Anupam Rasayan India Ltd (NSE: ANURAS) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Kanav Khanna — Associate Vice President – Investor Relations
Anand Desai — Managing Director
Gopal Agrawal — Chief Executive Officer
Amit Khurana — Chief Financial Officer
Vishal Thakkar — Deputy Chief Financial Officer
Unidentified Speaker
Analysts:
Meet Vora — Analyst
Harsh Shah — Analyst
Ramesh — Analyst
Rohit Nagraj — Analyst
Ashwini Agarwal — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Anupam Rasayan India Limited Q3 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 then zero on your touchstone phone. Please note that this conference is being recorded.
Kanav Khanna — Associate Vice President – Investor Relations
I now hand the conference over to Mr Kanav Kinna from ENY Investor Relations. Thank you, and over to you, sir. Thank you, and good evening, everyone. Welcome to Anupam India Limited Q3 and Nine-Month Earnings Call. Please note that a copy of the disclosure is available on the Investors section of the website as well as on the stock exchange. Anything said on this call, which reflects the outlook towards the future or which could be construed as forward-looking statement must be reviewed in conjunction with the risk that the company faces.
Please note that the audio of the earnings call is the copyright material of and cannot be copied or rebroadcasted, attributed in the press or media without specific or written consent of the company. Today from the management side, we have with us Mr Anand Desai, Managing Director; Mr Gopal Agarwal, Chief Executive Officer; Mr Amit Kurana, the Chief Financial Officer; and Mr Vishal Thatkar, the Deputy Chief Financial Officer. With this, I would like to hand over the call to Mr Anand Desai for his opening comments. Thank you and over to you, sir
Anand Desai — Managing Director
Thank you,. Good evening, everyone, and a warm welcome to the Q3 FY ’25 earnings call of. Let me begin by providing updates on our business verticals for the quarter. In our Pharma and polymer segments, this our new growth drivers have continued to expand their contribution to our revenue. The pharma segment grew significantly, reaching 23% of sales, while the polymer segment accounted for 10% of sales in the nine months of FY ’25.
For the full-year, we anticipate both segments to contribute meaningfully to overall revenue. With this growth trend expected to persist through FY ’26 also. As highlighted in our previous calls, the expansion of these verticals will help create a more balanced portfolio, ensuring greater stability against sector-specific fluctuations.
Now let me highlight our financial performance for the quarter and half year under review. Our consolidated operating revenue for the quarter stood at INR392 crores, which was 32% higher than the Q3 FY ’24 and around 33% higher than Q2 FY ’25. This growth, please as discussed earlier on the back of continued growth in pharma and polymer segments and robust performance by Transfact. In the last nine months, agrochemical sector has faced a weak demand situation, especially from euro, which is expected to improve in coming quarters.
On the margins front, consolidated EBITDA margins for Q3 FY ’25 stood at 31% on account of favorable product mix and strong margins pursubmit also. Given the uptick in the demand momentum and projected offtake from our customers, we anticipate resuming our growth trajectory in the next financial year and targeting a 30% to 35% revenue increase in FY ’26. At, we remain committed to building a sustained business. Over the years, we have invested in various initiatives, including a recent INR59 crore investment in a 9.2 megawatt hybrid power plant combining solar and green energy, which was successfully commissioned in October 2024.
With the agrochemical demand picking-up coupled with higher contribution from pharma and polymer and our growing self in chemistry, we at sign are confident to get back to our growth path. With this, I would like to hand over the call to Mr Gopal Agarwal, the CEO of our company to discuss the business updates. Over to you, Gopal by.
Gopal Agrawal — Chief Executive Officer
Thank you, Anand Bay. Hello, good evening, all of you. I will begin briefly by discussing the business highlights, which will be followed by financial highlights by our CFO, Amit. As Anandai mentioned, the challenges we faced in agro segment seem to be fading away. While the Pharma and polymer segment continued to explain strong growth, driven by launch of over 17 molecules in FY ’24 and 6 plus molecule that are being launched in FY ’25. It is also noteworthy that we have around 65-plus molecule of pharma and polymer in R&D and pilot stages currently.
These 65 molecules can be split between pharma and polymer, say, approx 30 and 35 respectively. All these molecules are going to be the driver of our growth in coming times. Apart from polymer and pharma portfolio, let me take this moment to talk about our other growth drivers. Our fluorination chemistry portfolio, which got strengthened with acquisition of by ensuring uninterrupted supply of KF furniture around three years back is continuing to see a good traction from our customers.
As discussed in our previous call, we anticipate that Japan, where we have a very strong business development team will contribute approximately one-third of sales over the next two to three years with most of the business secured through long-term contracts. Further, I’m happy to share that we have recently signed one contract and another LOI with the US MNC for supply of high-performance specialty chemicals used in critical polymer applications such as defense, electronics and aerospace. With this and our new broad pipeline, we expect US as a geography to have substantial contribution in growth of the company, translating to over 15% of sales over next two to three years.
The third driver of our growth alongside polymer and pharma expansion and is our continued capability to secure, LOIs and successfully convert them into long-term contracts. At present, our order book stands at approximately INR10,700 crores spread across on an average five to six years. Of this INR10,700 crores, INR3,100 crore worth of order book is already commercialized and of the rest, majority will be commercialized in FY ’26. Keeping all these growth drivers initiative in mind, we believe that we should start seeing strong performance going-forward.
