Archean Chemical Industries Limited (NSE: ACI) Q4 2025 Earnings Call dated May. 07, 2025
Corporate Participants:
Ranjit Pendurthi — Managing director
Natarajan Ramamurthy — Chief Financial officer
Analysts:
Sanjesh Jain — Analyst
Aditya Khetan — Analyst
Archit Joshi — Analyst
Resham Jain — Analyst
Krishan Parwani — Analyst
Rohit Nagaraj — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Arken Chemical Industries Limited Q4 and FY ’25 Earnings 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 this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Ranjit, Managing Director. Thank you, and over to you, sir.
Ranjit Pendurthi — Managing director
Thank you thank you. Good morning, everyone. A warm welcome to all of you joining our Q4 and FY ’25 earnings call. It is a active morning, so thank you for making the time to be with us today. On this call, I have the pleasure of being joined by our Executive Director, Mr NR Kanan; our CFO, Mr Natrajan Ram Murti; and the SGA team, our Investor Relations Advisors. Thank you I trust you have reviewed the financial results and investor presentation available on our website as well as the stock exchanges. I will begin with an overview of recent developments and business updates, after which our CFO, Mr Natrajan, will present the financial performance for Q4 and full-year ’25.
To start with the market overview, the Indian chemical market continues to stand strong on the basis of innovation and diversity with over 80,000 commercial products across various sectors. The year gone by has posed several challenges for the industry at large, particularly to demand variations from key global markets as in the West as well as Far East. However, amid these global headwinds, Indian chemical manufacturers and have proven to be resilient and have demonstrated strength and adaptability. Along with many of our peer group companies such as Arkin Chemicals has also managed to withstand the pressures and has improved its operational performance. This resilience underscores our strong foundation and agility in navigating a dynamic global environment.
On a broader scale, we are beginning to see some signs of recovery in the global chemical industry. However, every day is a new challenge from a geopolitical perspective. Improving demand trends and more stable supply chains are helping a cautious optimism. While the recovery may remain uneven across geographies and sectors, the overall momentum for us is gradually building.
At Chemicals, we are seeing clear and consistent traction in client demand for our key products, which proves to be an encouraging sign and that is reflected in our Q4 FY ’25 performance as well. This reinforces our belief that sustainable growth is rooted in long-term thinking, strategic agility and operational excellence along with strong consumer and customer relationships. Coming to our segmental performance specifically, we’ll start with bromine. Elemental bromine contributed approximately one-third of our total revenue during FY ’25. We continue to focus on bromine, which is our strength, and we continue to remain India’s largest exporter and manufacturer.
Contracted volumes remain broadly in-line with the prior year. For FY ’26, we are targeting an increase in the total bromine volumes, including captive consumption in the range of 22,000 to 25,000 tonnes for FY ’26. Industrial salt, international salt, again, we are the largest exporter from India and have been so for many years. This accounted for almost two-thirds of our total revenue. We saw a solid recovery in Q4 with volumes reaching 1.3 million tonnes for the quarter. Operational challenges from earlier quarters, primarily around logistics have been largely addressed.
We have added our own fleet help augment the logistics and with the commissioning of our additional washery and investment in the dedicated logistics fleet, we’ve expanded our capacity to over 5 million tonnes on an annual basis and we expect the quarterly volume run-rate to remain above 1 million in the coming quarters. And this is also aided by the fact that our long-term relationships with customers will allow us to have longer-term contracts and these remain in-force.
Sulfate of Potash, the trials are continuing steadily and continue to be very promising. We have completed most of the trials and the test phase and at the pilot phase and we are moving to demonstrate this at the plant scale in the next quarter. We anticipate meaningful contributions as I have stated on earlier calls from this vertical starting in second-half of FY ’26. We remain one of the few manufacturers of sulfate or potash in the world and it is a fertilizer that is not easily made elsewhere and we believe the market continues to remain firm for this product.
Bromine derivatives, our bromine derivatives operations are up and running, currently between 20% and 30% capacity utilization clear brand fluids and catalysts for purified acid PTA synthesis contributed to Q4 FY ’25 performance. We obviously expect the utilization to rise to more than 50% in the near-term. The products have been well-received and we have started exports of the same from the facility. Regarding the flame retardant bromine project, this initiative is being actively now pursued and we will provide an update soon once we finalize the key arrangements at our end.
