Archean Chemical Industries Limited (NSE: ACI) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Ranjit Pendurthi — Managing Director
Natarajan Ramamurthy — Chief Financial Officer
Rajeev Kumar — DGM Finance
Kannan NR — Executive Director
Analysts:
Aditya Khetan — Analyst
Sanjesh Jain — Analyst
Rohit Nagraj — Analyst
Rushabh G Shah — Analyst
Srishti Jain — Analyst
Chetan Joshi — Analyst
Presentation:
Operator
Hello ladies and gentlemen, good day and welcome to the Arcane Chemical Industries 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 call, please signal an operator by pressing star then zero on a touchstone phone. Also before we go-ahead, we would like to inform you that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinion and expectation of the company as on the date of this call. These statements are not the guarantee of future performance and involve risks and uncertainty that are difficult to predict. I now hand the conference over to Mr Ranjit, Managing Director of Chemical Industries Limited. Thank you, and over to you, sir.
Ranjit Pendurthi — Managing Director
Thank you. Good morning, everyone. A very warm welcome to all of you joining our Q3 and Nine-Month FY ’25 earnings call today. I truly appreciate all of you taking the time to be with here — to be here with us today. I know it’s a busy morning and busy time in the market. So let us go-ahead. Before we get into the business updates, I would like to take a moment to introduce our new CFO, Mr Natrajal Ram, who has joined us last month. He is a qualified chartered accountant and a certified public accountant from US, bringing over three decades of experience from a diverse range of industries. His insight and expertise will be invaluable to us as we continue on our growth journey. We welcome him on-board. Thank you. At the same time, we would like to also thank and appreciate our erstwhile CFO, Mr R., for his contributions to the company and we would like to wish him the very best for his future. Today, I’m also joined by Mr NR Kanan, our Executive Director; Mr Rajiv Kumar, DGM Finance; and SGA, our Investor Relations Advisor. We have uploaded our presentation, investor presentation last night, and I assume everyone had a chance to go through the financial results and the presentation and this is available on the stock exchange as well as on our company website. I will give you a quick snapshot on the recent developments of the company. Post that, Mr, our CFO, will walk you through the operational and financial performance of the company as well. To start with the market overview and business outlook. As you know, the current macroeconomic conditions and uncertainties have heightened across the globe and the chemical market and industry remains quite challenging. And however, despite this, as your company, we remain confident about our long-term trajectory and our growth vision. The domestic consumption and demand in major global markets, including the US, China and Europe have faced some challenges and some of them remain sluggish, resulting in an oversupply of certain raw materials, feedstocks and to gain market-share aggressive pricing from major suppliers. Consequently, as you are aware, average realizations for the chemical industry as a whole have been under pressure for some time. While post the Chinese New Year for our own business, we expect a partial recovery in both demand and pricing and we are seeing this uptick happen as we speak. Of course, the impact of ongoing tariff changes on global trade will have to be ascertained as we go-forward and everyone has to have their own strategy to deal with the same as and when it happens and if an impact happens on any of us. On the domestic front, India remains a strong structural growth story within the emerging markets, offering new opportunities. We obviously have a dominant position within the bromine space in India and we continue to build-on that. We are committed fully to navigating these challenges while staying focused on expanding our market-share and improving operational efficiencies. Coming to our company itself, we are happy to announce that your company has been awarded the Responsible Care Certification in the past quarter by the Indian Chemical Council, which is valid for the next three years. This recognition is a testament to our continued deep commitment to sustainability, safety and ethical business practices. I want to personally thank our employees for making this possible. It’s their dedication that keeps us moving forward and the faith the shareholders have in the company. For Q3 FY ’25, our revenue stood at INR200 to INR255 crores. And while we have seen some short-term moderation demand, we believe these are temporary. So our order book continues to be healthy and for the next six months-to 12 months, both bromine and salt have locked-in volumes. We have been actively working to strengthen our relationships with customers, optimize costs and enhance supply-chain efficiencies. More importantly, we have also been successful in onboarding new clients, which is a strong indicator for future growth and also the confidence that buyers have in us for the long-term, right? With the weather-related disruptions that caused some slack in the supply-chain and logistics that flowed into last quarter and some part of — towards the end-of-the last quarter. This is largely now behind us and we have been consistently improving our logistics performance this quarter and we’ll continue to do so in the coming quarters. This obviously will help us do better in terms of both volumes and realizations. Coming to the segmental performance, elemental bromine, the bromine business is showing signs of recovery as we anticipate a gradual pickup in ahead and especially with China’s recent stimulus measures, we are seeing some pickup on-the-ground in terms of construction activity and other projects in China. Prices have remained stable and in some cases, we have seen slight improvements as well. We expect to produce nearly 20,000 to 25,000 tons of bromine in FY ’26, including captive consumption. Moving on to industrial salt, as informed in our last call, we had faced some challenges last quarter due to monsoon and cyclone and obviously, things are getting back on-track. Our displatch process has been smooth and likely to improve further, as I mentioned a few