financial year ’25 as against INR2,33 million in Q3 of financial year — Q of financial year ’25, resulting in EBITDA of INR819 million in Q4 against Q3 757 million, an increase of 8% in the comparing periods.
The EBITDA margin stood at 33% in Q4 as against 32% in Q3 of financial year ’25. The PAT amounted to INR504 million in Q4 of financial year ’25 as against INR434 million in Q3 of financial year ’25, which is 16% increase year-on-year — quarter-on-quarter. The PET margin stood at 21% in Q4 of financial year ’25 as against 19% in Q3 of financial year ’25. The consolidated revenue of financial year ’25 increased by 38% to INR8,803 million from INR6,374 million in financial year ’24, enabling a very healthy EBITDA of INR2,709 million, which is 31% margin in financial year ’25 as against INR1,577 million, which was 25% in financial year ’24, resulting an increase of 72% year-on-year.
Paid stood at INR1,584 million in financial year ’25 as against INR825 million in financial year ’24, which is an increase of 92% in the comparing periods. Paid margin increased from 13% in financial year ’24 to 18% in financial year ’25. During the quarter, we have also received the stock insurance claim from the insurance company.
The revamping of the affected site is completed. 100% operations at the fire affected site has been started since January ’25 post the approval from the regulatories. The remaining claim for the fixed assets for the loss has been put up through the insurance along with the loss of profit claim and we are confident to get the same settled by insurance coming by or before the end of Q2 of financial year ’26. We have been able to reduce the cycle to 173 days on 31st March ’25 as against 210 days on 31st March ’24.
The debtor cycle has also been reduced to 126 days as on, 31, 2025 as against 142 days as on March 31, 2024, encompassing the payment flow from the customers. With more of contract manufacturing businesses unfolding in near-future, we anticipate to have the better debtors and inventory cycles in future. The return ratios have also improved for us, wherein the ROE has gone up to 7.12% in financial year ’25 as against 4% in financial year ’24 and ROCE has gone up to 8.5% in financial year ’25 as against 4.7% in financial year ’24.
We are continuously using the solar power benefit and we will be expanding that to our other units as they come up and the total benefit of solar power in financial year ’25 has been INR188 million as against INR172 million in financial year ’24, encompassing the sustainability initiative of Industries and we will continue to and continue to add capacities to the solar or wind or hybrid models of renewable energies for our upcoming new sites as well.
Now I would like to request Dr Aman Desai to share updates on ongoing expansion plan moving forward. Amand sir.
Aman Desai — Whole Time Director
Thank you. Thank you, for the financial highlights. Good morning, everybody. I’m very happy to connect with you all again. My thought for this call, perhaps I’ll start by giving an idea of the various five sites that we have Rohan has spoken extensively about how good the quarter has been and the fiscal year has been. And so just to give you an idea of the five sites that we have and what’s happening and how bullish we are. Site one is the R&D and the pilot plant. We have eight research groups, 60 hoods in the site one in the R&D center. We are doing a double expansion of this site 1 R&D center.
The excavation has already begun. This represents our bullishness on the R&D and the CRAMS business model that we have. The CRAMS business model has grown by 24%, which is quite pleasing and this continues to be the heart and the engine of acres new ventures. Our R&D expenses for the fiscal ’25 stood at Indian 681 million, which is approximately 8% of the total revenues was R&D spending.
We already have what we call the largest pilot plant in the world and that also reflects on the bullishness that we have on the business model. The Site 2 and Site 3 were largely LSM with some large-scale manufacturing, which is against Chinese import substitution, which was our original business model, a significant portion of it was also contact manufacturing, exclusive manufacturing, but largely LSM business model that has also stabilized. Both sites are running at full capacity.
We have fully stabilized post the fire accident that happened in November 2023. Both sites are running at full capacity. Chinese pricing have flattened out and they are on the way up. The volumes are back and the pricing is also inching upwards. Site 3+, as Rohan mentioned, is now fully dedicated for content manufacturing, exclusive manufacturing for one particular material science company for one particular product and this particular product is transitioning from the model to the contract manufacturing — exclusive manufacturing business model.
We have been working on this product for the last three to four years now for this particular customer and now we are fully dedicating our Site 3+ to the exclusive manufacturing of this particular product for the material science company. The Site 4, which is for the oilfield services company, a large part of that being towards Baker Hughes is also running quite well, a very healthy order book already in that site and expanding more and increasing more on a monthly basis and that is now fully on-track.