And as Anandha already shared with you that we expect to grow at a rate of 30% to 35% in FY ’26. With this, to take you through financial highlights, I would like to hand over the call to our CFO, over to you,.
Amit Khurana — Chief Financial Officer
Thank you. Thank you,, and good evening, everyone. I’ll start by highlighting the financial performance for the quarter before handing over the call to Vishal by for in-depth discussion. Starting with our CapEx update, as of December 31 December 2024, we have completed INR650 crores of the plant, INR670 crores capex. As Anandby mentioned, all the plants are on-track for commercialization by, 31 March 2025.
As noted in Anandbai’s opening remark, our new 9.2 hybrid project was commercialized in October 2024. This initiative is expected to generate annual energy cost-savings of approximately INR15 crores. Combined with our previous INR68 crore investment in our 17.9 megawatt project, the total savings will amount to INR28 crores annually. With these efforts, 65% of the company’s electricity needs will be met through green energy in the future. We remain committed to cost optimization and operational efficiency. This strategic focus, along with our ongoing expansion positions us well for sustained growth. With that, I’ll hand it over to our Deputy CFO, Vishal, for further insights into the financials.
Vishal Thakkar — Deputy Chief Financial Officer
Thank you, Mr good evening, everyone, and thank you for being with us today. I would like to share key performance highlights for the quarter and nine months ended, 31, 2024. Before we open the floor for Q&A session, I hope you have had the opportunity to review the detailed presentation and the results that we have submitted to the exchanges and posted on our website. Kindly note, our numbers for the quarter and nine months are on consolidated basis and they include 10 fact numbers as well. Let me first discuss corporated financial highlights for the quarter ended, 31 December 2024 first.
Operating revenue for Q3 FY ’25 was at INR390 crores as compared to INR296 crores in Q3 FY ’24, up 32% Y-o-Y. EBITDA, including other income was at INR121 crores in Q3 FY ’25 as compared to INR81 crores in Q3 FY ’24, up 48% Y-o-Y. This would translate to 31% EBITDA margin in this quarter, up 389% basis-points . Our profit-after-tax was at INR54 crores in Q3 FY ’25 as compared to INR26 crores in Q3 FY ’24, up 108% Y-o-Y. Our top-10 customers contributed to 63% of our total revenue in Q3 FY ’25. Talking about the nine months financials, operating revenue for nine months FY ’25 was at INR938 crores as compared to INR1,000 crores and 1,074 crores In nine months FY ’24, down 13% Y-o-Y. EBITDA, including other income was at INR262 crores in nine months FY ’25 as compared to INR306 crores in nine months FY ’24, down 14% Y-o-Y. This contend to a 21.8% EBITDA margin in this period. Profit-after-tax was at INR97 crores in nine months FY ’25 as compared to INR127 crores in nine months FY 2024. With this, we open the floor for Q&A. Thank you.
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 their touchstone phone. If you wish to remove yourself from the question queue, you may press 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. Again, if you wish to register for a question, please press star and one now you. Participants. You may press star N1 to ask a question. Our first question comes from the line of Meet Vora from Emkay Global. Please go-ahead.
Meet Vora
Yeah. Hi, thanks for the opportunity. Sir, firstly, while the pharma and polymers business is doing well, sales have been slow for quite some time now. So is this more customer-specific or market-specific rationalization in terms of overall sales?
Anand Desai
Yeah thank you for that question. Let me answer it in this manner. Definitely, there was a bit of a headwind that we saw in the market, especially in the earlier year. However, if you look at also, there was one of the large Indian MNC in the aggregate sector, which was contributing around 15% of our revenue in the business in the past historical numbers, which we have decided to withdraw our business from there. And that also has been one of the significant reasons why our market has contribution has been lower. So that’s one that I would want to highlight over and above because had that not been the thing, probably we would have been far better-off and probably our drop-in ACM would have been significantly lower and our profitability or revenue growth would have been larger than a degrowth.
Coming to how we see it from here on, we see that from the — we have started seeing the strength as what was mentioned in our opening remarks by and as well. We see strengthening of the demand, especially also from Europe and we anticipate that in Q4, you will see a stronger numbers from the as you will help also in FY ’22 as well. I hope I’ve been able to answer your question, please?
Meet Vora
Yeah, sure. Sure, Vishal. And so secondly, congrats on continuing the LOI signing and conversion of that into contracts. So again like yesterday, we have signed a new LOI. And now based on that, what is your overall outlook for the US business?
Vishal Thakkar
Okay. So you rightly identified, Meet, that these two contracts are a very meaningful contract for a contract and one contract and one LOI are very meaningful revenue drivers for us in the year. Yes, these — we expect both these contracts to be commercialized in next year itself, which would mean that would have a significant revenue addition coming from these two contracts. And we expect that US as a end-market would be in the high-teens for us by the end of next year or next year, two 12 to 18 months time, we should be looking at high teach contribution from US.
So if you look at from a geographical diversity point-of-view, if you really look at it, what has really happened to us is that the agro is there, but if you look at Personal Care continue — continues to be 10%, then if you see pharma has become 25% for us and polymer is more than 15% for us as we do. If you look at from a geography point-of-view, Europe, which was the largest market, today now we will have effectively four large markets, which is in Europe, Japan, US and India. And they all four will have a meaningful contribution to our revenue.
Revenue in addition to Singapore, which will give us some as we know. So if you look at it over the last three to four years where we have been very consciously working on our diversification strategy, you see that we have been able to diversify across products, across customers, across geography, across our end-market application and also across the plants today, we have multiple plants that from where we can cater to. So this strategy is just playing out. And as we move-in next 12 to 24 months, this would have seen a far better balanced portfolio.
Meet Vora
Sure, Vishal by. And in terms of reaching your peak revenue potential from the NY pipeline that has been signed, I think we were as we are envisaging that will be achieved broadly by FY ’27. So I think that timeline still remains or is there any change on that?
Vishal Thakkar
Yeah. So I think there we would expect that business contracts also coming in. We feel that the peak revenue should be majority — the large part of the peak revenue should have come in by FY ’28 because if you take us the that the commercialization would have happened in ’26, ’27, but the peak would come in by ’28. And also please appreciate that earlier we were talking about the numbers which were delivered in 2022 LOIs, which were we were expecting for ’24 to ’26 to commercialize.
Now we have other alloys which have come in ’24 also and ’25 as well, which will also take couple of years to commercialize and then ramp-up. So it will be the case, I would put that. There. But to share, INR3,100 crores worth of LOI and contracts have been commercialized and next year further significant part of the balanced portfolio should have also been commercialized.
Meet Vora
Okay. Understood. Thanks for that. And just last question. Are we also looking at any inorganic opportunities in this space, either on pharma, agro or polymers or within the existing verticals that we are having?
Vishal Thakkar
So, so honestly, see, we keep — we are — we keep looking at any value-adding opportunities that we can have. Like what we did for, we keep continuing to look at our certain companies which are across geographies. I think if it is agrochem or if it’s pharmaceutical or it is polymer, as long as it’s a value-adding and strategically advantageous to us, we will be keen to look at it. And we continue to look at it. As and when we have something very, very, very meaningful to share, we would definitely share with the market and with you and the team.
Meet Vora
Thank you. Got it. So thanks. That’s all from my side. Best of luck for the coming quarters.
Vishal Thakkar
Thank you. Thank you, Meet. Thank you for that.
Operator
Thank you. Thank you. Next question comes from the line of Harsh Shah from Axis Capital. Please go-ahead.
Harsh Shah
Yeah, hi, sir. Ankur Periwal. Thanks for the opportunity and congratulations for good set of numbers. First question on the changing business mix that you highlighted. So good to see personal care, pharma, polymers, et-cetera, also improving there. So will be fair to say that balance here, which is roughly around 8% will be 50% 55% of the revenues in nine months?
Vishal Thakkar
Yes, I think that’s where it should be and yes will be around 50%. Great. And the margin profile for these segments, pharma or polymer, will it be largely the similar way, the way we have been pricing our chem or these will be margin-accretive? So typically you know that how our business models are where we try and look at a pass-through from the Margin side and cost side. But because these are also the forward integration and using our current value chain, our ability to get some extra margin is likely on this scale. So both on polymer and pharma, we should have an upward bias on margins and these are very niche applications, especially in polymer, which will ensure that our ability to ask for that margin should be there. However, you know, I would — I would give a lot of — I would be conservative and say that we should look at on a balanced portfolio side than that kind of EBITDA margin that we will see, but there should be an upward bias. I would only agree with you.
Harsh Shah
Sure,. So where I was coming from was on a nine-month basis, our gross margin has expanded and this expansion is largely led by this change in business mix. And given that incrementally also the growth horizon for polymer, farm, etc is pretty healthy given the molecules that we are working on largely these gross margins numbers should be maintained. Will that be a fair assumption
Vishal Thakkar
Fairly similar. See, as you know, historically also have been really suggesting that rather than looking at me from a gross margin, I would prefer to look at myself from an EBITDA perspective because I have a contract or I have a business model that I’ll ask for the pass-through. So when gross margin is one of the factors because if there is a complex product, then the gross margin will be very-high, but my overhead will be also higher and hence my EBITDA margins will be there. So seeing me from an EBITDA margin perspective would be a more reflective of my stability of my business, but you are right. Today, it seems to be the case.
Harsh Shah
Okay. So, one thing, since you mentioned EBITDA margins, are other overheads as well as manpower cost on a nine-month basis has declined both in double-digit numbers. If you can put some more light here, is there a cost reallocation or how should one look at it?
Vishal Thakkar
So I think this is also to do with two things. One is the — because of my lower volumes also has some bit of a contribution to that and second also is also the product mix because largely if you look at it, my EBITDA margin has been — has expanded. And yeah, when you look at my console, also please see that the has really, really given a very-high margin and which is also getting to the console numbers moving on a different level, especially with the strong — sorry to interrupt, my question was more on the standalone side. I’m excluding — let’s take the — when you look at the standalone basis, I think the broad number that you’re saying is largely on account of a bit of an eastock which — which has dropped a bit, which is also the reason that you see this.