To date, we have invested approximately INR160 crores to INR170 crores in the bromine derivatives platform, and this has started yielding results both on the top-line and on the utilization rates. On ore and hydrocarbon, this is the business as you all may recall, we bought in 2024 and we have made progress in reviving ore and hydrocarbon’s operations of the four units, the two facilities in Andhra Pradesh are now ready, while the two remaining units in Gujarat and one in Tamil Nadu are likely to commence operations towards the latter part of FY ’26.
But having said that, we continue to remain focused on the two that are going to get operational soon and start contributing revenues shortly. Debottlenecking and refurbishment work has been going on all sites. We expect ore and hydrocarbon to contribute approximately INR150 crores in revenue during FY ’26 on a conservative basis.
On our new strategic initiatives, as you all may be updated, we have — we have made investments in two areas for the future, keeping eye on the development across the industry, both from a domestic perspective as well as from a global perspective. And the semiconductor manufacturing initiative, the land acquisition Process for the project has been completed. The company is now working closely with both state and central government officials. As previously communicated, we have submitted our application to the Indian semiconductor mission and are awaiting approval. The project has been approved at the state-level in Orissa and now we are waiting for the final approval to come from the center. On the energy storage battery business, the zinc bromide batteries specifically, the company’s planned investment in Energy Labs, a U.S.-based zinc bromide battery innovator is progressing well. The Offgrid team is currently advancing site identification and vendor selection for the pilot plant in the UK and we hope in the coming quarter this will be finalized and the start-up will have begun. In summary, the company has maintained margins, expanded customer engagements and advanced strategic initiatives in both the bromine derivatives business, semiconductors and the energy storage business. We remain a net debt-free company, supported by a strong balance sheet and disciplined capital allocation, which positions us well to pursue long-term growth opportunities. The key being for us to be vigilant, agile and be conservative in how we use our cash, but at the same time, pursue opportunities that provide long-term growth for the company and for the shareholders. With that, I would now like to invite our CFO, Mr Natrajan Ramuti, to provide the financial highlights for Q4 and FY ’25. Thank you.
Natarajan Ramamurthy — Chief Financial officer
Thank you and a very good — very good morning to all the participants on the call. We are pleased to report notable performance for the quarter gone by. To give you a summary of Q4 FY 2025 on standalone basis, total revenue for Q4 FY ’25 stood at INR3,33.3 million. Our business mix are as follows in Q4, bromine contributed 24% of the total revenue, whereas industrial salt contributes around 76%. Sales volume of business are as follows.
Volume sales of bromine for the quarter-four 2025 stood at near 3,600 metric ton. Volume sales of industrial salt for the Q4 FY ’25 stood at INR1.3 million. EBITDA for the company stood at INR1,11.2 million in Q4 FY ’25 with a margin of 30.3%. Increase in other expenses during the quarter was largely due to increase in operating expenses due to increase in salt quantity by 55% and year-end provisions. Net profit for Q4 FY ’25 stood at around INR583 million.
Now on FY ’25 highlights, total revenue for FY ’25 stood at INR10,634.5 million. Our business mix are as follows: bromine contributed 35%, whereas industrial salt contributes around 65%. The export market contributed around 77% and the balanced 23% were contributed by the domestic market. Volume sales of for the FY ’25 stood at near 18,000 metric tons. Volume sales of industrial salt for the FY ’25 stood at 3.5 million metric ton. EBITDA for the FY ’25 stood at INR3,721.2 million with a margin of 35%. Reduction in employee cost was driven by ESOP utilization and the MD commission compared to last year.
Net profit for FY ’25 stood at around 1,849.2 million. Net-debt to equity stood at 0103 level. We are delighted to share that the Board of Directors have recommended a final dividend of INR3 per equity share of INR2 each for the financial year ending, 31, 2025. With this, we conclude the speech and open the floor for Q1 game. 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 star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.The first question is from the line of Sanjesh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah, good morning, sir. Thanks for taking my question. Sorry, it’s a reputation. I know you said this earlier in your opening remarks, but still can you give me this quarterly or revenue breakup between salt and bromine and bromine SOP?
Natarajan Ramamurthy
Yeah, sure. Okay. In Q4 FY ’25, a sales metric ton industrial sort was cages, bromine 3,604 metric ton, SOP 26 metric tons, 26 revenue. Revenue industrial salt is INR245.4 crore, bromine INR76.25 crore, SOP was INR0.09 crores, total INR321.74 crores.