Site 5 is currently progressing very well in the Panoli site, which is a very large production site that we are constructing. We have full-line of sight of about three to four plants in Site 5 and that’s going to be a — the first couple of plants will be the large-scale manufacturing business model, which were the products which were kept on-hold for Site 3+, which will now go into Site 5. And also we are — we have already finalized and are on the verge of finalizing several contracts for the contact manufacturing and exclusive manufacturing of various products in the material science area from European and American customers for Site 5 and more of this will come in the next few months as you see these announcements unfold? I think especially the site 3 plus, site 4 and the various but anyway, I was mentioning that I just gave a highlight of the various five sites.
And so especially Site 3 plus, site 4 and Site 5, all the race contracts that we have either finalized or finalizing right now, as I mentioned, are very firm validation. And I think absolute incontrovertible proof that our CRAMS business model is working in a very robust manner. We are forging relationships with innovators across the globe, across the industry spectrum and these are actually completely non-pharma and largely non-agro.
And by next year or definitely over the next two years, we’ll be firmly, fully diversified with a very broad 25% pharma, 25% agro, 25% and 25% oil and gas into our overall pie of revenues. I think especially over the last few months as the global conditions have intensified and in some cases further exacerbated, the CRAMS and the content manufacturing business models are seeing major inquiries and fast-tracking of some of the CRAMS projects.
We are seeing a sense of urgency from various customers across the globe as they look towards expediting the finalization of contracts with companies, especially in India. And I think we are very well-placed for that considering all the relationships that we have already forged with these various companies. Currently, we have over 50 CRAMS projects that we are working on, out of which 70% are in the R&D are non-pharma and non-agrochemical projects. And that is mostly almost 35 projects in the R&D that are ongoing today, which are non-pharma and non-agro.
Over the last three months, we’ve also had numerous international customers who have come to visited our Site 5, which is the Panoli site, which I talked about already. We have a clear line-of-sight, as I mentioned for the various projects that we would like to start at at Site 5 in the first three to four plants. For the fiscal year ’25, the CRAMS and exclusive manufacturing business model has grown by 55%, which has also helped us to increase the company’s margins as well as reduce the pricing pressure from which the LSM model has been suffering so I’ve always mentioned that this has been a golden age for the Indian chemical industry and especially over the last three to six months, we are seeing that this is especially the case.
We are seeing tremendous potential in all the opportunities that are available to Indian specialty chemical companies who are diversified and have their fundamental thesis well in-place and we are working tirelessly towards converting these opportunities into actual projects which are going to start within Erica. So let me stop there.
Thank you everybody for your time and attention today and happy to answer any questions from the investor community. Again, thank you for all the support., back to you.
Kushal Doshi — Lead Investment Relations
Yeah. Thank you. We shall now request the moderator to open the floor for question-and-answers.
Questions and Answers:
Operator
Thank you. 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 remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Akshay from AK Investment. Please go-ahead.
Akshay Kaila
Hello, am I audible?
Rohan Desai
Yes.
Operator
Yes, you are. Please go-ahead.
Akshay Kaila
Yeah. Yeah, yeah. Thanks for the opportunity. Sir, my first question is how much capacity we will increase by expanding — expanding our capacities in-site three-plus, plus four and five combined compared to the site 2?. Hello.
Rohan Desai
I’ll try and explain you. That’s right. It is very tough to measure the capacities in the specialty chemical fees. Obviously, with the Site 3 plus contract or whenever it happens where you will come to know about that capacities and everything once it is available on the public domain. Slide 4, we have always mentioned that we are — we are putting up a capacity of 16 KGA that is 16,000 tonnes that is for Baker use plant and site 5, we are talking about each production block having capabilities and capacities of manufacturing above 500 tons of product. But as the product mix are — are differentiated and which plant the competitions will happen, we will soon let you know. But at this moment it would be very tough to mention this. I’m sorry I could not answer it in a straight-line but this is a very complicated question which you asked.
Akshay Kaila
Yes, not an issue. Sir, my second question is, can you put some light on our products and our competitive edge on all our products like in oil and gas sectors and in the material science sector. So I am new to this company and so would like to understand what is our market-share and product competitive age.