And also a little bit of primarily a bit of a volume — volume, volume part of it, which also means that there is a lesser job work that has gone out and that is also one of the reasons. So two broad if you were to see that.
Harsh Shah
Okay. And just lastly, on the working capital side, any — since the large domestic MNC is gradually exiting — sorry, we are exactly exiting the large MNC. Should we — how should we look at the working capital part, both on side as well as well as the new business, which is almost 50% of revenues now? How is the working capital you know, how are the working capital terms over there?
Vishal Thakkar
Okay. So you are right, see the — it had the sector been there in terms of let’s say, two days back when the market be more buoyant, then my working capital would have very strongly improved with this exit of customer also and also with the efforts that we have put in. Because of the slowness that we saw for the last six to four quarters to five quarters, one, my debtors had expanded, which are now coming into a more stable — it’s into the improving trend and my inventory also as my revenue now picks up, that should also start getting liquidated. I believe that the targets that we have kept for ourselves, I think the numbers we should be focusing on that and 18 odd months plus six months, we should be there.
Harsh Shah
Okay, great. Thank you and all the best.
Vishal Thakkar
Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you,. Thank you. Next question comes from S. Ramesh from Nirmal Bang Equities. Please go-ahead.
Ramesh
Thank you very much and congratulations on your results. So in terms of your operating cash flows for nine months and this year, what is the capex you have done for these nine months and how are you seeing the operating cash-flow and what is the increase in debt as on-date?
Vishal Thakkar
So, okay, let me let me let me come to the first capex part and then I’ll come back to the other parties my capex for this year has been INR200 crores right and if you look at my, my increase in my total — today my total debt level will be around 100 plus 300, so INR1,100 odd number will be my debt levels today.
Ramesh
Okay. And in terms of working capital days as of nine months, where are we in terms of the inventory and debtors and the net working capital cycle?
Vishal Thakkar
So I would say that my working capital has been similar to what I have seen in the six-month period. I would — I would suggest you to take it at that level and that’s where I would put it.
Ramesh
So when you responded to the previous speaker that you expect to achieve a reduction in working capital in 18 months. So what would be the net working capital number of days that you can achieve in the 18-month period?
Vishal Thakkar
I — that’s what we have been saying that 180 days, 200 days is the target that we are focusing and that is the target we want to continue to focus on. So today, when you look at the days, what is happening largely is because of my first-half, which was a muted half on a very, very lower half — lower numbers that I had, it will have expanded significantly when you divide it by the sales. But when you look at, let’s say, if I were to even look at our revenue, let’s say, of INR13 crores to INR1,400 crores — INR1,300 crores of putting whatever number you want to take at that point in time on a run-rate of that number,
You will see that by days start stabilizing better and the ability to liquidate my working capital will be higher from two reasons. When your sales start picking-up, your ability to liquidate inventory comes in. And two is also when there is a buoyancy in the demand, your ability to request a customer to pay on-time is also higher and which both will ensure that in next 18 to 24 months, we should be able to achieve that. That’s the target that Ramesh, I would focus on-going forward as well.
Ramesh
Okay. So if everything works well in terms of your own business plan, where do you see your debt — these gross debt figures in the next two years?
Vishal Thakkar
So I don’t want to — give any guidance on those numbers, but give you very simple one anecdotal and then probably you are better at me to really project it. But if you look at ’22 versus ’23, my working capital actually had — when my sales picked-up, my working capital days reduced by around about 40 to 50 days from 290 to 240 days and 250 days. And that year, if you look at it, my operating cash-flow from operations was around about INR255 crores when I compare to the PAT of INR170 crores. So I believe that the moment we start achieving the growth and the reduction in the working capital days, there will be a very strong conversion of EBITDA to operating cash flows.
And for the first one to two years, we will have a stronger benefit from EBITDA to PAT, EBITDA-to-cash and that’s what you will see as we go-forward. So — and what will happen is that I don’t have any right now any capex that has been planned, this cash will only convert into a reduction in the net.
Ramesh
Okay. So if you look at the warrants issued to promoters, when do you expect the balance money to be paid, how much would that be when everything is a
Vishal Thakkar
INR270 crores, which is expected in the first-quarter of FY ’26 and that also will ensure that I have reduction in debt because that primary usage of that is debt to a large extent.
Ramesh
Yeah. So let me squeeze in just two more thoughts. One is, your capacity has gone up from 27,000 to 30,000 as per the latest percentage. So whereas the 3,000 ton expansion happened in Unit 5 and 6 in Sachin, where exactly has it happened?
Vishal Thakkar
So one in Sachin, one in Jagaria and another one will come in Jagaria as we go.
Ramesh
Okay, it’s all about 1,000 each,
Vishal Thakkar
Large — not because it will be 1,000 from 1,200 plus the balance Will be in the — in.
Ramesh
Okay. Okay. Okay. And between domestic and exports, can you give us a split, what is domestic and how much is exports as of nine months or 3Q?
Vishal Thakkar
It’s broadly 50-50 for now.
Ramesh
Okay. So one — if you’re looking at your margin profile, as you said, you’re expecting you know some improvement based on your product mix and there is an expectation of 35% growth. So what is the base FY ’25 revenue you are pension in for that growth? And in terms of the overall portfolio margin, assuming that you’re able to convert the LOIs and the existing business, you will be able to maintain that current year average trend in terms of margins?.
Vishal Thakkar
So Ramesh, I don’t want to give a very specific guidance for the month. Let me give you a directional one, which probably will help you in terms of estimating where we are looking at. One, I will continue to guide at 26% to 28% EBITDA margin, though I know there is an upward bias, but I would want to do that for two reasons. One, there will be a ramp-up of new plants, which has its own implication in terms of overheads at least in the initial vendor ramp-up starts happening.
One, two, when you have a newer product, it takes you a curve — there is always a curve that you — in the expected efficiency over one or two cycles of production. So that is the second point where I would like to keep it at 26% to 28%. And in terms of revenue, as I had also mentioned that on a consol basis, we should be flattish in terms of standalone, we should be having a mid-teens kind of a degrowth is where I will put it at.
Ramesh
Mid-teensity growth for the full-year FY ’25, right
Vishal Thakkar
On a standalone basis. Yeah.
Ramesh
Okay. Thank you very much. I’ll join the queue and wish you all the best. Thank you.
Vishal Thakkar
Thank you. Thank you, Ramesh.
Operator
Thank you. Next question comes from the line of Rohit Nagraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Yeah, thanks for the opportunity — opportunity. Couple of clarifications and couple of questions. First, in terms of clarification, you mentioned that the total number of — the total quantum of LOIs that is commercialized at INR3,100 crores. So is it reflected in numbers or these are the contracts which have been commercialized or how should we look at this particular number?
Vishal Thakkar
So you are right that not — you cannot say — you’re right that I cannot say that 300 and 3,100 divide by INR500 to 600 is a reflection in the revenue of. And finally is the reflection in the revenue? Answer is no, you’re right. That’s not the case because it’s time to ramp-up. But I can only say that this year we should be looking at around about 20% to 25% of revenue coming from this LOIs and contracts. This year means FY ’25 FY ’25, I’m talking about FY ’25. FY ’26 should be a significantly higher number.
Rohit Nagraj
Correct. Got it. Second clarification again, the growth of 30% 35% Y-o-Y, are we basing it on the standalone numbers or consolidated numbers for FY ’25?
Vishal Thakkar
Standalone.
Rohit Nagraj
Okay, fair enough. The couple of questions. Now in terms of the gross margin expansion that we have seen, so historically also you’ve been telling that normally we have a back-to-back arrangement in terms of the raw materials as well as the contracts that are in-place. Place and hence our gross margins or even EBITDA margins are largely secured, but quantum jump suddenly in a particular quarter. So are there any other factors which have moved these gross margin significantly given that you are again — you just alluded that on a sustainable basis, we still look at, say, 20% 38%. So is there any one-off which has moved these gross margins during this quarter?
Vishal Thakkar
Rohit, really now it’s more to do with the product. What product has contributed, how much to might be? So this quarter has been where there is a product — there are a couple of products which has higher gross margin and that is the reason you would see it on a quarterly because depending upon the schedules, few products go in a particular quarter versus other products grow in a different quarter. So on an annual basis, if you look at it, you will see me more stable. And also what I would encourage and that’s what I’m trying to share that look at me more from an EBITDA than the gross margin level because again, when you have a pass-through, I also not only have a pass of normal, but I also approve of my overheads, my utilities, my every other cost.
And that’s where I try and look at the EBITDA number, which is a more reflective of that relationship. And as I was saying that if there is a product which is a more complex product, then the complex product will have lower gross margin because there is a — there are multiple steps and when multiple steps are to be executed, the overheads and the utilities would go higher. And if I keep my EBITDA margin to be constant, that means that I would have to expect a higher gross margin to compensate for the higher overhead that would be there. So I would put it only largely to that phenomenon than any other phenomenon.
Rohit Nagraj
Right. So just to summarize, probably if there is any change in a particular quarter, it will get even out during the course of, say, four quarters.
Vishal Thakkar
Exactly. And that’s the reason if you see, I have been very conscious of making those numbers, making that guidance on the numbers. And also in terms of if you look at my nine months, they are more in-line with rather than the reflection of the quarter.
Rohit Nagraj
Okay. And you also mentioned about one of the domestic LNCs going out-of-the I mean we have terminated the contract for. So this is 15% of revenues or total revenues?
Vishal Thakkar
Totally.
Rohit Nagraj
Okay. And this is — this has happened in FY ’25.
Vishal Thakkar
Huh? Sorry, I didn’t hear you.
Rohit Nagraj
This has been taken effect from FY ’25. Is that the right way to look at it?
Vishal Thakkar
There was — the process started from ’24 and ’25, you can see the full impact.
Rohit Nagraj
Fair enough. Just last question on the capex front. You said INR200 crores of capex. However, the INR670 crores probably is still sitting at the CWIP level and hopefully will get commercialized during this quarter. So how do we look at that? So 670 plus INR200 will be the total cap?
Vishal Thakkar
No, no, no, no. No, no, no, no, no, INR670 will be the total capitalization. What I — what we asked was the cash outflow for the capex of the year and I said INR200 is the capex for the year.
Rohit Nagraj
Fair enough. So that
Vishal Thakkar
Include INR650. So totally, you will see that INR670 crores of gross block would be added by the year end.
Rohit Nagraj
Right. Got this. Thanks a lot and all the best.
Vishal Thakkar
Thank you. Thank you, Rohit.
Operator
Thank you. Next question comes from Ashwini Agarwal from Advisors LLP. Please go-ahead.
Ashwini Agarwal
Good evening, sir. Good set of numbers. Congratulations. A couple of clarifications, two questions earlier asked. One is on the debt level. Did I hear the figure right that INR1,100 crores is your gross debt number as of 31st December 2024?
Vishal Thakkar
Yes.
Ashwini Agarwal
So does that mean that it has come down by a 170 crores because as of 30th September, this number was 12 70 from what I can see. So
Vishal Thakkar
Okay. Just what you’re saying, can I get it again, please?
Ashwini Agarwal
Yeah. So basis what I can see, as of 30th September, your gross debt number was INR1,270 crore. And what you mentioned was that now your gross debt number as of 31st December is INR1,100 crore. That would indicate INR170 crore repayment. Is that right or am I missing something?
Unidentified Speaker
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Vishal Thakkar
Okay. And corrected, the total number is around INR1,200 crores. You are right. I corrected on that. INR1,200 crores. So there’s still a marginal decline from INR1,270 crore to INR200 crore would that be — that’s more to do with the capex repayment, the term-loan repayments largely.
Ashwini Agarwal
Okay. And sir, if you could just clarify that again, I think Ankur had asked at the start of the conference call that the decline in operating expenses on a standalone basis that we see on Page 8, which is quite substantial. You mentioned that it’s mostly due to outsourcing costs of contracts that you give out or is it that you capitalize some of the costs related to the capex, there is no capitalization. Is that a fair assumption to make?
Vishal Thakkar
Yeah, there is no capitalization. See, I’ll tell you a very simple thing. Let’s look at my revenue for the six months standalone last year, nine months last last year.
Ashwini Agarwal
If you look at the right in terms of my sales, right?
Vishal Thakkar
Yeah. Now if you look at that, right, that also If you look at my employee benefit, let’s say, the reduction is lower than that, right? Other expenses also, it is not as low as that. So largely, see, not all of these cost is a fixed-cost, right? There is variable-cost to it, especially the outsourcing of job work cost, right? And so that way you will see that you will be in the similar numbers, that’s what I was trying to say. So honestly, there is no — if I were to put it simply, the variable part of the cost has been reduced because of the volumes that has been produced and sold? And on the employee side, largely it is the cost, which has really been the reason for that.
Ashwini Agarwal
Okay. Perfect. Thank you. And sir, would you be able to read-out the numbers for inventory and essentially inventory number as of 31st December, this number was INR1272 crores as of 35.
Vishal Thakkar
I would — I would — I would excuse myself from this because a, we don’t list out those numbers for the — for the 3rd-quarter. I would — because then again, I would have to report out all the other numbers because then only my balance sheet would be fairly. So I rather I would say the similar range is where you can take it for now, please.
Unidentified Speaker
Thank you so much. I hope to — I hope you appreciate it. Apologies if I have not been more helpful than this. But you can — my words on that, that we are fairly stable on the — on those numbers right now. So on an absolute.
Ashwini Agarwal
That’s fine. Thank you, sir. All the best. Thanks.
Unidentified Speaker
Thank you.
Operator
Thank you. Next question comes from the line of Raja Kumar of from Arca Investments. Please go-ahead.
Unidentified Participant
Yeah, good afternoon. Thanks for the opportunity. Am I audible? Thank you?
Unidentified Speaker
Your is a bit cracking, if you can be a bit more.
Unidentified Participant
Yeah, can you hear me now?
Unidentified Speaker
Yeah, that’s far better.
Unidentified Participant
Yeah. Thank you. Sir, sir, my question is on the inventory. Sorry to labor on that. So if I see your September inventory was INR1,270 crores and if I see your December number, the changes in inventory is almost INR120 crores negative with this, which means we have added further INR120 crores inventory. So it’s about INR1,400 crores of inventory roughly you should have as of December. So and I also look at your material cost to sales is about 40% on a consol basis. So which means you are roughly carrying almost you know inventory to serve almost INR3,400 crores worth of revenue, which is — which is almost like two years of revenue. So I just wanted to — if you could just give some color why we are adding material — this material? Is it because is there a lot of lead-time is involved in locating this material or is it a long production cycle, if you could just enlighten us, it will be really helpful.
Vishal Thakkar
Thank you. Sure. So I would not speak on the specific numbers that you have and I will leave it to your judgment on that. But let me answer the question and say that why are we having such a high inventory, be it be INR1,000 crores or INR1,100 crore or whatever number we derive at. Let me put it very simply. If you look at large part of my that inventory will come from our finished school and WIP and not of RM. RM would be — will be 15% to 20% or 20% plus or minus 5% of my total inventory holding. Now why do we need to hold this inventory on a structural basis, I’ll answer first and then I’ll answer why it is higher than the structural basis as well.
So on a structural basis, if you really look at it, I am one of the primary civil supplier to my customer. And when I am that, I need to hold a particular level of WIP. What is WIP to me is basically a product which is which is here ready to be dispatched, but I would want to keep it not yet finished because then where the aging comes into play, I will keep it one-step before or I will hold the distillation process back so that the age of the product is not starting.
So that’s the reason you see WIP and finished good. And hence, if you have to see me, you would see me as a percentage of sales inventory as a percentage of sales rather than percentage of comps, which you are seeing me at right now. So that’s one that I would say. Having said that, even after assuming of that numbers, whatever, I would say that my steady-state sustainable business model should have been around about 180 to 200 days of those numbers.
And if you look at me at that numbers, you will see that my ROCs, my turns, everything will play-out. However, today, I am higher than that, even if you look at the September numbers have been significantly higher than that and for that. When I exited ’23, I was at a run-rate of around — I was on a turnover of INR1,300 crore and a run-rate of a INR40 crores INR1,500 crores of revenue on a run-rate basis. And I was expecting the revenue growth in the next year as well.
Now when you are planning with that kind of a revenue growth, the production plans are accordingly. And when — instead of that, we had a degrowth for 18 months. If you really look at it, for the 18 months from then on, we have a degrowth plan that we saw. So I had a double revenue where I had a production and hence the inventory accumulation. But my — my sales did not happen. So my numerator has dropped. Today, you will see me at a TTM of INR900 versus what had there been a growth, I would have been a TPM of INR1,500 crores to INR1,600 crores at that point in time because on 13, even if I put a 20% to 25% growth, I would be at 15% to 1600 crores. All my numbers would look more reasonable.
And two, also what happens is that when you produce, but you are not able to sell that accumulates into your inventory. And so inventory expanded on an absolute number also, which is what you would have seen me from ’23 to ’24 September numbers which were reported. If you look at it, we have expanded — expanded by around INR200 crores to INR200 crores to INR250 odd crores of inventory. So that both put together has really expanded the situation. Had there not been there, I would have achieved that number. And if you look at the trajectory from ’22 to ’23, the trajectory was there.
So 290 had gone to 250 and one more year of growth where I would have been able to liquidate my working capital and also increase my revenue, I would have been at a 2200 days that was what was projected. So I appreciate — I appreciate this is a matter of concern for each of us. The only thing that I can say is the reflective will be when I get my sales back — sales growth back because sales is there, but it’s not sufficient enough. So when the sales growth is back, we would be able to see the numbers which are more amenable and more sustainable to the business model that we have. So I hope I have helped you on that.
Unidentified Participant
Yeah. Yeah, this is helpful, sir. And any comment on the material cost percentage to sales, it’s about 40%. So we are roughly having two years of inventory. So if you could —
Vishal Thakkar
That’s what I’m saying. It is not the way — I would not see it that way. For a very simple reason that 80% of my working capital is a finished goods to working capital progress. So then it is not COGS, it is sales and so you want to see me through sales rather than through COGS. Because when I sell, sell it’s a — it’s a nine months sales number then 12 months that is there. The moment I start selling, it comes to that number.
And that’s the reason this — and look at my number because I’ve declared my working capital work-in progress numbers or my finished good and my RM number, and you will see those reflection and that’s where I’m coming and saying that look at me from the sales rather than from the.
Unidentified Participant
Okay, this is helpful. Sir, just to extend the question just one more question. Sorry, I’m just collecting my sorry. No problem please stick. I’m sorry, I’ll just get back, sir. I just
Vishal Thakkar
— no problem. You please join in as and when you want. Happy to answer you.
Unidentified Participant
I’ll fall-back in the queue, sir.
Vishal Thakkar
No problem. Thank you.
Operator
Thank you. Next question comes from the line of Tushar Ragat from Kamaya Care Wealth Management. Please go-ahead.
Unidentified Participant
Yeah, good afternoon, sir. Thank you for the opportunity and congratulations for a great set of numbers. Again, sir, the question is on the working capital. From the last five years, I do see like your working cap, like your inventory as a percentage of sales or from 40%, it has been to 72% of firstly, I would just like to know what would be the average of that? Is it 60% or like just a random number I’m saying. So accordingly, you know your take on that first —
Vishal Thakkar
Okay. Sustainably, eventually my number should be 50% plus or minus 5%. So 58% you are seeing, 55%. Okay, okay. So that means you are sustainably — sustainably 50% plus or minus 5% depending upon the business cycle, depending upon the number of molecules that I launched, depending upon the contract that I get into, but you should sustainably see me at that level.
Unidentified Participant
Got it. So that means like a more or less INR2,300 crore of sales considering the inventory you are
Unidentified Participant
Carrying right?
Vishal Thakkar
I don’t want to — I would not put the exact number, but it will be two things, please appreciate. I’ll put it three because this number when I sell it sells completely, right? It is a one-time sale. This is not two-time sale because let’s say, I have INR1,000 crores of inventory, right? If I sell INR200 crores, INR200 crores is reduced right, because that is ready to be sold and I’ll go to INR800. Now, but right. So what I’m saying is please appreciate that as simple as that eventually, because I said that there are two-parts to my working capital. One is a sustained working capital which will be required for my business to sustain.
Okay. And two is, there is an additional working capital which is there because of the situation that I mentioned in the earlier question in the prior quarter. So if you knock these two up, you should see me like, let’s say, next year, so that’s why I’m saying that by-18 to 24 months, I should end-up with a — with the numbers that we have talked about, which is where I should be achieving 180 to 200 days of my working capital. Sales is my working capital and it will be a combination of two things. One is liquidation of some part of the working capital, is; and two is increase in the sales that I would expect. So combination of these two will come to a more sustainable number rather than only one.
Unidentified Participant
Okay. Got it, sir. Just one — again, one question, sir, on the trade receivable part, so like five years AGR of the sales is 24%, but the trade receivable is growing at 37%. Just what is your take on that?
Vishal Thakkar
So if you look at two years back and if you look at my growth, my CAGR of sales and CAN are receivables, only in the last 12 to four to six quarters that number of receivables have expanded. Yes, and that’s largely because of this — when the market pass-through, you tend to give an additional credit, which I have given and that is the reflection. I can give you one simple example. One of the largest techn company in the world is they requested us that we were due to pay you in November. But as my year is ending and this is a — this is a slow — this is — I’m reading between the lines that this year has been slow year and my year is healthy, why don’t I request you to pay you in January not in December in November? And for that, if there is any cost, I’m willing to pay the cost.
Now he — that is the customer who has been with us for last 10 years or more. We are doing multiple products with them. We are doing multiple new projects with them. I don’t see anything first like that. And mind you, there are. So I appreciate that it has expanded, but you also do see from the reflection of the market realities where the markets have really, really been pretty weak for my customers and I have to stand-by them, which is what I have done on the receivable side.
Unidentified Participant
Okay. Got it, sir. And sir, you’re not
Operator
To interrupt. Tushar, sir, may we request you return to the question queue for follow-up question, please.
Unidentified Speaker
It’s okay. Let him ask this question and then we can. It’s okay.
Unidentified Participant
Okay, sir. Thanks for that. Sir, just wanted to know your non-agro business, like due to that, do you see any working capital relaxation — relaxation going-forward?
Vishal Thakkar
Yeah, you would see. See, every business will have its own dynamics. So in some businesses, you will see that the inventory is higher in pharma, if you look at, because large part of my pharma business is Indian pharma business — receivable days will be higher because India tends to be longer on the — on the payment cycle side and also they tend to delay from the promised ones. So when you see my receivable days expanding, you will also have a reflection of that. But on a total basis, on the other side, pharma will have a lesser inventory requirement because again, I have — I will have that kind of work. So overall, you will see it will be even seven, but yes, there’ll be advances to each of segments.
Unidentified Participant
Got it. Got it. That was really helpful, sir. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. Next question comes from the line of S. Ramesh from Nirmal Bang Equities. Please go-ahead.
Ramesh
Thank you for the follow-up question. There are two-parts. One is, if you look at the kind of indication you gave on the mid-teens kind of decline for full-year, it suggests that you have to grow your 4th-quarter revenue by about 15%, but because last year you did about INR308 crores. So what is the visibility you have to, you know, surpass last year’s 4Q revenue as we speak? And secondly, if you look at the mapping of your growth drivers on, I think Slide 17, you have given the three growth drivers, polymer, pharma, LOIs and then chlorum Nation. So can you report any overlaps and say what percentage of your growth will come in each of these areas because there could be some, you know, a common products across the three categories. So if you can split these three drivers into independent categories of growth to avoid the overlapping and duplication, that would be very helpful.
Vishal Thakkar
Thank you. Sure. So let me answer that first question. What you were saying about my — what you have deles in terms of the indication, it’s fairly the right reflection. And I believe why we believe that we will be able to deliver is a very simple thing that if you look at it, as I said, I have a very-high visibility coming from my customers’ demand. It’s coming back and I am seeing that the customers have requested for those volumes and hence that number will be the number that is there. And if you see last year, whatever we did was also lower than what we did in ’23. So is it that this is the numbers which we have not delivered? The answer is that we have delivered these numbers.
We believe that the numbers that we have been seeing in terms of whatever demand that we have seen from the customers, whatever orders are there, we feel far more comfortable. And also please appreciate now is the new year for my customers, large part of my customers and they have a more buoyancy in terms of their ability to give me a more you know firm demand, which I have — which we are seeing now. So all-in all, pharma polymer continues to give me the growth and it can — coming back will give me this growth.
Ramesh
Okay. Yeah, on the second question on the growth drivers, if you can step off the — yeah.
Vishal Thakkar
So next time onwards, I’ll try and see how we can share that with you. Because see, it is very difficult to do set on all the four — all the three parameters, but we’ll try and see how we can present it better-for-you.
Ramesh
So yeah, that would be very useful. And thank you very much and wish you all the best. Thanks.
Vishal Thakkar
Thank you.
Operator
Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr Vishal Thakkar for closing comments.
Vishal Thakkar
Thank you. Thank you, everyone, for your active participation this time. Definitely it was very, very helpful and exciting. We hope that we have been able to answer most of your queries. I also apologize if I have not been able to give more specific answers because of the current constraints that we are as a listed company to not meet a very specific guidance. So any of the questions or there are some questions in this call, please feel free-to reach-out to our IR partner ENY, and we will be happy to take it offline. Thank you very much.
Operator
Thank you. Thank you. On behalf of Anupam Rasayan India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.