minutes ago, improving our volumes. We’re optimistic at both achieving 1 million to 1.2 million ton run-rate in the coming quarters and constantly working on improving the supply-chain as well on this front. SOP and SOP trials are progressing well. We see improved performance from this vertical in the very near-future. These three core businesses form the backbone of our company, ensuring a steady cash-flow and giving us the financial flexibility to invest in future growth projects. Coming to Acuum, our subsidiary for bromine derivative products. The ramp-up of our bromine derivatives plant is progressing steadily and we anticipate meaningful revenue growth in FY ’26. On the Clear brand fluids, we have successfully dispatched few trial shipments and we are working closely with clients to refine their specific requirements. However, as you all are aware, approval from oil and gas procurement departments is a bit slower and because of the technical specifications and grades involved, but we are confident of getting these trials accepted and also the quantities improving in the coming quarters. We expect a healthy contribution from CBF segment in the coming quarters. In PTA synthesis, the demand remains steady, supported by growth in textiles and packaging industries. We see good opportunities here as polymer consumption increases. In all, we believe that the bromine derivatives business will pick-up in the next few quarters and we are confident of achieving the growth targets that we’ve set ourselves up for FY ’26. Core and hydrocarbon, this is the company that we had acquired to the NCLT route in July 2024. We are making good progress on bringing these units back into operation. After a number of years of being non-operative, refurbishment works obviously takes time and we plan to start — restart two units this quarter with two more in the coming months. This business complements our CBF segment, which primarily caters to the oil and gas industry. The order inquiries will look promising and we’re optimistic about its future potential as well. Coming to our strategic initiatives, which we have shared over the last few quarters, investment in the semiconductor manufacturing business, one of the recent developments for us has been the groundbreaking of a semiconductor facility at the Utkarsh Orisha enclave during end January 2025. This is an important step for our company and a proud moment for all of us. Through our subsidiary Private Limited, we will eventually invest up to INR3,000 crores in a compound semiconductor facility, the first-of-its-kind in the country, which integrates wafer fabrication for key industries such as electric vehicles, energy storage, industrial tools, data centers, fast chargers and consumer appliances, etc. The state government of Odisha has allotted 14.5 acres of land in for this project under the Odisha semiconductor and Fabless Policy 2023, further reinforcing commitment to India’s semiconductor ecosystem, which is encouraged and envisaged by ISM India Semiconductor mission. Earlier, we have made a strategic investment in Classic Wafer Fab Limited, a UK. Based company specializing in silicon carbide wafer manufacturing. This is India’s first investment in a company with silicon carbide, MOSFETs, stroke devices production capability. The primary subscription of GBP, British pounds, 10 million and secondary purchase of GBP2.5 million is completed and the balance 2.5 million will be done at a later-stage. Coming to our investment in energy storage solutions,, our company has committed a total investment of nearly $12 million in Energy Labs Inc. Delaware US, a company specializing in zinc bromide battery technology. This investment aligns with the company’s broader strategy to enter the energy storage sector, particularly focusing on renewable energy and industrial storage applications. Our bromine business synergizes directly with the zinc bromide-based batteries. We are confident that this will be a significant growth area for us in the future with the increasing focus on sustainable energy solutions in India and as well as storage solutions globally. We continue to remain a net debt-free company with a strong balance sheet. This financial resilience allows us to make strategic investments and sustain long-term growth. Our focus is on executing our business plans effectively and continue to create value for all stakeholders in both the present businesses and in the new growth businesses that we’ve identified and started investing in. Now I request our CFO, Mr Natrajan Ramurti to give highlights on the financial performance
Natarajan Ramamurthy — Chief Financial Officer
Thank you, sir. Thank you and a very good morning to all the participants on the call. I would like to give you a quick financial summary of Q3 FY ’25 on standalone basis. Total income increased to INR2,547 million in Q3 FY ’25 from INR2,520 million in Q2 FY ’25. Operational profit increased to INR755 million in Q3 FY ’25 from INR698 million in Q2 FY ’25. Within the operating revenue, export market contributed around 76% and remaining 24% came from domestic market. Our mark — our business mix are as follows in Q3 FY ’25. Bromine contributed 38% of the operating revenue, whereas industrial sauce contributes around 61% of the total revenue. EBITDA for the company stood at INR963 million in Q3 FY ’25 with a margin of 38%, an improvement over the last quarter. Forex gain in Q3 was INR4.27 crores. So coming to Nine-Month FY ’25 performance highlights, total income stood at INR7,301 million in FY ’25. Previous year’s total income was at INR10791 million. Operational profit stood at INR2104 million in FY ’25. Previous year it was INR3,491 million. Export market contributed around 75% and remaining 25% came from domestic market. Our business are as follows in nine months FY ’25. Bromine contributed 40% of the total revenue, whereas industrial result contributes around 60% of the total revenue. EBITDA for the company stood at INR2,710 million in nine months of FY ’25 with a margin of 37.1%. We have started sourcing power from renewable resources, thereby reducing our carbon footprint and achieving the financial savings. ForEx gain for the nine months of FY ’25 was INR7.32 crores. We continue to remain net debt-free and have a strong balance sheet. Thank you. Now I request SGA to open the floor for Q&A.