Aman Desai
Yeah. So, thanks for the question. Again, we are very competitive. We focus on chemistry and technology innovations and across the spectrum of the productions that we do. And so the idea is to be the most competitive source in the world for any product that we take into manufacturing. We incorporate a lot of technological and engineering innovations in all the chemistries that we perform. And so as a marriage of chemistry, technology and engineering always, which brings lot of efficiencies into the systems and drives down the costs.
And so it’s difficult to pin down specifically on any particular product because we are — as I had mentioned, we are quite diversified into pharma, agro, material sciences, oil and gas. We are selling products which are to $3 per kg and we are selling products which are $5,000 per kg and everything in-between. And so to pin down anything, it will be very difficult. But I think suffice it to say that we are very competitive because we bring innovations, which is aligned to our core competencies, which is the fundamental foundation of the company to begin with 13 years ago. Thank you.
Rohan Desai
I can add two more points over here. For the last scale manufacturing, we manufacture products are for the first time in India and we are the only manufacturer of most of the products, which we manufacture on the large-scale manufacturing business model. In terms of the CEM and, what we are doing currently is partnering with the innovators and launching the products for the first — first time in India and now with the few launches which are coming up in Site 3 plus and site 5, we will be launching them for the first time in the world. Would that answer your question?
Akshay Kaila
Yeah, yeah. Yeah, very, very sufficient, sir. And lastly, on the FY ’26 outlook, so how much you are anticipating the growth and the margins in FY ’26.
Kushal Doshi
So Akshay, we don’t give forward guidance on numbers, but suffice to say that the margins will remain pretty much the same.
Aman Desai
Okay. Okay, okay.
Akshay Kaila
Thank you so much, sir.
Aman Desai
Thank you.
Operator
Thank you. The next question is from the line of Abhijit Akela from Kotak Securities. Please go-ahead.
Abhijit Akella
Yeah, good morning and thank you so much for taking my questions. First one is on the quarter-four results. The EBITDA margins even excluding other income seem very strong atmost of 33% and it does seem like there’s been a quarter-on-quarter decline in the OpEx lines, especially maybe other expenses, little bit in employee cost as well. So if you could please just help us understand what’s happened there and do we expect to continue this 33% margin in upcoming quarters as well?.
Faiz Nagariya
Yeah, Vijar, I’ll take this I’ll just take this question. The — you are right that this time the EBITDA margin is more inclined towards the revenue from operations as we have — the QYP funds which we had raised, we have deployed. And so now other income, which was coming from mostly FD interest is reduced. And going-forward, we will be at 30% EBITDA margins for sure. And the expenses which have reduced is there is no reduction actually what has happened is new projects have started.
So various as per the according standards, various capitalizations of expenses of project and process teams is being done. So that is the thing and that will be as a capex thing. Otherwise, there is no change in the expenses. Also, just other expenses have reduced because in my comment also if you — if you heard, I said that solar power plant is giving a good return to us. So that has also helped us reduce the price — electricity cost overall, which is also a good factor which has increased our EBITDA margins.,
Kushal Doshi
Just to add to that, if you see the CRAMS business model and the CEM have now started firing, especially the CAM, if you see for the first-quarter — for the financial year FY ’25, CRAMS has for the first time passed INR100 crores of revenue. This is of course a very-high EBITDA margin business which is for us. And as you realize that R&D is the core for this company. So now you’re seeing the results of the R&D coming in as well as the CEM now taking off with the two new CM contracts, which were mentioned by Rohan and Dr Aman.
Abhijit Akella
Got it. Yeah. Thank you. That’s helpful. Just the other one was just on the working capital. There’s been some improvement year-on-year, but for the year ahead, if you could please share some outlook regarding how you’re seeing things moving now that the revenue mix has started to shift.
Faiz Nagariya
Yes. So we are going — we are trying to incline more towards the contact manufacturing in mode. And in contact manufacturing, there will be definite payment terms and also the inventory flushing will be continuously going on and so there will be no more piling of the inventories because it will be — the context will be very much different defining the quantities which we are doing we know we have to sell to these customers. So of course, we are looking-forward to reducing this more — currently, we are at around 195 days of working capital. We expect it to bring it down to better levels and within a couple of years or three years, we would try to bring it down to 150 days level for sure.