Sanjesh Jain
Got it. Got it. Now what was the derivative? Because I guess there is a decent derivative sale even in this quarter, if I do consol minus standalone, almost INR24 crores of derivative sales that should be assumed. So what is the derivative volume we sold during this quarter?
Ranjit Pendurthi
So do you — so Sanjesh, good morning. This is Ranjit here.
Sanjesh Jain
Hi, sir.
Ranjit Pendurthi
Good morning. Hi. So yes, you’re right. We did start derivative sales this quarter, which is why I think I mentioned that we are quite well-placed in the coming year. So we sold about close to 500 tons of product for the first-quarter, okay, first-quarter as in of the operation, commercial sales as in FY ’25 Q4.
Sanjesh Jain
Okay.
Ranjit Pendurthi
So we did sell about 500 metric tons.
Sanjesh Jain
So that’s a great start actually. 500 even at this rate, we are talking about 6,000 metric ton already, right?
Ranjit Pendurthi
Yes.
Sanjesh Jain
So we guided 10,000 metric tons for FY’26 in the previous call, that still stands or do you think there is an upside risk to that?
Ranjit Pendurthi
Yeah. Sorry, Sanjesh, can you repeat the question?
Sanjesh Jain
You mentioned that for FY ’26 in the previous call, we are looking at derivative sale of 10,000 metric ton. So with this 500 oddled already being sold-in Q4, do you think that 10,000 can be surpassed easily?
Ranjit Pendurthi
I think, you know, when we discussed this the last-time on the call, I think we were having that projection and I think that’s what we’d like to target. But we also have to see with a lot of changes having happened on the geopolitical side, for example, I think I — I mean you know this more than anyone else, how the oil prices have come down from 70-odd to now 560 odd. But having said that, I think the silver lining remains that the producers have increased the output which means that the more they supply the more they will need chemicals for the more they drill.
So I think that’s I think one green shoot that we see that will support demand and offtake. And the second one is also, I think with all that’s going on in US, there may be other opportunities also that may open up for supplies, right? But on a volume basis, I think not — it’s not incorrect to say that is it achievable or not? It is probably achievable. Very clear. But we’d like to see performance happen over the next couple of quarters and stabilize.
Sanjesh Jain
Got it. Next question on the bromine, 3,600 metric ton with prices are going so sharply, I thought it is more demand-led right rather than the supply led. The volume metric ton really is not encouraging for the Q4. Are we facing any capacity constraint or how it is?
Ranjit Pendurthi
No, actually, I mean, we’ve always been in this position with bromine that the demand exceeds what we’re able to supply for our own customers. But the reality has been that had an extended, I think, winter. So what’s happened in January and February February, generally Q4 is our traditionally our strongest quarter for bromine also. But this year with evaporation rates staying subdued because of the extended winter, Jan-Feb, that caused a lower concentration. But I think you would see the pickup happen through March. And as we are speaking, I think it’s gone to a pretty healthy rate beyond what we actually budgeted as well.
Sanjesh Jain
But we can also take whatever
Ranjit Pendurthi
We are able to make, we’re able to sell.
Sanjesh Jain
So, but from the offtake perspective, I thought we have a lot of ponds which can be developed to meet this offtake. Practically speaking, what is the capacity which we can drive bromine out-of-the ponds which we have developed and the water resources we have?
Ranjit Pendurthi
And the infrastructure that we have, we can go in excess of 30,000
Sanjesh Jain
That can be enhanced or that is where we will fit the peak.
Ranjit Pendurthi
No, that can be enhanced. So I think we still have area to be developed. We still have brine efficiency management in the fields, that’s an ongoing process. So I think those improvements are being done as we speak. So in terms of our of our ability to do more does exist with not large expenditure.
Sanjesh Jain
Very clear. Just last question, any comment on the bromine pricing?
Ranjit Pendurthi
Well,, think I think the climb was steep. I think as the market may know, in a matter of I think a month the prices almost jumped 70%, but also like everything else, you know, it comes down and we’ve always held a conservative view. You know this on what the bromine pricing will be from a long-term average perspective. But at the moment, it is higher than it was last couple of quarters.
Sanjesh Jain
The long-term contracts we signed, they don’t change, right?