Questions and Answers:
Operator
Sure. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on your 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from Khetan from SMIFS Institutional Equities. Please go-ahead.
Aditya Khetan
Yeah, thank you, sir, for the opportunity. Just a couple of questions. Sir, first onto the bromine business, as you had mentioned in your commentary that you are witnessing an uptick. I believe, sir, so almost around six monthly volumes and prices are already contracted. So this uptick would be largely visible from Q1. Is that a fair assumption to take?
Ranjit Pendurthi
Yes. I think it is a fair assumption to make. And I think you’ll continue seeing that go through the remaining quarters as well because obviously as we keep finishing the contracts, we keep getting into the new ones. So yes,
Aditya Khetan
Okay. Sir, on to the salt business, sir, we are seeing some moderation into the prices of salt. And there also, sir, I believe almost around one year of the volumes and prices are contracted. So this moderation in prices is you see the new contracts which we’ll be making that would be at lower prices and because 60% of our business comes from salt, do you see any sort of a decline in the salt business from here on?
Ranjit Pendurthi
I think the salt business continues to be very healthy. And given the fact that we’ve been in this business for a long-time, most of our customers, again, our large customers. However, at the same time, we have tweaked the strategy a bit. There is an opportunity to make a little bit more on the pricing if we are doing some business on more spot basis. When I say spot, it doesn’t mean we fix today and ship tomorrow, it means one month-out, right? So I think between that blend of the pricing would be, I think it’s still on a very firm footing. If we compare it to the last year’s contract pricing, yes, it will be a bit below that. But at the same time, I think given the fact that some of these are CNF contracts, we may gain some on the freight, given that oil prices are also a bit moderated now. So overall, I think on a contribution basis, we will still endeavor to maintain that margin.
Aditya Khetan
Okay, got it. Sir, my next question is on to the recent investment like we have planned for 2028. So this INR3,000 crore investment would be done solely by or it would be done by your subsidiary for.
Ranjit Pendurthi
So the investment will happen on SixM Private Limited books, Chemicals will play a role either in helping with the financing as a parent or in terms of providing some ancillary services like industrial gases, etc., which are a very important component of the semiconductor plant.
Aditya Khetan
Okay. And sir, this big investment, I believe, sir, we have not done any such big investment till now. Sir, how things you how you see like things will shape up like what would be the asset turnover? I believe this is a business which is more capital-intensive. So what sort of a number you can — if you can guide anything like from ’28 to around — so 2030, this two years, how this business will shape up in terms of the financial performance and for this, how much debt we will take, I think for this, our balance sheet also would be leveraged to some extent, considering even the operating cash flows and cash which we have, you see like balance sheet also like so leveraging a bit on that part and how the numbers will shape up?
Ranjit Pendurthi
So I’ll answer the first part and last part of your question and I’ll address the middle part of your question. The first part is, I think in terms of any investment, right, small or large, ultimately, you need to keep two, three things in mind. One is, does it create value for all stakeholders in the longer-term? If we invest today, what is the risk and what is the reward? And is it the right industry to be in from a growth perspective? And is it future looking in terms of both, does it serve unmet need within the domestic market and is there a potential for an export market. So we understand the markets well, right, both domestic and exports. Now in terms of risk and reward, obviously, we’ve done that analysis and we believe that it is the right project to invest in. And the third-part is, you know, I think does it create long-term value? For sure, it does in our view. Okay. Now the last part of the question in terms of leverage, I think we’re very sensitive to leverage. As you know, since listing also, we continue to be a debt-free company and we would like to see how best we can use the balance sheet without having to expose the parent unnecessarily. But at the same time, we will have to go to the banking system and then we have to see what kind of financing we are able to structure around this. But at the same time, I think in terms of your middle part of your question in terms of what is the outlook in terms of cash-flow, et-cetera, between ’28 and 2030. I think that’s a bit of putting the horse before the cut. I think at the right time when we do the financial closure, I think it will become clearer and we are more than happy to update the stakeholders at that point. My colleague, Rajiv, would I like to add something here.
Rajeev Kumar
Good morning. Also on the financing side, a good part of this capex will be provided as a subsidy by the state government, which is approved by the State Government under Odisha Semiconductor and Policy 2023. Our project is also pending with — under review with Indian Semiconductor mission. So the whole financing mix will be able to answer once we have a clarity from the center government as well.
Aditya Khetan
One last follow-up onto this, sir, what would be the like so peak revenues from this business and our overall margins are somewhere around, 30% 35% range. So since this is a capital-intensive business, margins would drip down on consol basis. Any sort of a number sir you can share like what would be the peak revenues and
Ranjit Pendurthi
So I mean at the moment, you know at the moment, we are, I think not ready yet to share. But at the same time, I want to quickly also mention that not all capital-intensive businesses need to be low on margins. I think it’s a sector-specific. I mean, if I go back-in history, when we invested INR1,200 crore INR1,300 crores in our Chemicals project, it was considered high capex relative to anybody else having done a similar investment in a similar field, but we’ve been able to deliver healthy margins consistently for many years. And going-forward, we plan to do that as well. So I think like I said, things will become clearer once we move towards financial closure and we’ll be happy to update those, I think the business projections at that point.
Aditya Khetan
Okay. Thank you, sir. Thank you.
Operator
Thank you. The next question is from Sanjaysh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah, good morning. Thanks for taking my question. Let me first start with the bookkeeping questions. Can you help us with the segmental revenue and volume sales?
Natarajan Ramamurthy
Hello. Yeah, this is Natra Jan. In Q3, industrial salt, sales was 758,000 metric ton and was 4.6,000 metric ton,
Sanjesh Jain
Okay. And what was the revenue?
Natarajan Ramamurthy
Revenue industrial salt was INR1491 million and was INR929 million.
Sanjesh Jain
Okay. And there was no sales from the SOP side in this quarter.
Natarajan Ramamurthy
Yeah, there is there was a sales 4.3 million is
Sanjesh Jain
Small and volume would be?
Natarajan Ramamurthy
So volume already given will 82 metric tons, 82 metric ton.
Sanjesh Jain
That’s very clear. Thank you. Now coming back to the bromine,, sir, you mentioned that you are looking at 20,000 to 25,000 metric ton, including captive. So how much do you expect captive will be required next year because we are looking at a gradual ramp-up both in clear brine fluid and PTA. And this year itself, I think in the elemental, we will be reaching what, 19,000 20,000 metric tons. So we are not looking at a significant jump-in the elemental as well.
Ranjit Pendurthi
So thank you, Sanjesh, for the question. I’ll probably have Mr Kanan, our Executive Director answer that question on how much captive we plan to use for next year, which is primarily in our downstream unit.
Kannan NR
Hi, Sanjesh, this is Kandan. Hi, sir. So currently, in this quarter our share for captive will be around 5 — around 5% to 7%, which will obviously grow next year — next full-year and this can exceed about 20% 25%. That’s the kind of numbers we are looking at.
Sanjesh Jain
So in that case, what we are looking in Elemental is not a material growth the Elemental. So what’s stopping us driving that elemental to a potential of 28,000 metric ton, which we were earlier aiming at?
Ranjit Pendurthi
I think we continue to give a conservative estimate because at this — we would like to ensure that we’re able to deliver, I think two quarters into the next year, we possibly will have a chance to review that number and see if we need to maintain it or upgrade it. But the improvements that we made in the last quarter and continue to make this quarter, I think we would like to start seeing those results before we know we promised more. But the fact is that we know what we would like to consume in the downstream unit and we know what we can produce at a minimum on the parent level. So in that combination, you know if you’re assume 25,000, so — and as Mr Kanan said, 20% to 25% gets consumed and if you back work, you do end-up at about 20 odd 1,000, which is what we are doing at the moment. We would like to be a little bit cautious than be aggressive and promise things.
Sanjesh Jain
But how is the demand outlook? I got that cautiousness, but when you talk to the customer, do you see next year a volume coming up in a normalized way? Or are you still seeing increased competition from ICA because they keep telling that they are pushing a lot more volume for them?
Ranjit Pendurthi
Yeah. So I think I’ll probably answer part of this question and then give it to Mr Kanan. So I think it’s good that ICL is pushing more volume, which means the market is healthy, right, and it’s ready to absorb. And so it only comes down to how much more we can make. As you know, we’ve never struggled with having to sell the bromine. So we continue to sell whatever it is that we make and our backlog also indicates that the offtake continues to remain healthy. And with the little price uptick that’s happening, I think that will also flow down to our bottom-line as well. On the demand-side, we are not seeing any of any sorts. And I think as we continue to build that customer-base as well, adding a few more customers, spreading the material down a little bit. This will also ensure in years to come, we have a more diversified customer-base. But maybe a little bit more insight into market, Mr Kanan can give because the domestic market is an important one here in bromine.
Kannan NR
Yeah, thank you. So basically, you know, the growth of ICL, if you look at from the different supplier share, it’s also likely that a decline from one supplier would have contributed to ICL’s growth. That’s also a possibility. But overall, the other dimension which includes — which impacts our demand, our supply is basically some sectoral variations. For example, the agrochem industry in the last quarter has not been very, very strong. But it has been maintaining its share not in a very aggressive way, but in a muted way that we are looking at as a revival is likely to happen maybe later in this quarter and definitely when we move into Q1 of next financial year, we see a revival and accordingly that where they are already present, that’s the sector space we are already present and we will grow in that. So overall, as Mr Randeep said, we — we are not really worried about the demand. There is a good demand and we will rise up to the requirements and meet those demand that we are confident of.
Sanjesh Jain
Got it. Got it. Next on the pricing of the bromine, I think rupee depreciation itself should add good 5%, 6% of the realization. When we say that we are looking at uptick in the realization, are we talking in dollar term or rupee term?
Kannan NR
So we are talking in rupee terms. Basically there are two factors. One, as you rightly said, there is a realization of increases, the depreciation of dollar has improved realization, but we also have some past contracts which are continuing. So it’s a combination of factor which has resulted in the rupee level gain for bromine, some past contracts at older price having a benefit of dollar depreciation and certain rupee transactions in Indian market, which have also been increased. So it has been a combination of both factors, which you see as final impact on the realization for bromine.
Sanjesh Jain
Got it. Got it. My next question is on the SOP and Orange side. SOP, Ranjesh sir, you said that you are looking to restart the client at a gradual ramp-up in volume possible. So next year, can we again touch the historical number of 20,000 metric ton what we used to do earlier? Is it possible to achieve that number consistently and grow because we are sitting on a very large capacity date? And on the Orain, I think you mentioned that you’re planning to start two plants this quarter and another two plant in next few months. Any outlook for FY ’26, the historical peak for Orain was almost INR400 crore, the commissioning of these four plants should be touching as a 50% revenue target, say, in FY ’25 — sorry, in FY ’26.
Ranjit Pendurthi
So I think on — on SOP, we are in the process of initiating the pilot runs and trials at site, basically moving it from lab where it’s been tested and the results are what we wanted. So that should happen. We are aiming to do it three monsoon because that’s the best time to test it. So if that does happen, then the ramp-up will start post-monsoon in the dry season. And we think we should be able to get some meaningful contribution from SOP. At the moment, I’m not very sure of committing a 20,000 tonne number. But yes, I think ideally that would be a reasonable number to expect, right? On oran — on oran itself, the two plants are basically products that go into again oil and gas drilling. They are almost ready. And I think the trials, etc., with customers have started and we’ll probably have clarity over that I think towards the end of March or beginning April, but we are conscious that we would like to start bringing in revenues from that unit. Our investment, of course remains low considering the other that we have. But at the same time, it — since July, effectively when we got position, et-cetera, it was almost, I think August, September. So in four, five months, we managed to get two plants up and ready. So I think we would start seeing meaningful revenues from there as well. I think over the next quarter, we’ll probably be able to be in a better position to commit more on what the exact numbers would look like.
Sanjesh Jain
That’s very clear. One last question. On the bromine derivative side, when we say that we are looking at a captive consumption of around INR4 odd INR1,000 crores of bromine, this implies that CBF and the PTA volume should be upwards of 10,000 metric ton? Yeah.
Ranjit Pendurthi
Yes, for sure.
Sanjesh Jain
Yeah. Yeah, that’s the right understanding, correct?
Ranjit Pendurthi
Yes. Sure. Yeah. Any update on the flame deterrent or it still remains in the pause? Yeah. No, we have restarted, I think the dialogue on transfer of technology on flame retardant. Given that I think we’ve always believed in that business being a natural extension of our derivative business. And I think we have — like I said, we started to work on that on paper and over the next few months, we’ll hopefully start working on-the-ground in that direction. And given that, of course, on the electronics side, there’s a lot of movement on FR products, it continues to be an attractive area for us as a bromine manufacturer.
Sanjesh Jain
Got it. And it will be with the long-term contract or just a technology transfer?
Ranjit Pendurthi
Yeah. Well, I think we would like to have more flexibility with pricing and not have to necessarily tie ourselves up into a buyback type of arrangement. So I think we’d like to see a product that’s technically qualified from an End-User perspective. And if we are to do any sort of long-term contracts, we’d like to probably do them with end-users and not intermediate players.
Sanjesh Jain
Got it. Got it. Super helpful, sir. Thanks for answering all those questions and best of luck for the coming quarters.
Ranjit Pendurthi
Thank you. Thank you.
Operator
Thank you. The next question is from Rohit Nagraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Yeah. Thanks for the opportunity. Sir, first question is again on the semiconductor initiatives. Do we have any project timelines for the same given that we have already done the groundbreaking ceremony, what could be the milestones that we would achieve over the next two to three years? Any basic timelines if you can share.
Ranjit Pendurthi
So I think we’re obviously very excited about the groundbreaking and I think it is definitely an important step-in our journey towards getting this project up and running. However, I think between groundbreaking and actually starting construction, there’s obviously a whole host of things that need to be in-place. One of the important ones is land, which again we already have and allotted. So I think that’s an important step as well. And then you move into the local permissions, et etc for construction and then start calling and reviewing tenders, bids, etc. So we are — we are evaluating working with a large firm for managing this as a PMO. And I think that will assist us in putting things together very quickly and having to maintain a lean team internally, but at the same time bringing better execution capability than what we may have internally. And I think these are the factors that we have taken into place over the next few months. So I think again, this is something possibly we’ll have a clearer and a better update for you in the next quarter. But between now and then, I think we are putting the pieces together in the background.
Rohit Nagraj
But would it safe to assume, I think we had earlier indicated that it will take about 24 to 36 months. Is that the timeline that we can expect from, say, early-January 2025?
Ranjit Pendurthi
No, I think once we put shovel to ground, I think it’s 24 to 13 months and not from January ’25.
Rohit Nagraj
So fair enough. But again, slightly delving into it, given that it’s a combination of projects with the government of Odisha. Does that not lead to faster approvals at least from the regulatory perspective that land has been given and the allied approvals. So I mean, is it safe to assume that those EC, etc., which takes usually anywhere between six months-to one year, should we probably will be able to get it faster than the normal process?
Ranjit Pendurthi
So I think we have great support from the Odisha government, which is why we’ve been able to get it up so — get it up and running in terms of approvals, etc., that we got so-far. And also the Government of India has also very strategic and important role to play in the semiconductor space. So I think it’s a combination of both their support that we will need to get this project you know, ready and commissioned. Yes, I think the fact that the government is 100% behind this project and has committed to helping us in any which way they can. It should help us in being able to navigate the approvals, et-cetera, at a quicker pace.
Rohit Nagraj
Sure. Just last clarification. So in terms of the products that we’ll be manufacturing here, it will be the acquisition that we have done on the classic wafer path. So the products and technology that we will be receiving from this investment. Those are the products which will be manufactured in 6M or there will be any additional things which could also come in.
Ranjit Pendurthi
So the investment in Classic is for the technology and the process know-how to make certain products. So that will be obviously used by 6M under the licensing royalty and consulting agreement. And in order in — for the products that we make at 6M, we will be solely responsible for what we wish to make and want to make. So that’s within our domain. We are not bound by an agreement as such with anyone. So I think that call we will take given the very large end-use for the products. So it’s a very vast area. So we’ll start working with industry on that front.
Rohit Nagraj
And the technology that we’ll be using here will be paying royalty for the same, but we don’t have restrictions in terms of using those technology products only in India so that we can have the global market as well. So is that the right?
Ranjit Pendurthi
So the technology is for a fab to be set-up in India, but the end-product can be sold anywhere.
Rohit Nagraj
Yeah. That was very helpful. Sir, a couple of questions on the legacy business. One is in terms of the salt volumes. So Q2, the volumes were impacted because of the cyclone. Why it has continued even in Q3? And if you can give just nine months volumes and revenue figures for all the premium products?
Natarajan Ramamurthy
Yeah, okay this is. I’ll give you the number up to nine months. Sales quantity of industrial salt is 2.2 million and bromine is 14,000. There is 2.2 million for the first-nine months, nine months right, and the revenue as well 4,140 million and for bromine. Bromine is 2,769 million,
Rohit Nagraj
Okay. And salt volumes, I mean, why there was impact again in Q3.
Ranjit Pendurthi
So I think this I had mentioned during my introduction — introductory comments. So I think we had some logistical challenges on the mobilization and transport, but I think that’s effectively what we’ve ironed out over the last month or so towards the end-of-the quarter. Having that done, you will see that the volumes pick-up this quarter and in the coming quarters?
Rohit Nagraj
Right. Just one last question. On the lease front, any new update that we have received from the government?
Ranjit Pendurthi
It’s, I think a work-in progress. I don’t have any fresh update as such, but I think we continue to await the approvals and we’ve just been, I think, told that it’s under progress.
Rohit Nagraj
And is there any similar incidents with you know, parallel may be companies or so where the approval has elongated for such a long-time?
Ranjit Pendurthi
In my knowledge again my update is few weeks old. I believe people are waiting or companies are waiting.
Rohit Nagraj
This is very helpful. Thanks a lot and all the best sir.
Operator
Thank you. Thank you. Before we take the next question, I request to participants to please limit your questions to two per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from Rushav Shah from RBS Investment Managers. Please go-ahead.
Rushabh G Shah
Hi, sir, good morning. Just on the FY ’26 direction on the revenue growth front, given that you’re anticipating pickup in the base business as well as the directive business coming on-stream. So can we expect double-digit kind of growth in revenues in FY ’26? Is that a reasonable assumption?
Ranjit Pendurthi
Sorry, you let, I can’t hear the question. Can you repeat?
Rushabh G Shah
Yeah, okay. So I just want to understand directionally from your end in terms of revenue growth for FY ’26, given that you are expecting pickup in base business as well as derivatives coming on-stream. So is the double-digit revenue growth kind of a reasonable assumption for FY ’26?
Ranjit Pendurthi
It is.
Rushabh G Shah
Okay. And secondly, sir, you mentioned that we may be eligible for the central government subsidy in the — under ISM. So what is the probability that we might get that subsidy or when can we know the revision of the government.
Ranjit Pendurthi
I think as a company I can only be very hopeful for the sake of all the stakeholders but I think do we have a very good application put in? Yes, we do. And I think it checks all the boxes. So now we have to leave it evaluate. And I think given the track-record they have shown in the last couple of years, I think they’ve been very sensible and very pragmatic in how they have approved projects. And I think they’re a very capable set of people and I think we’ll get the right evaluation done and we can only hope for the best.
Rushabh G Shah
And just last clarification from my end. We had pled certain shares of the company at the promoter group level. Just want to understand what is the use of the money and are we going to further pledge this holding in Airken Chemicals?
Ranjit Pendurthi
I think the pledge that happens is not necessarily connected to Chemicals or the business on Chemicals at a promoter level. So I think on and off, there is some amount of funding required, which is what the pledge serves as. But we don’t anticipate any big movements in pledge. So I think we are — at the moment, we are about 3%. So I anticipate we should not be crossing more than 5% now are in the near-future.
Rushabh G Shah
Okay, sir. Thank you. All the best. Thank you.
Operator
Thank you. Next question is from Shishti Jain from Monarch AIF. Please go-ahead.
Srishti Jain
Thank you for the opportunity. Sir, with respect to the INR3,000 crore investment in the semiconductor facility, will the investment X subsidiary — X subsidy, whatever it may be shared between us and the partner considering it’s a 70% holding subsidiary.
Ranjit Pendurthi
Yes, we hold 70% in the subsidiary and there’s a co-founder with us a gentleman with the background and know-how of the semiconductor business. So what was the question again, Madam?
Srishti Jain
So will this investment be shared between us? So is he just the technology provider or yeah?
Ranjit Pendurthi
No, I think he is operating partner shareholder. So he is the Managing Director of the company. So the investment will be from our side.
Srishti Jain
Okay. Understood. And sir, there are, you know, the state wants to attract a lot of companies. So we’re expecting a lot of companies to set-up shop in the semiconductor space. So what — what we think is the right of and are we expecting more tie-ups like
Ranjit Pendurthi
I mean, I can give you a generic answer because I don’t know the strategy of real state, but obviously, each state runs their own invest in so-and-so state programs, which I think is great for the country as a whole. The more investments come in, more jobs, the economy moves, there’s a multiplier effect. We create higher paying jobs, we develop skill-sets in areas that we don’t have today, institutes get to play a role in it, premier, local, etc. So I think as an ecosystem, I think it’s a great thing. I think one can’t be afraid of competition because even if you’re novel today in the business you do tomorrow, somebody may set it up and compete with you. So I think each one has their own strategy in how to address the market and similar to what we have, right? So there is a certain capability that we have. There’s a certain faith we have in the business. There’s a certain belief we have in the future of the business. And then like I said earlier, when we measure the risk-reward metrics, you know, we take a call that is a good place to put money into and then we move forward. So I think to answer your question, I think it’s good if more investments come in because you have a larger talent of people, resources available to carry-on the business.
Srishti Jain
Sure, sir. But are we also looking at more tie-ups or in terms of technological or any other way?
Ranjit Pendurthi
At the moment, I don’t think we need any more tie-ups. I think we got the most important one, which is the process know-how for the compound semiconductor. And I think with our equity investment also in the parent — in the company that’s giving us that, I think it gives us a very sound firm footing. And I think as I said in the commentary, this makes us unique in our position in India. We probably — irrespective of the size we are, I think we’re the only ones who ventured and made an investment in a compound semiconductor fab overseas. Albeit small, but the size is not the important thing. The process and know-how and the capability of the company we’ve invested in, that’s the most important thing in the semiconductor business.
Srishti Jain
Understood, sir. And sir, one last question on Energy Labs. So the two-year roadmap that we have is for the filing plan to set-up in UK, right? Yes. And post this, we will think about a factory, if at all required in India.
Ranjit Pendurthi
Yes, definitely. I think that business also, obviously the growth potential is pretty large. The market is large, especially for stationary storage systems and energy storage, I think that’s a growing market. The fact that it ties in with our bromine business through zinc bromide technology, I think helps us on both fronts. One, for our own business of bromine as well as secondly getting into a high-growth space with very sound battery technology that remains under control and can be produced without having to depend too much or maybe if anything — nothing at all on imported parts or components.
Srishti Jain
Sure, sir. Do we expect in the near-term any additional capital commitment here?
Ranjit Pendurthi
I think in the near-term, in the next six months-to year, I don’t think we have any big capital commitments maybe towards these two projects, not necessarily off-grid, but semiconductor, maybe things related to groundwork, civil, et, some advances on equipment and all those things. But beyond that, we don’t have any large capex is planned at the moment.
Srishti Jain
Thanks a lot. Thank you.
Operator
Thank you. A reminder to participants to please limit your questions to two per participant. Next question is from Chetan Joshi from Tulsi Capital. Please go-ahead.
Chetan Joshi
Yeah. Thank you for giving me an opportunity. My first question is that in June ’24, I think that was the lowest quarterly sales which we have done in the last 2.5 years, three years. So can we expect that, that will be the lowest and from here, we will see improvements and try to achieve the figures which we are doing early as ’21, ’22 or ’22, ’23. And which project? Second question is which project, the battery one or the semiconductor one, which will go on-screen first?
Ranjit Pendurthi
I heard the second question clearly, but the first one was a bit muffled. So I will answer the second. Sure, you can repeat. Yeah.
Chetan Joshi
See, in June ’24, we — that was the lowest which we achieved for June quarter ’24 in last 10 years. Now can we expect that is the bottom which we were — which was there and from year onwards the benchmark will be that definitely there will be improvement in the sales in coming quarters after the addition of these two new units which we have bought.
Ranjit Pendurthi
So I think the June 24 quarter I mean apologies. I don’t have a figure right away in front of me because it’s six months old but anyhow I think, going by your question, yes, I think we don’t anticipate to be hitting anywhere near that number you know in the coming quarters. Like I said, I think our volumes are picked-up over the last couple of months and we’ll continue to do so on both bromine and salt. And I think we will continue to endeavor to improve those volumes. So the second part of your question, I think which will come first, I think you’re talking about 24 to 13 months. However, the second one, the off-grid energy is first going to be commissioned in the pilot plant stage, which itself is maybe 18 months ’24. So in all probability, we would anticipate that the semiconductor project would come up first from a commercial revenue generation perspective.
Operator
Thank you very much. Due to time constraints, we’ll take that as the last question. I would now like to hand the conference over to Mr Ranjit for closing comments.
Ranjit Pendurthi
Thank you, everyone, for joining us on this earnings call today. We appreciate your time and showing interest in our company. We understand things are challenging, the market on the chemical industry side is challenging. However, I think we are holding our ground and I think your company continues to be resilient to-market forces and we continue to see improvements on-the-ground and we are firmly behind our commitment to keep it going. And our investments that we are making also will create we believe longer-term value and that’s the vision we have. And we would like to look beyond a quarter or two. I think the company has been set-up in a way that it will deliver value in the immediate term as well as in the longer-term and our investments will pay-off. So however, in case of any queries, please feel free-to get-in touch with us or SGA, our Investor Relations Advisors. And thank you once again, and we look-forward to meeting all of you over the next call. Have a good day.
Operator
Thank you much. On behalf of Arcade Chemical Industries Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.