Abhijit Akella
Understood. Thank you so much. And on the revenue growth that we have seen in FY ’25 in LSM and CSM — sorry, CEM, would it be possible to just share broadly, you know which products or which contracts have sort of driven this kind of growth?
Rohan Desai
Yeah. Abhishek, we can connect separately on this basically. We do not want to mention the product names and the companies because they are more of confidential in nature. So we can discuss this offline if required.
Abhijit Akella
Fair enough. Thank you. And the last thing from me is just on the tariff situation. I know our US exposure is only 5% to 6% of total revenues. But you know, I mean, could there be some sort of indirect impact coming in from other geographies because of all this environment and there’s also some concern that Chinese may turn more aggressive outside of the US in case they are blocked from the US market. So how are you seeing the industry environment evolving in that context?
Rohan Desai
So I don’t know about people, but what we are seeing is lot of inbound inquiries and interest which are fast-tracked towards conversion into contracts and commercialization. So in fact, we are seeing a lot of companies moving towards in a very, very fast manner towards getting the things into commercial-stage because they are worried about the tariff structures and what US might do in the next few months and we are not seeing any negative impact for, especially at this moment. And the contribution from the top — of our top-line for the last financial was only 7%. So we are not at all worried on this at the moment.
Abhijit Akella
So most of our products are exempt from the tariffs or are they actually subject to land?
Rohan Desai
No, nothing is going into US. So I mean, I mean except for the 7%, nothing is going into and that 7% is also mostly constituting of with businesses. So that’s more of a service-oriented business, which we are doing.
Abhijit Akella
Okay, great. Thank you so much. I’ll get back-in the queue for any more.
Faiz Nagariya
Thank you.
Rohan Desai
Thank you. Thank you.
Operator
Thank you. The next question is from the line of from Avesta Fund Management LLP. Please go-ahead.
Chaitanya Kamdar
Yeah, hi. Congratulations on the good set of results. I had a question. Basically, we see Aether as a major player in the material science space, which is unlike other players in India to the scale of what you are manufacturing. So can you give us your strategy in — your strategy over the next two to three years as to how Aether is tapping into this segment and what can we expect.
Aman Desai
Yeah, I can take this. Thanks, Japany, for the question. It is a good question. We are focusing consciously on increasing the partnerships and the clients projects and the content manufacturing projects in material sciences as well as the oil and gas. And so that’s a conscious strategy adopted by the company. The focus is quite simple actually. It’s strategic partnerships with innovators in the material sciences and oil and gas space. And for every one that we announced, we are working with four to five others in this space as well.
And so the strategy is — always has been and will continue to be quite simple is strategic partnerships with these innovators where we would like to be their one-stop solution and their go-to partner for all complex chemistry and technology needs. And so if they have pipeline molecules of various launches in the future that involve complex chemistry and complex technology, then we want to be the first ones they connect with.
We look — we are and we look to be the — to be considered as the internal research scale-up and commercial supply of these various innovators, which just happens to be a different company located in India. And so that’s the strategy — it’s always been strategy and that will be a continued strategy and we are focusing on this much more is focus on the core competencies of the company in and technologies and then focus on strategic partnership with innovators, having multiple eggs in the basket with the same partner.
And so we want to be working with the partner for their R&D needs in the consensus model for the scale-up and supply needs in the model and then also be the partner for commercialization as the products are launched, which now we are seeing the proof in the pudding with the Site 3+ and the Site 4 and the Site 5 contracts that have been finalized already. Hopefully, that answered your question,. Happy to expand more.
Chaitanya Kamdar
No, that’s great. You’ve answered that. And just a bit of a follow-up question on a follow-up to the previous question is, how is the site 5 shaping up in terms of Phase-1 and do we have any clarity on the first four plants?
Aman Desai
Yeah. So site 5, as I mentioned in my little ramble earlier is shaping up quite well. We are — the Zone 1, the Phase-1 is four plants and we have more or less 80% clarity on the first four plants that we are going to be installing and operating. And it is healthy. It is actually — we had three products that we were going to launch in the LSM model inside 3+, which has now been dedicated to a content manufacturing customer, as I mentioned earlier. And so those three products are going to be launched first-in the Site 5 in the LFM model and then the next 2.5 plants are going to be dedicated for content manufacturing projects with various customers, the contracts for which have been and are being currently finalized. So from line-of-sight of the first four plants, mostly.