Ranjit Pendurthi
So they don’t change because I think our reputation is what people come to us for. They expect us to honor contracts and because it works both ways, we expect our customers to also honor contracts. So despite all that’s been going on, the turbulence worldwide, our customers continue to honor their contracts as well. So for whatever they signed. So I think our customer engagement is very strong given our track-record and history of working with them.
Sanjesh Jain
Very clear. Thanks for answering all those questions and best of luck for the coming quarters.
Ranjit Pendurthi
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Thank you. Next question is from the line of Adityak Hathan from Smith Institutional Equities. Please go-ahead.
Aditya Khetan
Yeah, thank you for the opportunity. Sir, my first question is, sir, for the next two years, like we had seen like so major geographies, whether it is US, China, Japan, UK, everywhere the growth is slowing down. And I believe sir, what guidance you have given for bromine in terms of volumes, that is surpassing 25 volumes, I mean onto the growth part. So what is giving us the confidence that this stronger growth can be achieved? And any outlook or any sort of volumes you can share of — so for the salt business in FY ’26?
Natarajan Ramamurthy
So thank you for the question. So I think the reason why we feel that bromine is well-placed is because there are only a handful of manufacturers that who do produce bromine. And the fact that we are one of the largest on a global basis as well, I think our customers come from a range of industries, right? We are not focused on any one end-use. So we have flame retardant importers, we have ag-chem, we have pharma. So that diversification of industrial base allows us to be confident of being able to move the volume.
Aditya Khetan
But sir, we are talking of a growth of upwards of around 20% to 25% in terms of volumes.
Natarajan Ramamurthy
Yeah. So I think that’s based on the contracts that we have and the visibility we have with these customers. Like I said, these are products that are needed, there is no substitute for them. So it’s not that because you know the price has changed that somebody can swap out for some other input. So I think there is a base demand for it and that base demand is still not being met. So I think that difference will allow us to keep moving a little bit more volume than we did this year for sure.
Aditya Khetan
Got it. Sir, the spot pricing which has moved from $3 to $5 in a span of weeks only, any particular reason? And is the price so volatile like it can move from $3 to $5 in a week’s time only and it can again come down to the same level. I believe — so what is the reason for this movement?
Ranjit Pendurthi
I think you know market participants and shareholders understand that supply shocks generally only lead to such a rapid increase in price, right? So I think there been from West Asia. And I think that caused a spike. But on our conversations with customers and as well as we ourselves as a company knew that this spike won’t last. So I think trying to plan on the basis of a spike is not, I think realistic. So we need to keep our head-down, understand the long-term trends, end-use industry trends, induce industry prices and then accordingly model ourselves into what prices we expect.
So for the current prices that we’re doing, we’re happy. I think customers didn’t — our customers appreciate that we didn’t try to take advantage of this temporary spike. We honor our contracts and I think that’s what keeps our customers coming back to us. Just to give you an insight, most of our bromine customers are more than 10 years-old, right? So they don’t expect us to sway as the wind goes.
Aditya Khetan
Got it. Sir, just one last question. Sir, our — in Q4, the business mix has tilted more towards the salt side. I believe from 50-odd percent so revenue mix. Now it is around 65%. Sir, considering salt is more of a low entry barrier business, it doesn’t have any sort of an hedge. How you see this mix moving ahead? Will bromine a mix move-up or it will remain in this direction only?
Ranjit Pendurthi
So I think as a — see, we have to see the business holistically, while we are a specialty chemicals company with bromine and bromine derivatives are key products and key focus areas, right? Salt also is an important product. So we don’t fancy one over the other. I think the first fundamental thing is both make money. Do both have a good healthy contribution to the effort and the business bottom-line, both do it.
So I think I’m not going to choose one or the other, but at the same time, I will add this, our intention is to keep growing the bromine and bromine derivative business because we see the future there and the distinction between us and many others coming from that strength. Salt will continue to be a product that we continue to sell because it is a large-volume mover and has a healthy contribution. So I think it will be an all-round performance, but our focus will continue to be on the bromine and bromine derivatives.
Aditya Khetan
Got it. Thank you.
Operator
Thank you. Next question is from the line of Archit Joshi from Nuvama Institutional Equities. Please go-ahead.
