Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Carborundum Universal Limited (NSE: CARBORUNIV) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Chandra Mouli — HR & IR
Sridharan Rangarajan — Managing Director
Analysts:
Harshit Patel — Analyst
Jonas Bhutta — Analyst
Ravi Swaminathan — Analyst
Pravesh Kocher — Analyst
Unidentified Participant
Chintan — Analyst
Akshay Thakur — Analyst
Sejal Kapoor — Analyst
Preet Jain — Analyst
Rachna Kukreja — Analyst
Presentation:
Operator
Ladies and gentlemen, Good day and welcome to Carborundum Universal Q4FY26 earnings conference call hosted by Equura Securities Private Limited. 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 or near tone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Harshit Patel from Equator Securities. Thank you. And over to you Mr. Patel.
Harshit Patel — Analyst
Thank you. Hello. Good morning to everyone. We welcome you to Carbondam Universal 4Q, FY26 and full year FY26 earnings conference call. We have with us from the management Mr. Sridharan Rangarajan, Managing Director and Mr. G. Chandramoni, Advisor and Head of Investor Relations. I would now request the management to give their opening remarks on how the fourth quarter as well as full FY26 went by and provide some outlook for the future. Over to you sir.
Chandra Mouli — HR & IR
Good morning, I’m Chandra Moli. Let us start the proceeding with a disclaimer. During this call we make certain statements which reflect our outlook for the future or which could be construed as forward looking statement. These statements are based on management current expectations and are associated with uncertainties and risk are more fully detailed in our annual report which may cause the actual result to differ. Hence, these statements must be reviewed in conjunction with the risk that the company faces.
Thank you.
Sridharan Rangarajan — Managing Director
Thank you. Good morning to all of you and a very warm welcome to our fourth quarter and fully adjourning call for the financial year FY26. I trust you and your family members are safe and healthy. We’ll begin this call by providing an overview of the company’s performance for the full year FY26 and Q4 FY26 followed by an outlook for FY27. We also plan to share some glimpses of the our aspiration 2030 later in the call. To start with standalone sales on a full year basis. Standalone sales in FY26 was 3,024 crores compared to 2,784 crores in FY25.
This is a growth of 8.6%. It may be noted that the company has crossed the mark of 3000 crore in stand alone revenue this year. Growth at standalone level was driven by the Electro Mineral segment which grew by 11.1% recording a sales of 906 crores compared to 815 crores last year, ceramic segment grew from 939 crores last year to 1000 crores in this year. This is a growth of 6.5%. Abrasives increased from sales of 1,195 crores in FY25 to 1270 crores in FY26, marking a growth of 6.2% across the standalone segment.
Growth rebounded strongly over H2 and particularly in in Q4FY26. Standalone sales increased from 1410 crores in H1FY26 to 1614 crores in H2FY26 reflecting a strong sequential growth of 14.4% on a year. On year basis, H2FY26 grew by around 14.1% compared to 1,415 crores in H2FY25. You may note that H1FY26 was only marginally higher by about 3%. Standalone abrasives grew from 594 crores in H1FY26to 675 crores in H2FY26 which is a growth of 13.7% on a sequential basis on a year. On year basis, abrasives grew 15.6% compared to the last year.
Same period, ceramic increased from 466 crores in H2 and Fi26 to 534 crores in H2 Fi26 marking a sequential growth of 14.5% year on year. It grew by 8% in H2 Fi26 and 4.9% in H1FY26. Electron minerals from 425 crores in H1FY26 to 481 crores in H2FY26, an increase of 13.2%. Sequence and on a year. On year basis, the segment delivered a strong growth of 15.5% in H2FY26 and 6.5% in FY H1FI26. Overall, the growth in H2FI26 was broad based across all segments with abrasives, ceramics, electro, minerals all contributing double digit sequential growth leading to a strong performance in comparison with H2FI25 as well as in comparison to H1FI26.
In Q4FY26, standalone recorded at 845 crores compared to 769 crores in Q2FY26 reflecting a sequential growth of 9.9% compared to 686 crores. Q2FY26 sales grew by 23.1% in that period. Braces grew from 323 crores in Q3FY26 to 353 crores in Q4FY26, marking an increase of 9.3% sequentially and compared to Q4FY25, it recorded a strong growth of 21.5%. Ceramic increased from 255 crores in Q3FY26, to 279 crores in Q4FY22, marking an increase of 9.2% sequentially and compared to Q 4FY25, it grew by 21.7%.
Electro Minerals rose from 229 crores in Q3FY22 to 252 crores in Q4.26, marking a growth of 9.7% sequentially and compared to Q3FY25, it grew by 22.3%. Standalone profit after tax FY26 PAT was 416 crores compared to FY25 PAT of 322 crores reflecting a growth of 29.4% year on year. The PAT of FY26 includes a dividend from one of the subsidiary about 76 crores. H1FY26 PAT stood at 209 crores compared to H1 PAT of 180 crores registering a growth of 16.4%. H2FY26 PAT was 207 crores compared to the H2FY25 PAT of 142 crores, a strong growth of 45.9%.
Q4FY26 PAT came in at 122 crores compared to Q4FY25 PAT of 61 crores resulting in doubling of profit in this quarter. Now I move to the consolidated results. Consolidated sales on a full year basis was about 5,149 crores in FY26. This marks a growth of 6.5% over the sale of 4,833 crores in FY25. It may be noted that the company has surpassed the mark of 5000 crores in the consolidated revenue this year. Consolidated growth was driven by ceramic segment which grew from 1160 crores to 1268 crores marking a growth of 9.3%.
Consolidated abreast segment grew by 5.1% from 2159 crores to 2271 crores. Consolidated electron minerals grew by 3.7% going from 1574 crores 2,600. The mutated consolidated electron mineral growth reflects the higher base in FY25 due to VAW. You will note that WA was sanctioned in January 2025 so in FY25 WA had a normal sale of 3/4. In Q4 FY26 consolidated sales for 1383 crores compared to 1199 crores. This is a growth of 15.4%. Growth in Q4 was driven by abrasive which grew by 13.4% ceramic which grew by 18.6% electron mineral which grew by 14.6% over Q4.25 compared to Q3.26 which recorded sales of 1273 crores.
Sales in Q4 grew by 8.7%. During the last call I said the consolidated sales would go by 5.5 to 6.5%. Against this we have recorded a growth of 6.5%. Now I will cover the consolidated profit. Consolidated PBT before exceptions in FY26 consolidated profit before exceptional item and taxes stood at 416 crores compared to 572 crores in the previous year reflecting a drop of 27.2% year on year. A majority of this decline was on account of vaw almost about 87 crores Fastr almost about 22 crores Avuco 19 crores Rhodius about 46 crores.
I will cover all these in detail later. Exceptional Items FASTR and Auco in FY26 exceptional items amounting to 135 crores have been recorded in consolidated financial statement. In FY25 there was an amount of 104 crores for the provisions relating to the foreign currency deposits and receivable outside of Kimi Group following the imposition of sanctions in January 2025. During the financial year Kimi International Limited, the holding company of approved to initiate the closure of Abu Co winding up process under applicable laws in Germany considering the continual underperformance of the subsidiary with the mounting losses and its inability to turn around in view of the prevailing market conditions.
So exceptional items relating to this closure amounts to 119crores. Foska Zirconia Private Limited is a subsidiary of Kimi International Limited. Acme holds 51% stake in Fascia Zirconia Fascal Zirconia has not been able to achieve sustainable profits since 2013 despite several strategic and operational restructuring initiatives undertaken in the past. Further, the escalation in electricity and other input costs in South Africa coupled with intensifying global competition and foreign exchange fluctuations has rendered the business commercially unviable turnaround initiatives have been adversely impacted by the prevailing market conditions marking continuation of operations unsustainable.
Accordingly, the Board of Oscar Zirconia, based on the recommendations of the management have concluded that there is no realistic alternative to carry on the operation and will be seeking requisite approvals in this process. Accordingly, the consolidated FY26 financials include the impact of 16 crores relating to the write down of various assets to the realistic value. Now I will cover the profit before interest and tax. Standalone PBIT at standalone level, the business reported a total PBIT of 525 crores in FY26 as compared to rupees 425 crores in FY25 reflecting a strong growth of 23.4%.
Segment results of 491 crores in FY26 is marginally higher than the results of 418 crores in FY25. At segment level, Electron Minerals delivered a strong Performance increasing from 63 crores to 80 crores registering a robust growth of 31.1%. Abrasive PBIT was 195 crores in FY26 compared to 193 crores in FY25 registering marginal growth of about 0.9%. Ceramics declined from 233 crores to 214 crores reflecting a drop of 8%. We will cover this later in the call. Consolidated PB80 Consolidated PBIT was 404 crores in FY26 compared to 541 crores in FY25.
This marks a decline of 25.3%. The drop is due to VAW, FastQR, Auko and Rhodius. As I explained earlier. I will cover this later in detail. I will go to the Segmental Performance Abrasives Segmental Performance Consolidated Abrasives Consolidated Abrasives recorded a sales of 2271 crores in FY26 as compared to 2159 crores in FY25 registering a growth of 5.1% on a quarterly basis. Sales of 610 crores in Q4.26 grew by 13.4% compared to 538 crores in Q4 FY25. On a sequential basis, sales grew from 569 crores in Q3 FY26 to 610 crores in Q4 FY26 reflecting growth of 7.2%.
Consolidated abrasive sales growth was driven by growth in standalone segment Rhodius, ABRASIVES Abrasives Cumie America and Sterling Abrasives. During our last call I communicated a sales growth of 4 to 5% in consolidated abrasives. We can expect we are now at a growth of 5.1%. I’ll cover standalone abrasives. Standalone abrasive level abrasives recorded a full year performance of thousand 270 crores as compared to 1195 crores reflecting a growth of 6.2%. On a half yearly basis, H1.26 stood at 594 crores against 611 crores in H1.25 registering decline of 2.8%.
However, in H2 showed a strong recovery increasing to 675 crores from 585 crores in H2FY25 reflecting a growth of 15.6%. The overall the performance improved from 594 crores in H1FY26 to 675 crores in H2FY26 marking a growth of 13.7% sequentially. So overall the full year growth was driven by a strong rebound in the second half. You would note that the business faced issues such as inventory correction from the dealer channel and seasonal rains which delayed construction activity in some markets.
Tepid demand in industrial segment and a short period of caution in the northern markets. Following pelgam attack, we undertook a range of go to market initiatives including market expansion activities such as dealer appointment, new product introduction, branding of established products in newer geographies, onboarding of key potential OEMs customers and a host of other initiatives. Besides this, implementation of GST rate rationalization and a rebound in festival season demand provided a growth impetus.
I’ll move to rudius abrasives. Rudius abrasives. The sales in FY26 was €61 million compared to sales of €67 million FY25. This marks a decline of 8.8%. Q1 FY26. Rudy has made a transition to a new third party logistics partner. Considering the long term operational efficiencies, this transition resulted in loss of sales of about Euro 5 million. We communicated this earlier with you. While operations assumed normalcy by Q2FY26, the lost sales in Q5 Q1FY26 could not be regained over the rest of the years.
Yeah, so in an account. So overall I think they delivered sales of 61 million compared to 67 million. We expect sales in FY27 to grow by 5% in FY26 and the loss the PAT loss in FY26 was 2.6 million compared to 0.2 million in FY25. We expect FY26 the PAT to be of very smaller loss. QV Avoco Braces Avoco recorded a sales of 10.5 million in FY26 compared to sales of 10.1 million in FY25. This is a growth of 4.6% in euro terms. The loss before exceptional and tax increased from 6.6 million euro to 7.7 million euro in FY26 is master increase of 15.8%.
Losses were higher in AUCO on account of various factors. Anyhow we have decided to wind down the company as as following the legal process as given by respective countries. Abrasive PBIT in The standalone abrasives FY26 recorded a marginal growth of 0.9% year over year. Looking at the half year dynamics there was a strong sequential recovery with H2FY26 growing by approximately 31.3% over H1.26 while there was a significant gain in the momentum over H2 due to reasons explained earlier. The impact of lower volumes in H1 and the resultant lower cost absorption offset the Profitability gains in H2 stand alone PBET margin percentage decreased from 16.1% in FY25 to 15.3% 81bps drop.
This decline was mostly on account of the lower volume in H1FY26. At a consolidated level PB80 margin dropped by 36.2% going from 151 crores 97 crores higher losses at Rhodes. Avoco contributed to this decline. You know Rhodius lost 45 crores versus nearly 0.44 crores in FY24 and Avoco 75 crores of loss versus 58 crores of loss last year. At the consolidated level PB80 percentage of abrasive segment dropped from 7% to 4.3%. During the last call I said PB80 margin of abrasive would be 4.4% to 4.5%.
We are now at 4.3% EMD segmental performance Consolidated Electromenzer Consolidated Electromens record a sales of 1,632 crores in FY26 compared to sales of 1574 crores in FY25. This marks a growth of 3.7%. The growth at consolid level is entirely on account of lower sales at VAW Russia which declined by 22% in INR terms. In the electro mineral segment VAW Russia. In ruble terms VAW recorded sales of 6 point almost 6 billion compared to 9.4 billion rubles in FY25. This marks a decline of 35.3%. Sales in abrasives segment in VAW was about 14% lower compared to FY25.
Sales in ceramics segment was lower by 31% compared to FY25. Profit before exceptional items and tax of the entity declined from 1.7 billion in FY25 to ruble 617 million in FY26. Lower sales and profits are on account of the sanction imposed by usa. Despite the volume being considerably lower, the business continues to be profitable at its current level of operation. Standalone Electron Minerals at the Standalone Electron Minerals Electromindal recorded a full year performance of 906 crores in FY26 as compared to 815 crores in FY25 reflecting a strong growth of 11.1%.
On a half yearly basis H1.26 stood at 425 crores against 399 crores in H125 registering growth of 6.5%. H2 FY26 increased to 481 crores from 416 crores reflecting a stronger growth of 15.5%. Sequentially the performance improved from 425 crores to 481 crores with a growth of 13.2%. Overall the full year growth was driven by stronger growth in exports. Exports grew by 100% from FY25 to FY26 and currently contribute to little over 33% of total sales compared to 11% of the sales in FY25. Exports were driven by leveraging business existing relationship with many global OEMs across abrasives and refractories.
Introduction of treated grains coupled with anti damping duties against Chinese grains by EU all help to achieve this. Fascus Zirconia Private Limited sales at Faska Zirconia recorded 465 million rand compared to 415 million rand in FY25. This marks a growth of 11.2% in rand terms. The loss after tax increase ran 27 million in FY25 to 77 million in FY26 in terms of loss before exceptional and tax increased from 37 crores in FY25 to 77 crores. The volatility in zircon sand price, drop in Z450 price and an appreciation of the rand against the US dollar impacted the bottom line and hence the losses increased, so we decided to find that this is not viable anymore to continue.
Electro Mineral PBIT Consolidated PBIT on a full year basis recorded 91 crores in FY26 compared to 177 crores in FY25. A majority of this drop was on account of the sales drop due to sanctions at VAW and on account of the higher losses at Fosca, Zirconia, Sandalwood Chrome Minerals. Pbit grew by 31.1% at 82 crores compared to 63 crores. During the last call I gave a guidance of 1% to 2% of the sales growth in consolidated Electro Minerals. We are at 3.7% now. The last call I said PB80 margin could be 4.5%, 5.5% we are at about 5.6%.
Consolidated ceramics Consolidated ceramic sales of full year was 1,200 268 crores compared to sales of 1160 crores in FY25 which marks a growth of 9.3%. Growth was driven by standalone business which grew from 939 crores to 1000 crores in FY26. I’ll cover in detail the ceramics I’ll first cover ceramics portion of the business. Our ceramics segment consists of industrial ceramics, which is 57% ceramic segment and refractors which is 43% of the ceramic segment. Industrial Ceramics Full year sales stood at 569 crores in FY26 compared to 528 crores in FY25 reflecting a growth of 7.8%.
Sales in H2 grew by about 10.7%. Industrial ceramic split broadly divided into three segments, wear ceramics, engineered ceramics and metallized ceramics. Wear ceramics, which constitute roughly 30% of the business, offers wear assistance products and engineered ceramics which constitutes about roughly again one third of the business has a suit of customized engineered ceramics such as C channels, spark plugs, rings, X ray image intensified tubes, et cetera. Metallized cylinders are used in vacuum interrupters in the power transmission distribution industry that constitute another one third of the business.
Standalone valve ceramic business, which degrew by 9%, sells to three broad geographical segments. It sells products to Kume, Australia, QME, America and India. While Australia grew by roughly about 13%. India also grew well by 12%. Export to America degrew by 40%. Within the wire protection business, sales in Austrian subsidy grew by 13% driven by strong orders with the OEMs. Our domestic business grew by 12%. Engineered ceramics segment grew by 30% driven by the SOFC segment which is seeing a strong demand.
In the AI driven center data center segment, metallized cylinder business grew by 9%. This segment which typically grows about 14% was impacted by product related challenges that cropped up in production related challenge that cropped up in H1 but got addressed by Q4. This was resolved by Q4 operations or back to normal. Hence there is a fall in growth to 9%. I’ll cover refactories now. Full year refractories consist of two broad segments. Refractories and anti corrosive products. Refractories constitute 77%.
Anti gross constitute 23%. Segments stood at 437 crores compared to 418 crores reflecting growth of 4.7%. The refractory business dropped by 4.3% compared to H1FI25 and this was aided by strong return of deferred projects especially in the glass segment. Orders in anti corrosives and structural composite business have been well sustained over the year. They grew very well last year. Sales driven by fertilized industries and structural composites business. Demand was strong in various sectors. During the last call we gave a sales of growth of 13 to 14 14% in ceramic we achieved 9.3% growth in ceramics.
We’ll move to capex consolidated. Capex was 309 crores of which standalone constituted 235 crores. We communicated capex estimate of 350 crores during our last calls. I will provide a brief about what CAPEX we did last year. In FY26 we commissioned the first module of Extra facility for the manufacturing of advanced ceramic components for semiconductor wafer fabrication equipment with a capex outlay of 66 volt. The facility comprised of an end to end capability from preparation of high purity powders through precision machining and cleaning will Cater Key global OEMs like applied materials.
Serial supplies of qualified products will commence in FY27 with the line utilization gradually improving. Further expansions in line with the development roadmap and long term strategy is very much there. In the first year of serial production in FY26 the focus would be on assimilating technologies and establishing stronger system. A gradual ramp up in FY26 the focus supplies to the key customer Applied Materials will be on. In aerospace and defense segment we have commissioned the new facility with an outlay of 49 crores to produce advanced ceramics for ballistic protection of vehicle and personnel.
The business is expected to scale up high in 2030. Gradually further ramping up will happen around that time in this segment we have secured STANAG 4 qualification of vehicle armor and for personal protection of ceramic qualified BIS thread level 5 and 6 equivalent to NIJ 3 and 4 levels. We are awaiting SQUARE MET approval which will enable us to expand the business. The next major program is the upgradation of existing white fuse alumina furnace from 2 MVA to 4.5 MVA which will increase the existing capacities substantially.
Capex outlay for this is about 2.3gross including the insulation of 110kV substation. To meet the future power requirements of the plant, the incremental capacity will have a maximum revenue potential of 95 crores. For the full utilization we have increased the treatment facility as well. This is a capex outlay of 30 crores. This capex is a maximum potential revenue of about 120 crores. Additionally, pilot facility was established for the manufacturing of ceramic powders for solid oxide fuel cells.
The facility will leverage the technology tie up we had with CGCRI during the year. The business also entered into an agreement with the leading industry expert for the transfer technology towards manufacturing of aluminum nitrate and silicon nitride powders. The next major growth project is the commissioning of thin wheel capacity at Huzoor using the assets that we bought from dronecoming. Total capex outlay is 83 crores and can produce 46 million thin wheels with a peak revenue of about 120 crores.
FCF free cash flow on a full year basis at a consolidated level is 56.6% to PAT compared to last year 16.1% standalone lever. The FCF to PAT was 46.5% compared to 14% last year. Debt equity ratio is 0.08. Now I’ll go to the guidance. At the consolidated level we expect the sales to grow approximately 4% to 4.5% in FY27. However, if we exclude the revenue contributed from Fasca, Zirconia and Kumiavuko which accounts to 343 crores in FY26 sales and compare it with our business plan, comparable growth would be 11 to 12%.
Consolidated abrasive sales are expected to grow by 5.5% to 6%. However, if we exclude the revenue from Avuco which is about 108 crores in FY26 sales growth would be 11% to 12%. Consolidated ceramic growth is expected to be in the range of 15 to 15.5%. Consolidated electro mineral sales are expected to decline by 6.57% on account of the closure of Fasca Zirconia which accounted for 235 crores in FY26. However, if we exclude the revenue contribution from fasca zirconia in FY26 and compare it with what we are planning to do in FY27 the growth would be 8 to 9%.
Consolidated abrasive margins are expected to be around 9.5 to 10%. The reported margin in FY26 is 4.3%. However if we exclude the comparable margin, if we exclude AUCO losses it would be a 7.9%. So basically it will grow from 7.9% to 9 and up to 10%. Consolidated ceramic margin would be 20.5 to 21%. The reported margin is 20.2%. Consolidated electro mineral margin could be 9% to 9.5%. In FY26 the reported margin is 5.6%. However if we exclude the loss of Fascus zirconia and Compare it the FY26 margin would be 9.1%.
So basically from 9.1 it would be 9.9% to 9.5%. We expect to do a capex of about 400 crores in FY27. The key capex program for FY26 include expansion of advanced dynamics for power electronics including substrate metallized tubes, rings, braced assemblies, expansion of brownfuse alumina, an addition of integrated furnace facility for thermal spray powders and zirconia furnace and grain processing facility. We also intend to do 110kV substation and tunnel clean for refractories. These are the major projects which should account for about 400 floors of cable capex.
Now I would quickly cover our Aspiration 2030. The company launched its Aspiration 2030 in FY26 is the first year. The Aspiration is built on seven key building blocks building a high performance organization, ambitious growth for the current businesses, focusing on innovation, exploring new opportunities for the growth, achieving manufacturing excellence, strengthening sales and marketing excellence and supporting all this through digital and ESG initiatives. Progress is regularly tracked through structured reviews involving teams across the business.
In abrasive business, the company has a clear market strategy across the segments in its expanding dealer network, strengthening relationship with existing partners. The focus is also gaining on the new customers and increasing business with the current ones. The company is strengthening its presence in the areas where it has currently low presence. It has also growing sourcing of business sourcing business and has set up a new vertical for this a clear roadmap for the new products to be introduced with the well supported investment in R and D team and capability and process building in R and D team.
The thin wheel capacity based on assets acquired through Dramco has been discussed earlier. To stay competitive against the low price products, especially from China, the company has launched a cost optimization program across significant SKUs and strengthen the coordination between sales, product development and quality teams using digital tools. In the electro mineral business, the capacity is being expanded by upgrading furnaces. The company is also increasing its capacity in value added products in aluminas and diversifying raw material sourcing.
Exports are a key priority and already form a significant share of the business. Electromineral I would like you to look at it in three broad categories. Core Our range of fused alumina products including bfa, WFA and silicon carbide products constitute our core product portfolio. We have expansion plans in both WFA and bfa. While the core products will continue to form the bulk of our product basket, its share is expected to current level of 85%. It will come down to 55 to 60% by 2030 as other product categories would scale up.
Treated Products Treated products which include products that undergo heat treatment and coating are just relatively high performing in nature. As discussed today, we are undertaking related CAPEX initiative in this area. We aim to increase the share of treated grains from 5 to 6% at the current level, nearly 20% by 2030. Specialty products the business currently manufactures Alumina zirconia products catering to applications in abrasive refractories, metal matrix composters and related industries.
We also produce some zircon mullite grains. We have expansion plans for both Alumina zirconia as well as zirmul. In addition, as part of the LDS initiative we plan to start production of calcium sublimation Zirconia and Mono clinics Zirconia Collectively, this suit of zirconia based products will form speciality products portfolio whose share is expected to increase from 8% to currently to 18 to 20% by 2030. Transformational products at the same time, the company is investing in new technologies and products such as SOFC powders and nitrates which are expected to drive future growth in FY26.
We have commissioned a pilot lab facility with a spray pyrolysis technology to prepare powders for SOFC and SOHC cathodes. This was done based on the technology transfer of cgcri. Going forward, we will focus on on capacity creation and securing anchor customers. There has been good progress on nitrate side as well with a leading technology consultant being onboarded in this year. Apart from this business has achieved Phi N purity on HPSIC and will be working on securing customers for the same over FY27.
The technology route for success purity of HPSIC also being initiated and the business currently working on the pilot scale manufacturing facility are the same. Besides this, we are working on establishing application for graphing in bioplastics, coating, concrete and rubber. All these areas such as thermal spray powders, electrolytes or ceramic powders for sose, nitrides, hvac graphene are collectively called transformational products. We expect transformational products to contribute around 10% by 2030 compared to the current level.
Practically very little growth in this segment is expected to be gradual as these are advanced materials catering to the emerging sector. We believe we need to create a good base in the transformational product in the aspiration period and create a new leg of growth beyond 2030. Ceramics when we come to industrial ceramics segment, we can view it as core and emerging businesses where metallized cylinders, vacuum interrupters, sorry metallized cylinders for vacuum interrupters, engineered ceramics for diverse applications would fall under the core business.
Emerging business encompass components for semiconductor, wafer, fab equipment, aerospace and defense electronic substrates. In the core segment, the business plan is to increase metallized cylinder capacity substantially from the current level. Additionally, the business would expand production facility to meet the growing demand in SOFC segment. In the emerging segment, the company is entering into high growth areas like semiconductor through newly commissioned plant which manufactures components that go into wafer fiber equipment.
Products have been approved by key customers for CL production. Work is also underway to build capabilities in advanced electronic components through global major tech partners. Additionally, the business is entering to AMB and DBC active metal brace products and direct bonded copper products substrates and braced assemblies for power electronics. A qualification program has been drawn and both these critical product segments and prototype development submission will be completed this year. In the refractory business, the growth will be based on both fired and minerals.
The fab refractory portion of the business, we are increasing the capacity by 75%. Additional capacity will focus on mullite, high alumina and IFB bricks, PCFC shapes for application in glass, petrochem superalloys and ceramics. We are also progressing on our plans to increase our monolithic capacities. We will gradually ramp up of capacity in composites business as well in carbon bricks, floor coating, advanced structural composites. While we do this host of initiatives at the business, we’re also done good work in terms of the support functions.
QME’s Manufacturing Excellence Program which works on integrated manufacturing excellence framework, improvements in quality cost delivery and operational efficiency across businesses. This program is deliver to intent cost savings in the first year through automation, digitally enabled Q accuracy and throughput improvement in key assets. Beyond savings in the IMAX focuses on institutionalizing a culture of manufacturing excellence and the support of Manufacturing Excellence Academy which sends the program for both management and non management staff.
The company is also strengthening sales capabilities through CRM implementation and the Sales Excellence Academy which aim to drive more data backed approach to sales. Digital initiatives are further enhancing manufacturing and planning systems including the rollout of manufacturing execution system across identified plans and implement the SNOP software. Safety and sustainability remain central to the company’s long term strategy. Through a structured EHS excellence for mf, the company is advancing its goal to near zero emission water positivity and improved material circularity.
FY 2030 targets include increasing renewable energy use to 50%, reducing emission intensity by 25% and lowering energy intensity by 20% from FY 2025 levels. Progress is supported by renewable energy adoption, cleaner fuels, waste heat recovery, energy efficiency initiatives. Company has also made significant progress in zero harm journey, recording a substantial reduction in ltifr through risk management and behavioral safety programs. People capability development remains a key enabler of growth and program called Face to Perform FACD to Perform.
The framework consists of Focus on the factory which is the first major initiative, acquisition of talent, rewarding career path, employee experience and development of talent. We aim to do a high performance organization leadership development initiatives include the next hundred programs or helping build a strong future ready talent pipeline. Alongside this the company is driving cultural transformation through default behaviors, bold and timely decision making, embracing change with the solution driven mindset, fairness to all stakeholders, accountability, decision making and standing up for each other.
So I would like to summarize that we continue to drive the focus execution across functions with multiple initiatives. The progress achieved in the first year of execution is really giving us confidence. We have delivered the top line as well as the bottom line as per our internal targets and the progress from the functional level also has gone well. So with this I would like to open up for Q and A. I know it is a long opening remark, but I thought it is needed would have a 45 minutes of the Q and A.
Questions and Answers:
Operator
Thank you very much ladies and gentlemen. We’ll now begin with the question and answer session. Anyone who wishes to ask a question, you pressed R and 1 on the dashboard telephone.
Jonas Bhutta
If you wish to remove yourself from the question queue, you May press R&2.
Operator
Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for A moment. While the question queue assembles participants, you may press star and one to ask the question. The first question is from the line of Jonas Butta from Aditya Birla Mutual fund. Please go ahead.
Jonas Bhutta
Good morning sir. Thank you for the opportunity. Firstly, just want to congratulate the management on taking a timely decision on the divestiture of opco. I had two questions both sort of related to your high growth or emerging segments. Firstly, if you can touch upon the SOFC segment there we’ve seen the client place some very large orders on another vendor in India provides line of sight right up till calendar year 29 and in fact 2030 as well in your case if you can give us the lay of the land in terms of how has that business for you grown?
You know what is your wallet share? Are you one of the many vendors for those ceramic parts? Do you see any disruption in the technology that leads to lower adoption of ceramics in that thing? And you know, can, can this business become like a 10 to 12% portion of your sales maybe three or four years down the line? That’s the first question.
Sridharan Rangarajan
Thank you. I think so. First of all we feel that we are very important shareholder of the particular segment that we serve to the SYFC segment. We believe that we have a vision at least going up to the next year and there’s a line of sight the management provides, the customer provides going up to say 2028 like that and the customer also is growing well so we have to build the capacities using that as a clue plus the intermediary gate length that they always give for the next one year. So this is how we are looking at and we feel that given what the customer is embarked upon and the kind of growth that they are facing, we feel a very strong growth possibility in this segment and we have grown well last year and we expect to grow well in the coming years as well.
Jonas Bhutta
And what would your wallet share with the client be?
Sridharan Rangarajan
We wouldn’t like to share such details at this call we have as I said that we feel that we are an important supplier to the customer.
Jonas Bhutta
Sure. And any guidelines on how big can this business be? Three years out, sir, for you, not a number, but at least as a person can it be meaningful in terms of like greater than 10%? Definitely
Sridharan Rangarajan
It will be a meaningful share that we will have and as we said that the engineer segment itself, you know is currently is one third of the business that substantially it would grow up is our
Jonas Bhutta
Understood. Thanks. The second question was on the new capex that you’ve Done for Applied Materials. If you can dwell a bit on what exactly will that help you get with, you know for Applied Materials where is this product used particularly? And you know with a. I think if I got the number right you did about 60 to 70 odd crores of capex for that. Where does it take you? Is it predominantly first to get the first articles out and get the pre qualification and post which will require a further capex?
If you can give a timeline to that. That’s my final question. Thank you.
Sridharan Rangarajan
Right, we’ve crossed the qualification stage on set of products and this is an initial investment. As I said we expect that this investment could go at least three to four times higher and we are geared for that and we also expect the revenue potential also is substantial in this industry.
Jonas Bhutta
Got it. And I’ll take this offline. Thank you.
Sridharan Rangarajan
Yes,
Operator
Thank you. Next question is from the land of Harshit Patel from Equator Securities. Please go ahead.
Harshit Patel
Thank you very much for the opportunity. Firstly on abrasives, China has removed the export rebate on abrasive products from 9% to 0% effective from April onwards. Has the domestic market pricing improved because of this or we have been able to garner a little bit better market share in the last one or two.
Sridharan Rangarajan
So it’s a very recent phenomenon. At this point in time lot of people will have inventory through the imported materials. All that is happening but we believe that this is good for the domestic industry and it will help us to grow. Of course the growth in H2 is about 15% is very encouraging. A lot of that could be due to this factor as well. But I think overall we see a rebound and our work in terms of all the areas, whether it is GTM initiatives, new products that we introduce, bringing cost down of our products, all these combined effort of our strategy is playing out.
We have been doing over the last 18 to 24 months is now playing out.
Harshit Patel
Understood. Just a follow up to that given that we posted such a strong growth in the fourth quarter. If you could explain your growth in terms of how industrial market did, how precision did, how retail abrasives did and what would be the outlook on these three sub segments going ahead?
Sridharan Rangarajan
I think I gave a broad outlook in terms of the segmental sales that what we are looking at but we feel that standalone we grew 6.2% this year. We believe that we can grow in the range of about 12% next year.
Harshit Patel
My second question is on standalone electromineral, what has been the contribution of volumes and higher pricing in the 22% YoY growth that we posted for fourth quarter and even the full year growth at 11% was reasonably healthy. Also you could comment on the Chinese import intensity, whether it has increased or decreased in recent times in that electro minerals business based out of India.
Sridharan Rangarajan
So the Chinese intensity continues to be there. There’s no kind of coming down of it. But we started focusing more on the treated products export segments and that is the focus that we are looking at and that gave us this growth that we posted in the full year as well as in the Q4. The predominant growth is come from volume where price is probably you can treated as flat, slight, some small percentage.
Harshit Patel
Understood sir, thank you very much for answering my questions. I’ll come back in the day.
Sridharan Rangarajan
Thank
Ravi Swaminathan
You.
Operator
Thank you. Next question is from the line of Ravi Swaminathan from Avendus Park. Please go ahead.
Ravi Swaminathan
Hi sir, thanks for taking my question. My first question is with respect to the FY30 Vision 2030 Vision. Any revenue target or growth target that we have and any margin target that we have for this
Sridharan Rangarajan
Ravish Swaminder. Thank you for asking this question. We have not been sharing a guidance. We have started sharing only a one year guidance and also giving a programs that what we are looking at going for transpiration 2013. We believe that it would energize and bring the growth substantially from now onwards.
Operator
And
Sridharan Rangarajan
We have kind of addressed some of the issues that we are facing in terms of loss making subsidies. So we should see a rebound.
Ravi Swaminathan
Got it sir. And with respect to the ceramics and refractory business, if you can once again highlight you had mentioned numbers in terms of bifurcation between ceramics and refractories, if you can call it out once again and what kind of growth that we should think of in each of these individual sub segments. You can give.
Sridharan Rangarajan
I think I gave an elaborate one but I’ll just give a broad outlook to you is that we feel that 57 percentage of the ceramic is industrial ceramic and 43% is the refractory business. The growth that we are looking at in terms of just a second, The growth in the growth overall in ceramics segment that we are looking at this year we achieved 6.5%. We expect next year would be in the range of about 14%. I’m not sharing the individual data of the refractory and industrial ceramics but they would broadly pump out of around this range 14%.
Ravi Swaminathan
Yeah. Thanks a lot.
Sridharan Rangarajan
Thank you.
Operator
Thank you. Next question is from the line of Ahmed from PL Capital. Please go ahead.
Pravesh Kocher
Thanks for taking my question. Just wanted to understand how has been the exports across the segments. I think you mentioned something 11:33, but I missed that. So if possible for you to give us some color in terms of exports within ceramics and abrasives and what is the kind of outlook there?
Sridharan Rangarajan
I shared the export share of electro mineral business which I said that we have reached a 33% share in the current business. Over 300 crores of export in electro mineral business. That’s what I share.
Pravesh Kocher
How has been the export in ceramics and abrasives if you can get the breakup and what’s the outlook there? Also
Sridharan Rangarajan
Ceramic is the biggest portion of the ceramics. Over 80% of the business is all exports. And that is doing fine. I mean that basically whatever is the growth that I talked about on industrial ceramics predominantly comes from those areas. Abrasive, very small portion of the abrasive business is the export. It’s less than 10% is export.
Pravesh Kocher
Understood, sir. My second question on Rhodes, I think you guided about 5% top line growth and kind of break even some very small loss. So what exactly we’re factoring in the growth seems to be still kind of mid single digit. But we are expecting the break even. So what where exactly the improvements will happen? And if you could elaborate more in terms of how business volumes are happening in rodeos and what will lead to the turnaround this year.
Sridharan Rangarajan
So if you see the last year, the big reason for
Unidentified Participant
The drop in. Can
Sridharan Rangarajan
You please. Yes,
Jonas Bhutta
I’m sorry, sir. Yeah, go ahead.
Sridharan Rangarajan
Right. Last year we had almost 5 million euro impact in terms of the logistics change. And that really affected the top line change. And we feel that they have been growing in the range of about 6 to 7%. And we feel that that growth should happen. And second, is that because of this loss of seal as well as the margin impact due to this loss of sale along with the logistics cost on the shift, these things would come down and hence we feel that we should get back to a small loss or a break even. The third reason is that we have also now working on a program with the Proteus team in terms of how do we accelerate the profitability as a special program.
So these are the reason why we think that we should get here.
Pravesh Kocher
Understood, sir. Thank you. Thank you.
Sridharan Rangarajan
Thank you.
Chintan
Thank you. The next question is from the line of Harshit Patel. Please go ahead. Harshit. Harshit, you may ask a question. There is no response on the line of Harshit Patel. The next question is on the line of Akshay Thakur from Helios Capital Management. Please go ahead.
Akshay Thakur
Hi sir. Thank you for such an elaborate Call. So my question is specific to the. Hello, can you hear me? Yes,
Sridharan Rangarajan
Yes.
Akshay Thakur
Okay. So my question is pertaining to, pertaining to the stationary armor in within your defense and also CFRP products for aerospace. So currently there is a lot of ecosystem being being developed for aerospace and for aeronautics and for this defense as well. Almost 100% of that would be imported. So how, how do you see this like in terms of commercialization, where are we placed? Are the certifications right? Are we negotiating with the OEMs or where are we placed on that?
Sridharan Rangarajan
So I think you kind of very clearly described this. So step one is to have the certifications in place, which we are definitely doing it. I described the certifications that we already got. So pretty much we are in good shape as far as certification is concerned. We are working with few anchor customers at this stage. We also have the ability to work with them because they would be the front ending in terms of what they would finally supply. We are only a product supplier to this case. So hence this is how we are planning to move in this model.
Akshay Thakur
Thank you sir, that was helpful. My second question is. So it’s been long time that we are facing the war situation in, in the Russian subsidiary. So like all this time where you like, are we able to figure out any alternative strategy? Like India also imports a lot of silicon carbide. So are there any alternative strategy? If there is, what type of lower realization would sic get in other economies?
Sridharan Rangarajan
Honestly, it’s difficult to create a capacity and the cost would be, you know, pretty high. So it’s going to be very difficult to recreate anything like that. But at the same time Russia is not in a position to export products which is what we are currently going through. So practically we need to wait for the sanctions to be lifted. So which gives us an ability to, you know, go beyond Russia. So at this stage we don’t have an alternate solution for this.
Akshay Thakur
Thank you. Sir, one more question. Can you just throw some light on the subsidiary you have plus, how is it doing?
Sridharan Rangarajan
Plus is doing fine.
Akshay Thakur
In terms of profitability.
Sridharan Rangarajan
Yeah, they made profit and there. It’s a very small profit. They are doing fine.
Akshay Thakur
Thank you so much.
Sridharan Rangarajan
Yes, thank
Chintan
You. The next question is from the line of Chintan from Pico Capital Private Limited. Please go ahead.
Unidentified Participant
Thank you so much for taking my question. So sir, one of the questions that I had was that as you said, the ceramics business is around 80% exports for us. Most of our peers will be global and they spend a lot on R and D. So how do you see our Business and our R and D evolve over the next few years and what are the key areas that we’ll be focusing on?
Sridharan Rangarajan
Yeah, I think it’s a great question. We spend roughly about, we spend roughly about 1% as R& D and I think this needs to go up and we expect that we should at least start spending 2 to 3% level. We are working in terms of strengthening our R and D team across the individual bus and we also strengthening the new product development process coupled with software enabled process to strengthen so that we kind of make sure that we do the right thing in terms of new product getting the right input from the, from the market, customers and the users.
So all these factors are now being put part of this R and D process. So strengthening the rd, building the capability, putting process. We need to accelerate the speed both in terms of CapEx as well as in terms of the OpEx.
Unidentified Participant
All right, the second question I had was more on the ceramic side. So basically a lot of applications in EV require ceramics. So are we working on any products or programs with any OEMs or tier ones where ceramics are getting used on the EV space and how do you see it evolving over the next three to five years?
Sridharan Rangarajan
Yes, we do work. I think this is part of the engineered ceramics that I described and that’s why we feel quite a bit in terms of that segment’s growth. So we are working with tier one suppliers to OEMs. That is how we, our role would be and that’s definitely we are doing that.
Unidentified Participant
And how do you see it evolving? Maybe sir, means would it be a substantial part of our revenues? What are the key focus areas? If you could just elaborate on that.
Sridharan Rangarajan
So engineered ceramics will be a key focus area for us which would bring a substantial share of our business which consists of areas like that. What you talked about in terms of SOFC EVs as well as, you know, rings. It also consists of image intensified tubes. All these products group would fall under that and we feel that the growth rate would be substantial and we also feel that the share of business will go up and that is how we are creating this capacity. We are also trying to create, as I said that,
Sejal Kapoor
You know,
Sridharan Rangarajan
Ceramic substrate capacity for electronics is. We are creating, we are working on that. Technology transfer agreement is done now. The capacity augmentation would happen in FY27 on that.
Unidentified Participant
All right, sir, thank you so much for taking my questions.
Sridharan Rangarajan
Thank you.
Chintan
The next question is on the line of Preet Jain from Nivesh Investment Advisors. Please go ahead.
Preet Jain
Thank you sir. For Taking my question, congratulations on good set of numbers. So my first question is on the semiconductor side. The semiconductor opportunity seems to be a massive long term driver. So can you split between structural ceramic for FAB equipment and HPSIC for wafer? And could you map out the current qualification cycle cycle timelines with global oem? And given the strict purity requirement, when do you expect this segment to cross the threshold into material revenue generation for us?
Sridharan Rangarajan
Well good lot of loaded comments and you’re asking the right question particularly on the this ceramic for the wafer fabric equipment. In the case that we have built the capacity, the material qualification process is pretty long. It would take about four to six years. We have crossed that and that is how we have created the capacity at this stage. We have samples tested now we are in the development phase is completed and now we will start supplying to them. The serial production will start. So you’re right, it takes long time and that’s how we took long time to get here.
We will now complete phase one and then expand to phase two quickly.
Preet Jain
And when can we expect material revenue generation from that
Sridharan Rangarajan
2029 onwards? We can expect.
Preet Jain
Okay, and my second question is given the massive power distribution and grid infrastructure capex happening domestically, how quickly we can de water lake our current metallic cylinder capacity? And furthermore, are we seeing traction in penetrating the export market to compete against Japanese player like Kiyoshira and ngk?
Sridharan Rangarajan
Sure we have in fact our metallized cylinder. The biggest portion is only exports. So definitely we are competing with the names that you are mentioning and we are doing it well. And the expansion would happen in the next 18 months, 24 months in a phased manner. I mean it consists of three phases but it could happen in that fashion.
Preet Jain
So do we have the capacity till 1 1.5 years next to supply this?
Sridharan Rangarajan
Yes, yes definitely we have. We are one of the, you know, number two worldwide player in this field and we feel that we have headroom plus we also creating the newer capacities in this debartle necking and creating the capacities.
Preet Jain
Okay, enter another question. Another question is you. You are supplying to one of the largest SOFC manufacturers in the world. So basically our current realization according to our revenue fleets are 13 to 15 lakhs per megawatt of deployed. And given that SOF manufacturer has expanded its capacity from 1 gigawatt to 2 gigawatt. Can, can I know, can I get to know what are the your revenue estimations regarding that SOFC product? And given that five year, five to seven year replacement cycle of that SOFC cell, can we also expect Revenue from the replacement demand.
Sridharan Rangarajan
I think a lot of that has got sub elements of it. You are getting headline information but we feel that definitely the gigawatts of additions that each of them would add would definitely help us. Our demand also would go up. As I said in the earlier question, we feel that the growth rate in this segment is going to be substantially high. We are parallelly gearing up because we are also feeling that we need to work in terms of creating this capacity ahead of time. So which is what we are working on this.
I think you are right. Step one is to this growth would, you know, seem to be going up because of the AI related data center demand, etc. So definitely it’s a clear sign of growth in that segment. And SYFC is a clear market leader in in a clean energy segment which definitely helps us quite a lot.
Preet Jain
Okay, if time permit, can I ask one more question?
Sridharan Rangarajan
Yes please.
Preet Jain
Thank you. Thank you for giving me opportunity. So basically China has reduced its export rebate in April 2026 from 9 to 13% on their apresis products. So are we seeing any current traction of abrasives sales growth volume improving in current month or in last month due to this policy?
Sridharan Rangarajan
So I did comment on this a little bit in the earlier question. I think it just happened, you know we are in the month of May so it just a lot of inventory would be there in the, you know, the system that should get, you know, also completed. I feel that definitely it is a good sign. It, it helps the domestic market to grow faster. We have grown 15% in H2.
Harshit Patel
Okay. Okay sir. Thank you sir.
Sridharan Rangarajan
Thank you. Thank you.
Chintan
The next question is on the line of Sejal Kapoor from Antifragile Thinking. Please go ahead.
Sejal Kapoor
Yeah, thank you for the opportunity. Just a couple of questions on the R D side of things in the business. What percentage of your recent RD and innovation projects were deliberately stopped or pivoted or you know, redesigned because customer or market learning invalidated the original assumption? That’s my first question.
Sridharan Rangarajan
That’s a great question. If I just quickly look around our R&D at 4 bus. I haven’t. Experienced any such program of that we stopped our customers request change type of a situation. Definitely not. But we have experienced cases where you know, you need to put a particular application but you know, you require some more work to make sure that the application really is capable of using our product. That type of thing happens.
Sejal Kapoor
No? Understood. Thank you. So how will Kumi ensure its investments in silicon carbide, advanced ceramics and other high tech materials? Become high Rosie scalable businesses rather than technologically strong but capital inefficient platforms.
Sridharan Rangarajan
I’m not sure I get your question. Why would you think it’s a capital inefficient platform?
Sejal Kapoor
No. So I mean do you have internal benchmark that you. So we are doing a lot of advanced R and D and in the annual reports and we are almost confidently saying that post 2030 and Kumi will be emerged as a very different looking businesses and business because of the initiatives and that we are doing across many things. So I can name maybe most futuristic opportunity to my mind is something like semiconductor linked materials EV but even things like electro minerals, silicon carbide, you know we have got most strategic capability around that difficulty is also very high.
So what is the kind of see ultimately from an investor perspective it’s about you know this how scalable the business can be and what will be the steady state ro c it will generate that will determine the outcome will determine the shareholder wealth creation. So I was coming from that perspective.
Sridharan Rangarajan
Sure. No, I think these are definitely looked at part of our threshold to evaluate any such opportunity. Clearly the dimension that you are looking at market size and opportunity, growth rate and
Jonas Bhutta
You
Sridharan Rangarajan
Know the roce that we would get in a steady state. We feel that these areas that we just listed in terms of ceramics for semiconductors, ceramic for electronics, you know, high purity silicon carbide, ceramics for aerospace and defense. All these areas we feel that are good areas to work on and invest and that’s how our programs are on. QMEE is capable of funding itself if you really look at it. We spent this year 310 crores plus capex and we have zero debt net zero debt at this point and substantially very good FCF.
So we are able to fund these type of programs and kind of practically we think that we would spend 400 crores next year as well. And the year before we did spend about 250 crores plus.
Sejal Kapoor
No, no helpful. Thank you so much. That answers all my questions. Thank you. Wish you all the best.
Sridharan Rangarajan
Thank you.
Chintan
Thank you. Mr. Kapoor, the next question is from the line of Rachna Kukreja from Sinpl Ltd. Please go ahead.
Rachna Kukreja
Thanks for the opportunity. Sir, could you please help me understand the performance of our aggressive business for our JVs? Like when see the business for addresses there is being declining in terms of growth as well as segmental profit margins. If you could give some color on the wind performance it would be very helpful. Hello.
Sridharan Rangarajan
Yes. So madam, so I am afraid I’ll able to Comment on that. This is another listed company, so I think I would encourage you to stay in touch with the management. They would be able to provide that. But I think the shortfalls are coming because of the machine building segments and Super Abrasive is doing fine. I would limit my conversation to this level.
Rachna Kukreja
Okay, thank you.
Chintan
Thank you.
Sridharan Rangarajan
Thank you.
Chintan
We take the last question from Pravesh Kocher from For Lion Capital. Please go ahead.
Pravesh Kocher
Hi, thank you for taking a question. First one on ceramics. I think last call you mentioned, we end up doing 13, 14% growth in that segment. And then the guide for next year also is 15 to 15 and a half and we have ended the year at close to 9. So just want to understand if the, you know, what’s the gap between those two. Second, again, on the ceramic SOFC side, do we supply only the ceramic plates, etc. Or are we also in the electrolytes for that particular business? Thank you.
Sridharan Rangarajan
Okay. Right. Two great questions. I think why did we miss. I think that’s the only area we missed our guideline. It’s largely because of deferred projects, which I think is substantially the one line reason for. Or why did we miss our guideline and why do we think that we can meet. 15 is the backlog and focus from our customer gives us that confidence. We are not currently into electrolytes, but you are asking a very deep question. We have the capability because of our electro mineral business. We have the capability of manufacturing electrolytes.
That’s the technology we had worked with CGCRA and as I mentioned, we had a small pilot scale plant we established to manufacture that, which is what we just shared in the call as well. So this is. We have a small capability there. We need to now expand that. At this point in time, it’s more a pilot scale
Pravesh Kocher
On the overall segment. My question was earlier we used to anticipate 16 to 18% kind of growth. Right. In the ceramic segment. So I was assuming because of the deferred projects, the next couple of years would be in that range. Right. Given this year, some projects were deferred into next year. So just trying to understand if structurally there’s more competition that you’re seeing or the overall market itself is kind of slowing down.
Sridharan Rangarajan
I don’t see. I mean, it’s not because of structurally something is changing. I feel that it’s more projects. Plus a lot of it would depend also on how we do business in America, terms of the ceramic side of the business. So these are factors that we have kept in mind when I told kind of 14 to 15%.
Pravesh Kocher
Understood. Thank you so much and all the best.
Sridharan Rangarajan
Thank you.
Chintan
Thank you. That was the last question. I would now like to hand the conference over to the management for closing comments.
Sridharan Rangarajan
Right. So first of all I thank you all for patiently hearing us. But I just want to summarize. We have done Fairly well in FY26. We have addressed all the major issues in terms of loss making, subsidies, the loan contribute a loss of over 100 crores to 120 crore. So the first year of our five year journey we have done fairly well. KUME has created a good base over the last 24 months for this aspiration. KUME has made a significant capacity in the capability investment. In FY26. You see three years, 280 crores, 310 crores.
Next year we would plan to spend about 400 crores. That creates all of them are in capacity or capability building. So that would give a strong future revenue growth. QME has achieved a good free cash flow after meeting all capex investment. It’s a good sign and QME is net debt free. QME has drawn a good aspiration 2030. It’s well resourced both in capacity and capability, has built a good strong execution rhythm. Above all it has a good leadership and a strong team exhibiting bfast behaviors which consists of bold and timely decision making, embracing the change with solution driven mindset, fairness to all stakeholders, accountability in decision making and execution and standing up for each other.
So thank you all for hearing us during this call. Look forward to meeting you in the next call soon. Thank you. Bye. Thank
Chintan
You so much sir. With that we conclude this conference call. Thank you for joining us and you will now disconnect your lines.