Unidentified Participant
Okay, noted. Thanks a lot. That’s it from me. Thank you.
Aman Desai
Thanks.
Operator
Thank you. The next question is from the line of Krishnan Parwani from JM Financial. Please go-ahead.
Krishan Parwani
Yes, hi, sir. Good morning. Congrats on very strong set of numbers. Couple of questions from my side. First, I think you mentioned that the revenue from Site 3 plus would begin from 4Q FY ’26. So just wanted to check if you have already received the orders for the same or the orders will come in probably over the next couple of quarters.
Rohan Desai
So the contract is being finalized. Once the contract is being finalized, we are on the very end to finalize this contract. And so once it is done, the orders will follow immediately.
Krishan Parwani
Understood, sir. And on from Site 4, was there a large revenue in 4Q FY ’25, just from an understanding point-of-view, given you know we’ve seen a good increase in our top-line in 4Q. So just wanted to check whether the contribution has started from Site 4.
Faiz Nagariya
Yes. So from 4 in Q4, we had approximately around INR25 crores of revenue, which was the validation contribut which was sent and now the commercial purchase orders have received and we are — we are going to do the commercial supplies to them from this quarter onwards. It’s already started in April, sir.
Krishan Parwani
Okay. That’s great, sir. And just last bit. So, just can you highlight revenue trajectory for Site 4 and Site 3 plus in case if you are able to publicly. I think in the past, we had indicated that Site 4 will gradually ramp-up to INR300 crore INR5,300 odd crores. So just wanted to understand the trajectory for both the sites.
Kushal Doshi
So, Krishnan, in terms of site four, our statement remains valid. What we have mentioned in the past, it will gradually ramp-up in FY ’26 and then fully ramp-up in FY ’27. Site 3+, we cannot give you any projections for time-being. We’ll come back to you later during the financial year.
Krishan Parwani
No, sir. And just last bit. I think on the EBITDA margin, you answered to the previous participant that EBITDA margin will go up from here. But just wanted to understand like, let’s say for FY ’26 a 33% EBITDA margin is the right number to go or probably more like an average 30% 31% kind of an EBITDA margin.
Faiz Nagariya
The inflation, it will be in average of around 29% and 30% and from there it will grow gradually. So currently, we are not looking at 33%, this it will gradually grow in a couple of years or so. So 20% and 30% average EBITDA margins is what we are expecting and we are working on.
Krishan Parwani
That’s great, sir. Thank you so much for patiently answering my question. Wish you all the best. Thank you so much.
Operator
Thank you. Ladies and gentlemen, to ask a question, you may press star and one. The next question is from the line of Krishna from NG Invest. Please go-ahead.
Unidentified Participant
Hi, Jen. Congratulations on a good set of the US.
Operator
Sorry to interrupt you, Mr Mundra. Can you speak a bit louder? We cannot hear you, sir.
Unidentified Participant
Hello. Am I audible now?,
Operator
Actually can you speak a bit louder, sir?
Krishan Parwani
Hello, am I audible now?
Operator
Yes, you are. Please go-ahead.
Unidentified Participant
So congratulations on a good set of numbers. So as you mentioned that US sales consist only of 8%, which is to from CRAMS business. So regarding the Baker uses contract, is it going to the US or other geography? So just wanted to like get color on other geographies on that. Okay. And next is on the converged polyols business. So we had started commercialization with HB Fueler. So are there any developments on that part?
Rohan Desai
Yeah. So we have a contract with HB and that contract is being well-executed. In this financial year, we are looking to close two new contracts in the — in the Converge platform, which will take us about 500 tons of manufacturing and sales are as per our estimates for this financial year.
Unidentified Participant
And then next is regarding in the last quarter, you said that we were evaluating for starting LSM or CEM business from the Site 3 plus. So have you done that or have you taken any decision regarding that what we are planning to do?
Rohan Desai
Yes, Site 3 plus will be dedicated to CEM business model.
Unidentified Participant
And in that CEM, if you can provide any like which chemical we are planning to manufacture any chemical pharma or material science.
Rohan Desai
It’s non-pharma, non-agro, that is the max I can say at this moment, once the agreement and the contract is finalized, I will — we will publish it in the public domain and we can discuss this more openly at that point of time.