Archit Joshi
Good morning, sir. Thanks a lot for the opportunity. Sir, first question again harping a little bit on the bromine pricing. I believe a lot of our contracts have different time-frames that we operate in, but would it be conceivable that the new contracts that will be repriced, let’s say, three, six, nine months down the line would be at a higher price where I’m — where I’m getting from is just to get a sense of how should we look at pricing of bromine in FY ’26.
Ranjit Pendurthi
So I think there are two-parts to this, Archit. One is that today, I think we are amongst the few companies where we don’t have a demand problem. So I think we should be fortunate for that. So the prices at the contracts we have signed, people are still buying and wanting. So I think that’s a good thing. So which is why I keep saying our demand at the moment continues to be stable.
The second one is on — in future pricing, I think given all that’s happening, right, it is very dynamic. I think it would be hazarding too much of a guess what’s going to happen in six months’ time or nine months’ time. But having said that, I think the contracts that we had signed towards, I think Q3 or Q4 or Q3 last year or Q2, Q3 last year, I don’t personally See the prices being below that, and I think this is the observation we made last year saying that someone asked us have the price hit bottom? I said, I don’t know if they’ve hit bottom, but there — I think there is no reason to think that they will fall any further. So similarly, I think there’s no reason to think that the prices will fall when the renewal time comes. But at the same time, is there an upside? I think there is an upside. But most of that upside, we would like to capture it through our derivatives business, not necessarily on the elemental bromine business.
Archit Joshi
Sure, sir. That clarifies. Sir, second question again, like you mentioned on derivatives, I think when we had planned this entire project of whatever investment we have done till now, INR160 crore INR70 crores that you mentioned earlier, we were supposed to have a good 20 odd percent value addition on the derivative space. I think a large part of it could have been driven by retardants because that typically had a more demand visibility and I think we stalled it, but would those economics still stand through here even without flame retardants as we speak because we’re doing about 500 tons like I mentioned before. So any thoughts on that?
Ranjit Pendurthi
So I think our focus today is on ramping-up the utilization of the plants. So I think once that happens, obviously margins do move-up for this year, I think assuming a 20% margin would not necessarily be too true simply because the investment has to start paying-off and the utilization has to move-up. But going-forward, I think, you know, the margin that we have stated earlier is possible to achieve, right? And as we also change the product mix and as we keep moving between various industries, not just oil and gas, right?
So I think our R&D team has done a great job. We have a few interesting products lined-up coming up over the next two, three months. And so I think this will make us as a unique manufacturer of some of these products for end-use industries in pharma and.
Archit Joshi
Sure, sir. One quick last one. As we plan to resurrect the flavor capacity once again, anything with regards to timelines as to when that plant will be operational and since we have already spent INR160 crore 70 crores. I’m assuming that there’ll be common infrastructure, etc., involved in that already. So what will be the incremental capex outgo there?
Natarajan Ramamurthy
So I think our overall project cost for the bromine derivative business was INR250 odd crores. So at the moment, we are — this Phase-1 and Phase-2 included. So I think at the moment, the first phase has been completed under budget. So kudos to the team for doing that. But the additional capex should happen within that same 251 give or take a little bit given the inflation, et-cetera on certain things. But yeah, a large part of the infrastructure is already in-place.
Archit Joshi
Incremental INR250 crores or incremental INR1,900 crores? I didn’t get that much.
Natarajan Ramamurthy
No. The total Phase-1 and Phase-2 including flame retardant was INR250, of which INR160 to INR170 has been spent. So the bank is 90 — 80 to 90 that’s available will be what will be used for the flame retardant project. So it’s well within what we had estimated earlier.
Archit Joshi
Sure. Yeah. Certain timelines with regards to the commissioning of the project, anything that you could provide?
Natarajan Ramamurthy
We probably will have a better update on the next call. Hopefully, we would have made some progress, so there’ll be something more meaningful to convey. But ideally, we would like to see if we can do it within this FY ’26.
Archit Joshi
Sure, sir. That’s great. Thanks and all the best.
Ranjit Pendurthi
Thanks.
Operator
Thank you. Next question is from the line of Resham Jain from DSP Asset Managers. Please go-ahead.
Resham Jain
Hi, good morning, Mr Ranjit. So my question is with respect to the bromine prices. So one is your long-term contracts, if I’m not wrong, is largely for the export markets and domestic you have certain open contracts as well. Is that correct? And how does your pricing change in the light of this mix?
Ranjit Pendurthi
So morning, Resham. Thanks for the question. So you’re right, a large — the contracts for a longer-term tenure and price is for the export market. So that continues. On the domestic side, we have a combination of those that are basically quantity-based or period-based for a certain quantity. And so I think those where and when and where those have finished in the last couple of months, we have renewed them at better prices and so that is on a rolling basis on the domestic side. So we are seeing no issue on the offtake and we are benefiting from an uptick in price on the domestic side.
Resham Jain
Okay. Understood. Got it. And the other thing is in your initial remarks, you mentioned that next year you are budgeting for 22,000 tonnes of bromine is it production or is it sales because you’ll be consuming a bit of in — for in-house as well?
Ranjit Pendurthi
Yeah. So I think it is sales.
Resham Jain
Okay. So 22,000 plus, you will consume whatever bromine derivative you will manufacture, you will you will use consume there as well. That will be how much quantum approximately.
Ranjit Pendurthi
So we are looking at, you know, like the reason I said in my initial comments between 22,000 to 25,000 tons was sales. So in that between ’22 and ’25, we anticipate that extra quantity will come from our captive consumption.
Resham Jain
Okay. Understood. Okay. Lastly, if you can help us with the bromine derivative realization for — I presume there will be different kind of products, but on an average if you can just help with the realization of bromine derivatives?
Ranjit Pendurthi
Yes give us give us a second here so Resham, I think we probably have to get back to you on that, if you don’t mind. MR. No problem, our CFO will reach-out to you because — because like you said, we are doing multiple products and some have a recycled component to it. So I don’t want to give you an answer that’s incorrect, but that data will be given to you post the call. No worries. Okay.
Resham Jain
Because based on the data you have given 500 tonnes and INR24 crore revenue, it comes out to INR480 per kg. I don’t know whether that is correct or not.
Ranjit Pendurthi
No, that’s — yeah, that’s why I think we should be careful. It’s a product mix. But definitely, we’re not selling anything that low. We are making money for sure.
Resham Jain
Okay. Perfect. Thank you and all the best.
Ranjit Pendurthi
Thank you.
Operator
Thank you. Next question is from the line of Krishn Parwani from JM Financial. Please go-ahead.
Krishan Parwani
Yes, hi, sir. Thank you for taking my question. Couple from my side. First, your salt sales volume guidance for FY ’26 is north of 4 million tonnes and-or what is this exactly?
Natarajan Ramamurthy
Yes. Thank you, Krishn. So I think our volume, we expect in excess of 4 million.
Krishan Parwani
Okay. So any assume, it’s like more closer to 5 million or 4.5 or what is it? Because given you have already done 1.3. Yeah.
Ranjit Pendurthi
Yeah. So the completion of our washery, the second-line has added the capacity and as I said, it has taken us to 5 million tonnes plus an annual basis. So ideally, we should be able to use as much of that as possible. So I would say, you know between 4.5 million to 5 million.
Krishan Parwani
Got it. And secondly on the bromine price, I know you’ve answered quite a lot, but just you know, during the last upcycle, we saw your peak bromine realizations for $4.7 a kg even when the spot price was $10, $12 a kg. So let’s say, what’s the peak realization you think you can get if prices or spot prices sustain at $4 or?
Natarajan Ramamurthy
I think if spot prices stay at $4, our endeavor would be to be as close as possible to that. You’re obviously not going to get the spot price for a long-term contract naturally. Those are all for people who want to just do a month’s export and just get some benefit out of it. But long-term, generally, If we take the hypothetical situation of $4 spot, I would assume long-term contract will be between 3.25 to 3.4.5 because there is a local duty element in China and all those things.
Krishan Parwani
Got it. So probably at a 20% discount roughly, give or take.
Ranjit Pendurthi
So spot price, yeah, I would assume that would be a safe thing to assume and then build your business around that.
Krishan Parwani
Got it. And just last two bits. So what’s your capex plan for F ’26 and ’27 considering investments for and?
Ranjit Pendurthi
So we’ll revert back on that. But I think on salt, we don’t have any outside capex other than just regular maintenance. On bromine derivatives, like I said a few minutes earlier, if we do the flame as we plan to, it will be within that original budget capex of. So there’s no new capex as such from that perspective. And on the off-grid this year, apart from the investment, we don’t have any CapEx. And on the semiconductor project, I think any meaningful capex cut only next year. I think for this year, probably we may have INR50 crore INR60 crores at best.