Unidentified Participant
Okay. And next was regarding the pricing, like you said that we are — we will — from the Chinese — starting the Chinese New Year, we can see an upward trajectory in the pricing. So during the 4th-quarter, did we see only the rise in top-line was only due to volume increase or there was some price increase which we have seen.
Rohan Desai
So price was stable. We have seen only volume growth.
Operator
Okay. Thank you. Thank you. Participants who wishes to ask a question may press star and one. The next question is from the line of Manish from B&K Securities. Please go-ahead.
Unidentified Participant
Sir, congratulations for the good set of numbers. Sir, I’m new to your company. So just understand the last month your strategic, I think a seven, 30 split between CD CM service and large-scale manufacturing. Like what drives this mix and how does it align with your long-term growth strategy? Aman?
Aman Desai
Yes. Thank you, Manish, for the question. Basically, the focus is to — as I said earlier in response to one of the questions is to have strategic partnerships with various innovators across the industry spectrum across the globe and that’s the push towards the increased portfolio of content manufacturing, exclusive manufacturing.
The large-scale manufacturing business model is a business model where we pick our own products, which are generic advanced intermediates for pharma and agri primarily, which are against Chinese import substitution. That was the business model that we started the company with and that is a business model that we still continue to nurture and grow.
But the contact manufacturing — exclusive manufacturing is a business model that is driven by both us and the customer together and that grows much faster. And that’s what you see in the numbers that are being portrayed. And in the future going-forward, this will stay more or less the same.
We’ll try our best to keep the large-scale manufacturing business model at least at 25% or more in the years going-forward. But especially in terms of the global scenario that we are in today, the push towards content manufacturing — exclusive manufacturing and partnering up with companies in India is significant from various companies and innovators across the industry spectrum across the globe. And so we see the increased numbers of the content manufacturing.
Unidentified Participant
Thank you.
Aman Desai
Thank you.
Operator
Thank you. The next question is from the line of Rohit Ori from Progressive Shares PMS. Please go-ahead.
Rohit Ohri
Hi, team. A couple of questions. The first one on Slide 5. If you see that you’ve added — you’ve acquired some more properties taking it from 31 acres to 46. Dr Aman and team, my question is that what gives us that sense of positivity or what are you looking at? Because Dr Aman said that R&D is a bad board and focusing more on the R&D. But what gives us that — since that we have added is approximately 15 more acres of land? Yeah. Thank you, Rohit, for the question. We’ve always been very bullish in terms of our partnerships that we have been forging over the last 13 years now with various customers, primarily in the non-pharma, non-agro sector for the Crime services model. We are very bullish about the growth trajectory of the company going-forward. It is a golden age for the chemical industry. It has always been a golden age for the chemical industry over the last few years and especially since the last few months as the global conditions have further, we are seeing a very sense of urgency for various customers to start finalizing partnerships with especially companies in India.
And so everybody wants to be not in China and the only obvious choice for everybody in the world is India more or less. And so we are seeing this pan-out in the kind of inquiries we are getting, the urgency we are sensing from customers to close contracts and finalize the contracts with us. We are based on R&D and technological and chemistry innovations as the fundamental base of the company. And so the fundamentals of the company are very sound in terms of chemistry and technology and innovation and R&D.
We continue to expand that as well in terms of the infrastructure and the resources and the manpower. We are led techno commercially from the top. And so this — and we are seeing now actual proof in the pudding in the way the contracts have been finalized for Site 3 plus and the Site 4 and some for Site 5 in these exclusive manufacturing, content manufacturing business model, which are actually a result of the efforts the CRAMS business model in research for these various customers over the years.
So we have actually proven this business model that it is quite robust and that leads us to be very bullish and that leads us to continuously expand on all fronts of the R&D pilot plant and production, which is as a result of which you see the additional land being bought next to Site 5 in.
I know it’s slightly too early to kind of gauge the timeline for completion of the additional land because we already have probably 14 or 16 subunits which are coming up in Site 5. But any thoughts on by when do you think that site 5 construction and the entire work will be completed so that you move on to Site 5 +?
Aman Desai
I’ll let or answer in terms of what guidance we are giving to people.
Kushal Doshi
I will take this up and the goal is to complete site 5 in three to four years that’s the internal goal. I mean that’s a thought as the projects are developing. It can accelerate based on the incoming projects and inquiries which are getting commercialized as we speak. Site 5, additional land which we have acquired, which is 15 acres more which makes the total land powerful at 46 acres. What we are projecting is try to keep it isolated for a large customer which would give us space to expand that customer likes of Baker use a similar kind of customer who can or whom we can dedicate the whole parcel of land for a very big manufacturing facility
Rohit Ohri
Phase is it possible to share the cost of acquisition of this property?
Faiz Nagariya
It’s approximately 420 million
Rohit Ohri
Okay with this a quarterly run-rate coming up to somewhere around 23 to 30 to 40 kind of a range, you think be able to sustain this going-forward as well with the inquiries that are coming in the current business or maybe the CDMO business.
Faiz Nagariya
Yes, that’s the target and the internal you know goal for the company to be at around 29%, 30% EBITDA margins and grow from there for sure. And we are seeing this coming up.
Rohit Ohri
And is it possible to chalk out maybe 18% or 20% CAGR growth over the next three, four years or maybe faster than that?
Faiz Nagariya
Yes, we are — we currently we closed at 18% PET margins and we think that we can continue at 18% and grow from there. It’s definitely possible as new contract manufacturing and CREMS business — business customers are coming up and we are getting business with them.
Rohit Ohri
Last question from my side team. The promoter holding is somewhere around 81.7%. But when do you think that you’ll be able to come to this SEBI requirement or rules of 75%? How much time do we have for that?
Kushal Doshi
So the timeline for this, the regulatory requirement is May 31st. We are in discussion with our bankers and we’ll come back to you all shortly once we have decided the right course of action.
Rohit Ohri
Any thoughts whether you’ll be placing to some strategic shareholders or maybe go for OFS or something like that.
Kushal Doshi
There are only certain mechanisms which are allowed by SEBI for allowing us to reach the minimum promoter shareholding. So we’ll be abiding by those requirements. So we’ll come back to you.
Rohit Ohri
Okay,, thank you for answering the question. All the best. Thanks a lot.
Kushal Doshi
Thank you.
Operator
Thank you. The next question is from the line of Nilesh from HDFC Securities. Please go-ahead.
Nilesh Ghuge
Yeah. My question is to Aman. So Aman, we look at Industry as R&D-driven technology-oriented organization. And this year also with the 8% of your revenue spend. If you look at the revenue spend on RLA, it’s about 8% of your revenue. So going ahead in, let’s say, a couple of years down the line, your expansion RLE, you are doubling your capacity. So will that number go up from 8% to somewhere at 10%. Are you looking at that kind of number after this conference?
Aman Desai
Yeah., thanks for the question. As you know, I’m originally a scientist, unfortunately, I’ve become a manager now. And so if it were up to me, I would be spending a lot more money, but I have the likes of and Kushal and Rohan slapping my wrists every now and then. But joke aside, now we anticipate to be investing significantly in R&D, continue to invest. Just for an example, we are placing an order for an NMR, which is an analytical equipment, which is almost a little less than $1 million of single equipment for R&D in the next few months. And so those are the kind of advanced technological, analytical and R&D tools that we’ll be investing in addition to the expansion of the infrastructure and the manpower that is going to be there.
We have started excavation for the new R&D center, which is right adjacent to our existing R&D center, which is going to more than double the capacity of our R&D and the excavation of that has already started and we are going to come above-the-ground before the monsoon, which is like 1.5 months from now. And so that activity has started, it’s going to be a — it’s going to be a grand, very nice globally — a globally advanced R&D center for organic synthesis and organic chemistry.
And so that’s what we’re already building. And so I think at least for the next few years, we will continue to expand and continue to invest in R&D. These numbers will more or less stay the same. Can comment more on the numbers, but the — especially the vision from our side is that the investment into R&D will be a continuous effort and work-in progress.
Faiz Nagariya
Yeah. So Nilesh
Aman Desai
And that is that is what drives the company forward and that is going to be the sustained focus of the company for years and years to come. So, over to you.
Faiz Nagariya
Yeah. Yeah. So Ninesh, we will continue to invest in the R&D as Dr said and we would be minimum around 6% to 6.5% for sure because we are expanding R&D and new products will be developed there, new people will be array. So our thought is that at least 6% to 6.5% of our revenues will be invested in the for next few years for sure.
Nilesh Ghuge
Okay. Thanks for that. Sir, Aman, coming on the R&D, now you are expanding your infrastructure. So before that, can you tell us how you — can you break-up the number of projects or molecule you are working on in two-parts. Firstly, which are — which will be — you are working on your last scale manufacturing and other in the CSM or contract manufacturing. Can you break-up now? And where do you see that number going after expansion? Because as you mentioned that R&D will reflect in your revenue terms over a longer period of time. So we’d like to know the number of molecules you are working on so that we can estimate that number of projects which will be improved after manufacturing also contract.
Aman Desai
Yeah. Thanks,. Just to give a high-level summary, you know, we have eight research groups and these groups hands — we have a total of 120 R&D scientists plus more than 100 engineers.
But in terms of broadly, we have eight research groups. Each research group handles between five to eight projects per research group. And so if you take an average number of say 6.5 multiplied by 8, you are at about 60, 50, 60 projects going on in the R&D at any given time and about 70%, 75% of those projects are towards the CRAMS and the content manufacturing business model and about 25%, 30% are towards the LSM manufacturing business — LSM business model, which is Chinese import substitution largely.
Okay. And so if you count 60 odd number of R&D projects and 70% of that, you are at more than 40 projects in the business model and then the remaining 20 projects are in the LSMSS model, 20 projects, let’s say. And as we expand further, I think we’ll have to try hard and we will because it’s going to be a sustained focus is to keep the LSM model alive and growing and nurture it. But we see a tremendous amount of employees coming in into CRAM’s business model and projects.
And so keeping the CRAMS as we expand more, say, even achieve a expansion in the next two years of R&D, keeping the CRAMS at 70%, 75% is going to be I think, personally straightforward and quite easy just in terms of the relationships we are forging and the inquiries we are seeing and the reputation and foundation that we are standing upon today. But we’ll try hard to make sure that the LSM business model stays at 20%, 25%, 30% at least in terms of the overall number of projects we do in the — in the R&D. Hopefully that gives you a good sense of the numbers.
Nilesh Ghuge
Yes, yes, sir. Just a last bit to Rohan and. See, you mentioned in your comment that contract manufacturing and CSM, which is currently contributing to about 50% and in few years, it will — you are expecting to reach to about 70% plus. So when you think that it will be easier for you to manage working capital in much, much better way because your share of your PSM or contract manufacturing going up compared to current scenario and working capital cycle should reduce drastically with rising share of contract manufacturing CSM. Any thought there?
Faiz Nagariya
Yeah, that’s the total plan and we have been hearing about working capital since various quarters. So we are happy that we are able to bring it down to a good level and we will be further working on it and contract manufacturing CRAMS business model business will definitely help us bring them down more. And our target, as I told to even one of the earlier speakers was to bring it down to 150 days levels in next two to three years.
Nilesh Ghuge
Thanks for answering all my questions recently. Thanks a lot.
Faiz Nagariya
Thank you
Operator
Thank you. The next question is from the line of Abhijit Akela from Kotak Securities. Please go-ahead.
Abhijit Akella
Yeah. Thank you so much for the follow-up. Just to check if you could please help us with the capacity utilization at present across your key manufacturing plants. And by when you expect them to hit full capacity utilization and what sort of revenue potential do you see from each of them? Thank you so much.
Faiz Nagariya
Yes, Abhijit, site one is R&D and paddit plant and we do not measure the capacities because depend upon on the contracts and the R&D which is done. But site 2 is currently operating at around 70% capacities and we expect it — because the site has come up slowly with the regulatory approvals as it was hit by fire. So we expect that it would be working to full capacities of around 80% 22% in the current year in the financial year ’25 ’26. And site 3 is also approximately around 66% capacity utilization and we expect that it should be around 75%, 80% in this current year itself. And revenue trajectory, we would not be able to give any forward-looking statements. So we would that. Site 4, four, yeah, it is — therefore is we have started the validation quantity. So currently we are at around 25% to 30% capital utilization. And this year there will be — it will be a great jump and it will be around 75% utilizations.
Abhijit Akella
Understood. Thank you so much and all the best.
Operator
Thank you. And ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Kushal Doshi
Thank you. Thank you, everyone. We look-forward to seeing you guys again for Q1 FY ’26 financial results. If any further queries, you can reach-out to, myself or Shivangi and we look-forward to meeting them. Thank you.
Operator
Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.