And we, of course, the only — I think one that really is focusing on pure capex is the SOP plant, startup where we do obviously get the immediate revenue and cash-flow and sales. So I think will happen between now and September, October that we estimate about INR20 crore to INR30 crores. And what about the Orange capex is as such? Is already underway. So we don’t — again, it’s within the original budget we given last year of about INR25 crore INR30 odd crores. So we don’t have any large capex is planned outside of these. But to be more accurate or I think Mr Natrajan will get back to you on that.
Krishan Parwani
Okay, got it. And last bit, if I may. So when do you expect, let’s say derivative business to be profitable on the PAT front?
Ranjit Pendurthi
On PAT.
Krishan Parwani
Because I think there is a consultant standalone is about INR5 crore of loss, right?
Natarajan Ramamurthy
Yes. So I think on a PAT basis, definitely we want to see a positive figure this year for sure.
Krishan Parwani
Okay. Got it. Thank you for answering my questions. I wish you all the best.
Natarajan Ramamurthy
Thank you.
Operator
Thank you. Next question is from the line of Rohit Nagaraj from B&K Securities. Please go-ahead.
Rohit Nagaraj
Thanks for the opportunity. Sir, first question is on Orient hydrocarbons. What is the total capex, including the acquisition cost that we are looking at? And you already mentioned that this year we are expecting about INR150 crores of revenues from this asset. What is the peak potential that we are looking at from the current investments that we are making or we have made? Thank you.
Natarajan Ramamurthy
Thank you for the question. So I think we bought the asset for about INR77-odd crores. And I think since then we have spent about INR10 odd crores on the refurbishments. As you know, these were running plants and — but the last four years they were shut. So. So it did take that — it took more time than actual real capex simply because we had to go in there post the NCLT orders and all that and you know, look at what’s not working and lot of those things, long-lead items, etc. So, yeah, so that’s all we have spent for the moment. Out-of-the INR25 crore INR30 crores we had budgeted when we had bought the asset itself.
And I think peak revenues before the company had got into trouble. I think they had touched almost close to INR500 crore in top-line when they still didn’t have, I think a couple of the plants operational. So as a business, there’s a lot of potential there and I think we are slowly climbing that wall. And to start with that INR150-odd crore, I think estimate we have given is on that basis.
Rohit Nagaraj
This is helpful. Sir, second question is on the industrial salt. So generally, how has been the trend in terms of pricing of industrial salt? And do we expect at least say inflation-adjusted price increase in salt or what is your estimate for maybe a couple of years from now on.
Ranjit Pendurthi
I think a couple of years projection or prediction I think is very, very I think difficult. I think most industries are not able to predict what’s going to happen next quarter. So I think I won’t hazard a guess for two years for sure. But all that I can add and say is that, as you see, our volume again is back up over 1 million tons. I think the first objective is to touch what we have projected with the enhanced capacity for this year.
That I think at the contribution levels of what we got in Q4 and hopefully that continuing, the focus will be on moving that volume and having a tight cost-control to ensure that the contribution level stays thereabouts what we accomplished in Q4. So I think if that is achieved, I think we would have added a significant top-line and bottom-line from the volume.
Rohit Nagaraj
Yeah. Sure. Just one clarification. I mean, generally the salt prices do increase or they have been largely stable and there is marginal increase which happens?
Ranjit Pendurthi
They have largely been stable. There is, I think maybe a drop of 5%, 10%. But I think, like I said, I think the volume far more than makes up for that. And I think we are not overly concerned on our ability to be able to move to that 5 million mark for this year.
Rohit Nagaraj
Got it. Just one last clarification on the lease, any incremental update?
Ranjit Pendurthi
On that, I think it is continues to be a work-in progress. We are making headway. I think we are in touch with the authorities and they were assured that they will move on this quickly because I think they have received a larger number of representations from many others on the same subject.
Rohit Nagaraj
Thanks and all the best, sir.
Ranjit Pendurthi
Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments.
Ranjit Pendurthi
Thank you. So thank you everyone for joining us on this earnings call. We appreciate your time and showing interest in our company. In case of queries, you can get-in touch with us or SGA, our Investor Relations Advisors. We look-forward to again meeting all of you over the next call. And meanwhile, be safe and.
Operator
On behalf of Chemical Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines