Deepak Nitrite Limited (NSE: DEEPAKNTR) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Ranjit Cirumalla
Sanjay Upadhyay — Director Finance and Group CFO
Maulik Mehta — Chief Executive Officer and Executive Director
Analysts:
Unidentified Participant
Ranjit Cirumalla — Analyst
Nirav Jimudia — Analyst
Sanjesh Jain — Analyst
Arun Prasath — Analyst
Sanil Jain — Analyst
Krishan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Deepak Nitrate Q3FY26 earnings conference call hosted by IISL Capital Services Limited at the outset I would like to clarify that certain statements made or discussed on the conference call today may be forward looking in nature. And a disclaimer to this effect has been included in the result presentation shared with you earlier. As a reminder, all participants lines will be in listen only mode and there will be an opportunity for you to ask question 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 over the conference to Mr. Ranjit Sirumala from IIFL Capital. Thank you. And over to you sir.
Ranjit Cirumalla
Thank you. Pari. Good afternoon everyone and thank you for joining us on Deepak Nitride Q3 and 9 months FY26 earnings conference call. Today we have with us Mr. Maulik Mehta, Executive Director and CEO. Mr. Sanjay Upadhyay, Director Finance and Group CFO and Mr. Somsekar Nanda, CFO of Deepak Nitrite Limited. We will begin the call with opening remarks from the management team followed by an interactive Q and a session to begin. Mr. Maulik Mehta will share the views on operating performance and the growth plans of the company. Followed by Mr. Sanjay Upadhyay who shall take us through the financial and segmental performance.
Thank you. And over to you, sir.
Maulik Mehta — Chief Executive Officer and Executive Director
Good afternoon everybody and a warm welcome to you all on Deepak Nitrite Q3 and 9 month FY26 earnings conference call. Our result documents were shared with you earlier and I trust you’ve had the opportunity to review them. I will briefly cover the financial highlights and the operational highlights for the quarter and nine months ended 31st December 25th. Mr. Upadhyay will then take you through a detailed financial review following which we would be happy to address your questions. The global chemical industry continues to navigate through a very complex operating environment characterized by persistent pricing pressures, heightened competitive intensity and an uneven demand pattern across key end segments.
These challenges, driven largely by global trade flows, protectionism and aggressive pricing by Chinese producers have influenced market dynamics throughout the year. In this backdrop, Deepak Group has delivered a mixed performance characterized by higher volumes with transitionally subdued margins. During Q3 our consolidated total revenue stood at 1983 crores registering a growth of 3% on both a year on year and a quarter on quarter basis. EBITDA for the quarter increased by 16% year on year to 219 crores underscoring the benefits of improved operating efficiencies, prudent cost control measures. This demonstrates stability despite softer price realizations across select product categories.
For the nine month period of FY26 consolidated revenue stood at 5820 crores with an EBITDA of 658 crores. While profitability during the nine month period reflects the impact of of challenging pricing conditions, our continued focus on operational excellence and volume led growth supported performance stability. Our domestic to export revenue mix remains at 83 to 17 during Q3. 26 highlighting the resilience of our domestic franchise while continuing to strengthen global customer relationships. Working capital efficiency remained a strategic priority and through tighter inventory planning, supply chain optimization and improved receivables discipline we achieved better cash flow management and enhanced balance sheet quality.
The phenolic segment delivered a consistent performance during the quarter. Revenues from operations stood at 1334 crores and EBIT reached 145 crores representing a 20% year on year increase. Increased phenol and acetone sales volumes were driven by higher plant utilization and ongoing process optimization resulting in better operating leverage. The advanced intermediate segment recorded stable revenue growth with Q3 FY26 revenue reaching 652 crores reflecting a growth of 18% year on year and 11% quarter on quarter. This was driven by higher volumes with improved market penetration of key products. However, EBIT for the segment stood at 15 crores reflecting this continued pricing pressure arising from aggressive Chinese dumping and global oversupply.
A defining milestone during the year has been the strategic integration and ramp up of new capacity. The commissioning of the nitric acid plant, both the WNA as well as the CNA plant in Andesadi along with the nitration and expanded hydrogenation plant at Dahij completes our vertical integration across the ammonia nitration to amines value chain. This integration enhances raw material security and structurally strengthens our margins through reduced supplier dependency. It also unlocks a broader downstream product portfolio and positions deeper group as probably the only completed integrated aromatic to a Mine player Our long term growth strategy remains firmly anchored in value chain integration and specialty product expansions.
The MIBK MIBC project is progressing well and is targeted for commissioning within this quarter. Our Polycarbonate project, a transformational step involving India’s first integrated propylene to polycarbonate manufacturing plant dismantling activities at Staad, Germany are underway marking a major milestone towards relocation to India. In the meanwhile, engineering activities, technology engagement and site construction amongst other initiatives are progressing at a steady pace. We are accelerating our transition towards green energy by sourcing 60 to 70% of our energy mix from hybrid renewable sources, improving energy efficiency and embedding green chemistry principles across operations to navigate current near term headwinds.
The Group is strategically prioritizing product innovation and and geographical expansion with a specific focus on our fluorination, nitration, diazitization and amination segments. A boost to this strategy comes from a favorable shift in the US India tariff policy along with a complete removal of anti dumping duty by the US on Deepak sodium nitride exports. Complementing this market expansion, the Group’s integrated approach of leveraging in house nitric acid production for downstream nitration and amination is set to steadily improve overall profitability. With this positive backdrop, the Group expects a favorable performance in Q4 26. Notably, the India EU trade deal provides Indian chemical companies with seamless access to one of the world’s largest markets, boosting global competitiveness through reduced trade barriers.
This fosters long term strategic partnerships and encourages European firms to integrate Indian manufacturers into their high value supply chains while also opening up important sectors of the Indian consumer base to European manufacturers for high end products such as automobiles. Deepak is driving the Group’s commitment to integrating different value chains which will increase margins, enhance resilience and reduce our carbon footprint in both current and future investments. Our strategy is guided by three core mantras achieving the world’s best quality, maintaining the world’s best capacity utilization and ensuring complete integration across the value chain. Overall, while cautious, we remain optimistic.
Recent developments in global trade dynamics present an encouraging medium to long term opportunity base. We remain focused on driving operational excellence, accelerating ramp up of new capacities, expanding our specialty and high value product portfolios, deepening geographical diversification and maintaining financial prudence. I would now like to hand over the call to Mr. Sanjay Upadhyay who will address this forum and take you through the financial performance.
Sanjay Upadhyay — Director Finance and Group CFO
Thank you Monik. Good afternoon everyone and thank you for joining us today on Deepak Nitro earnings goal. I will now take you through the highlights of financial results for the quarter and nine months ended December 31, 2025. PNS delivered a steady and resilient financial performance during the third quarter and the nine months period FY26 despite external headwinds, our strategic focus on project execution, volume expansion, operational excellence and disciplined cost management enable us to maintain stability across our core businesses. Strong capital efficiency continues to underpin our performance with consolidated ROCE at 15%, reinforcing our ability to consistently create value across business cycles.
For Q3 FY26, the company reported consolidated total revenue of 1983Crores reflecting 3% growth both year on year and sequentially. This performance primarily was driven by improved volumes supported by BET plant utilization and stable domestic demand. Our diversified product portfolio and agile operating model helped mitigate the impact of softer pricing trends across certain categories. On the operational front, Domestic revenue stood at 1,647 crore in Q3 of Q3 FY26 and 4,903 crores for the nine months ended in December 25. Export revenues were 328 crores in Q3 and 864 crores for the nine months period. On a consolidated basis, export Revenue stood at 17% for Q3FY26.
EBITDA for the quarter stood at 219 crores registering a 16% improvement compared with Q3FY25. This growth highlights the benefits of operating leverage, process optimization initiatives and sustained cost discipline. The EBITDA margin improved to 11% compared to 10% in the corresponding period quarter last year. PBT is to do at 151 crores representing a 12% year on year increase. Q3 FY26 PBT includes one time exceptional provision of 12.84 crores under the new labor codes. For the nine months ended FY26 consolidated revenue stood at 5,820 crores. EBITDA amounted to 658 crores and paid 331 crores. The moderation in profitability during the nine month period reflects ongoing pricing pressure and margin compression in select product lines.
We also incur certain one off pre commissioning cost for our new projects. As revenue scales these expenses will be more effectively absorbed. Nevertheless, sustained operational performance and volume led growth supported the overall financial resilience. Now coming to segmental performance. Phenolics for a segment this segment, the phenolics business continued to demonstrate strength and stability during the quarter segment recorded revenue of 1,334 crores and EBIT of 145 crores reflecting a 20% year on year growth in EBIT. Higher cell Solimane ethanol and acetone, Better net raw model realization, Finished roots margin along with process optimization efficiency gains contributed to enhanced operating leverage in Advanced Intermediate.
The segment delivered strong top line growth with Q3 FY26 revenue of 652 crores representing an 18% year on year growth and 11% sequential increase. Growth was driven by higher volumes and improved market penetration. However, EBITDA 15 crores impacted by continued phasing pressure arising from global oversupply, residual inventory restocking and aggressive import competition. Finance cost for Q3 FY26 stood at 11 crores reflecting higher borrowing associated with growth investments, depreciation and amortization expense Is stood at 58 crores. Following capitalization of newly commissioned assets like nitration and hydrogenation, the company’s financial position remains strong providing adequate liquidity and flexibility to fund strategic growth initiatives, results of which shall be visible in the coming quarters.
Working capital optimization remains a priority. Through improved inventory controls, enhanced supply chain efficiencies and tighter receivable management, we strengthened cash flow discipline and improved operating cycle metrics, reinforcing overall balance sheet robustness. Our balance sheet continues to remain robust supported by disciplined capital allocation and prudent leverage. Consolidated net worth stood at 5651 crores providing strong financial flexibility to support future growth and expansion. Capital allocation during a period of firmly incurred sorry Firmly anchored to our long term strategic priorities with accelerated investments across multiple high impact growth platforms, we continue to scale key projects including expanded specialty and commodity chemical manufacturing capacities at Deepak Chemtech limited Alongside mega integrated complex establishing a fully integrated value chain from cumin to folk harmonics and other advanced derivatives.
Notably for the upcoming polycarbonate project, necessary financial arrangement and funding are at final stage ensuring readiness for both capital and balance sheet perspective. These initiatives are progressing as per schedule and are poised to deliver a decisive step change in the revenue diversification, margin expansion and sustainable shareholder value creation. Looking Ahead While near term market conditions may continue to be influenced by global supply and demand dynamics, our integration advantage, cost leadership programs, operational excellence and prudent financial management position will navigate us through this cycle and deliver long term stakeholder value. With that I would now request moderator to open the forum for question as a session please.
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nirav Jamudia from Anvil Wealth. Please proceed.
Nirav Jimudia — Analyst
Yes sir. Thanks for the opportunity and good afternoon. There are few questions to ask so first is on in one of the investor presentation slide we have mentioned that we are in the process of introduction of new products. So if you can share like how many products will be coming up. Where are we in terms of these products with the customers, the user industries or the application and if possible the size of revenue which company is expecting from these products put together.
Maulik Mehta — Chief Executive Officer and Executive Director
Hi Neeraj, thanks for the question. At the moment we have a pipeline of about 15 products at various stages between R and D and piloting and awaiting customer feedback with regards to samples. So the largest segments in terms of applications would be in applications such as mining chemicals, flame retardants, personal care, flavors and fragrances and polymer application.
Nirav Jimudia — Analyst
So are any of these products coming up in first half of FY27 where some of these could be commercialized and we can see some revenue contribution from them.
Maulik Mehta — Chief Executive Officer and Executive Director
So other than the last one which I mentioned which is for polymer applications which requires medium sized capex, the others are all already made at pilot scale. The plant mapping is also done in available assets and the production plan will align with the customer’s requirement plan. So that’s going through its validation cycles including impurity profiling and stability studies. So as and when those things finish, which should happen in the next couple of months, we will then have a plan with regards to production and dispatching. So many of these will come over in the next several months in a staggered manner based on the stage of approval.
Correct.
Nirav Jimudia — Analyst
The second question is on the sodium nitride. So we mentioned that the duties which were there earlier has now been removed. So let’s say before the tariffs in place and post tariffs how much volumes we were exporting before and after the tariffs and which is now got a fair chance to get recouped with the removal of tariffs by the usa.
Maulik Mehta — Chief Executive Officer and Executive Director
So historically for the last couple of years you’re referring only to sodium nitride, right?
Nirav Jimudia — Analyst
Correct. Correct.
Maulik Mehta — Chief Executive Officer and Executive Director
So historically a couple of years when we exported to the US specifically it was to the tune of about 5000 tonnes a year and over the last 8 months this has been at a tariff overhang between anti dumping duty tariffs and other things in excess of about 105%. So now of course the total tariff overhang would be substantially less than that. So we are still engaged with customers to see how we can ensure that we play a vital role in sodium nitrite consumption in the U.S. but our focus is to ensure that we are there to add value rather than reduce value.
Nirav Jimudia — Analyst
Perfect. And the last question from my side is with respect to the FDA with you, because what I could understand from our annual report is that our exports to Europe is substantial, close to around 46% of our standalone business. So with the kind of product profile we are having and the kind of opening up of you, probably from next year onwards, how do you see this opportunity shaping up for us in terms of the current product as well as extension of the current product in terms of the forward integration? And also you can share your thoughts like are we importing any raw materials currently from Europe which earlier used to have a duty? And with this EU FTU had a fair chance of duty getting removed.
Maulik Mehta — Chief Executive Officer and Executive Director
Okay. So Neeraj, you’re well aware that the eu, India FTA requires a ratification by several countries. So what is there is proposed ftea and it’ll take, you know, whatever period of time it takes, six to eight months is what we believe in terms of ratification by I think all the 20 something member countries of the EU along with that. So I would also want to add that whether it is the US or it is Europe or the uk, all of these are unmitigated tailwinds, are all positive for the Indian chemical industry specifically also for Deepak.
That said, like anything else, this was my short answer, but in the long answer there are obviously nuances. For example, Europe does not currently have a very high tariff barrier for Indian products to go there. But it increases the opportunity for European companies, which are currently under a real malaise, to have an export opportunity to India. Deepak will also be looking forward to being able to procure some raw materials from Europe at a price, products, for example, such as cyanuric chloride, where we are dependent on imports. But at the same time you have a mix between this, between the discussion, the bilateral trade agreement with the US which will also have a lot of products imported into India and it will open up certain segments which in my personal opinion India is highly constrained on whether it is in the farm segment or whether it is in the energy segment where Indian consumers tend to benefit the most.
So I’m not getting into government, but I’m talking about the Indian consumer at large really will benefit and that will increase the production and the disposable income of all of the countries that are involved. So I’m not commenting on what happens to government tax and tariff revenues, but these kinds of trade deals where the benefit flows down to the consumer, certainly have the significant advantage that comes to industry, such as the chemical industry, the agriculture industry, the construction industry. So this will have a positive effect. When you look at all of these things put together, if you look at only the EU India trade deal, you will feel like the positive effect is, in my opinion, a fraction of what it will turn out to be given the progress of time.
Nirav Jimudia — Analyst
So just a last clarification. When can we expect the full benefit of nitric acid into our operational numbers?
Maulik Mehta — Chief Executive Officer and Executive Director
So we commissioned the nitric acid plant in the middle of December. This quarter and next quarter will be. The. First period where we would have pretty much 100% consumption of nitric acid. And we also have expanded our nitration and our hydrogenation capacities. Now, I’m sure this question will come up later on, but we had originally, I mean, there were two points where we, you know, where there was a mistiming impact in Q3, where we had only limited control, we anticipated the commissioning of our nitric acid and our nitration assets at the same time. Unfortunately, that did not happen. And the nitration with the ETP assets got commissioned earlier. And the nitric acid plant had some technical challenges in the last mile.
So that got delayed to middle of December, which meant that for that period of time, we took it upon ourselves as a strategic call to ensure that we maximize our market presence, even if it comes at the expense of having to procure raw materials like nitric acid at spot rates. Now this meant that Q3 looked much weaker. We do believe that we have taken the right approach. Similarly, in sodium nitrite, we had an original judgment in our favor in October and we were anticipating the public announcement. But after that, the US went into shutdown for about 45, 48 days.
And this delayed the formal announcement of the judgment. And that’s why it also disrupted our sales planning as we had originally envisaged to the us. So now both of these challenges are behind us and we look forward to with some degree of optimism moving forward. So I hope that it’s a long winded answer, but I hope it also answered your question about nitric acid.
Nirav Jimudia — Analyst
Perfect, sir. Thank you so much and wish you all the best.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you, Neeraj.
operator
Thank you. The next question is from the line of Sanjay Jain from ICICI Securities. Please proceed.
Sanjesh Jain — Analyst
Thank you. Thanks for taking my questions. I got few of them. Molik by first on the standalone business now that we have started, at least for part of this quarter, nitric acid and the margin, gross profit margin or a material margin at 33.6% probably is 1 of the lowest we have seen in last 7, 8 years. Can you help us understand which product category where we have seen a similar significant margin compression? And when you see that we are staring at a favorable Q4, what do we really mean from a advanced material or a standalone point of the business, which are the product category which is showing some green shoots for the Q4.
Thank you.
Maulik Mehta — Chief Executive Officer and Executive Director
Okay, so first of all, the two biggest pinch points that occurred to us, as I said, that we had limited ability to control the outcome. One was the delayed announcement of the anti dumping duty between the US imposition on India. It’s also heartening to just share that the removal of the duty, by the way, is specific for Deepak Nitrite. It is not against. I mean it is not a removal of duty for Indian manufacturers. It’s only for debug. But because we anticipated that the announcement, public announcement, would happen imminently after the judgment was passed and this was in the beginning of October.
So there we had our hopes up. But unfortunately the US went through its own turmoil on this front and that affected our margins. The second point that affected our margins was as I mentioned earlier, when we had our nitration capacities commissioned and our hydrogenation capacities that were commissioned towards the tail end of Q2, it became tactically sound even though it compressed margins in Q3. You will notice that we mentioned even in our discussion that we did have significantly higher volumes in Q3 than in past quarters. So this was done with full knowledge that we were buying the feedstock at spot prices because we were no longer expecting to remain in the market for purchase of products such as nitric acid.
So we had no long term contracts or quantity discounts or such that we were able to apply in our purchase. Nonetheless, we worked hard to see how to ensure that we are occupying a significantly larger market presence. But within the quarter this did hit our contribution numbers.
Sanjesh Jain — Analyst
Got it.
Maulik Mehta — Chief Executive Officer and Executive Director
Finally, one last point is that for Deepak Nitrite, the standalone entity, most of the world, which is going through its own turbulent times as a financial year closing in December, so a lot of customers were also already in a depressed state in terms of their own operating activities and they were more focused on inventory rationalization rather than anything else. All of them also were under the impression that India was going through a period where there were high tariffs, uncertainty about a lot of other trade dynamics. So no one was sure about how to place long term commitments or even medium term commitments.
You look at February and of course the mood is quite different and we have to see how this plays out in the remainder of Q4 and Q1 onwards.
Sanjesh Jain — Analyst
Hello? Yeah, sorry, I think your voice got gobbled in between, but I got the point. Molly Bhai, but just one point on the last, the third point you said on the destocking from the customers worldwide. But we were able to sell a. Far more volume, right? So is that really a reason for us to compress the margin or we place that volume somewhere else at a lower margin? Is that the point you want to drive?
Maulik Mehta — Chief Executive Officer and Executive Director
No, we placed that same product at a higher cost because we had to buy the raw materials which we were otherwise intending to integrate ourselves and manufacture. So our cost of goods became much higher than it should have been in a traditional situation. And instead of being restrained in the supply of our products to the market, we became aggressive in the supply of our products into the market. When I’m referring to these products, the larger markets here are domestic or near domestic. When I’m referring to financial year closures and inventory destocking, I refer more to the European and the US market.
I hope this clarifies.
Sanjesh Jain — Analyst
No, that clarifies, that clarifies. And favorable Q4, what are we seeing? The green shoots there? It’s largely this issue is getting fixed and margins coming back is what we are looking. Or we are looking some green shoots. Even inside of demand.
Maulik Mehta — Chief Executive Officer and Executive Director
We’re looking at margins coming back to a normalized basis because of our integration. But let me also point out that we are working closely with customers on, as I mentioned earlier, some new products. Those are already in the process of being approved. I just want to also share that whatever it is, with regards to trade agreements and all, it is still quite a turbulent environment. So I definitely expect Q4 to be better than Q3. I also want to be cautiously optimistic on this front because whatever happens with regards to India and the Western countries that are traditional markets, it doesn’t change the fact that there is a significant Chinese overcapacity and this will affect a couple of products.
I don’t anticipate that it affects every single one of our products. Maybe many of our products, 60, 70% of our products are not as directly affected by Chinese oversupply. But when this oversupply is there, it does affect our customers. So agrochemicals continues to be a space where there is a marginal improvement in the outlook, but it is not a consistent improvement. It is still A little bit rocky and places where we expect to see an uptick because of these trade agreements are places such as dyes and pigments, mining, chemicals, explosives, polymer applications, food applications, pharmaceuticals, personal care.
Those are places where I expect good improvement which has nothing to do with the Chinese overcapacity.
Sanjesh Jain — Analyst
That’s clear. That’s clear. One question on the agrichemical which you partly touched up.
Maulik Mehta — Chief Executive Officer and Executive Director
Sorry, I just wanted to add one thing in all of this. Of course one thing that remains a bright spot is India’s own growth storage. So any product where such as phenol that is sold in India continues to see robust demand and we remain quite optimistic about the downstream also as we are investing a significant amount there.
Sanjesh Jain — Analyst
One follow up on agrochemical molecule which you touched upon partly if you look at the commentary from the global majors, couple of them have already put out their earnings. They are turning more cautious on CY26 than what we have heard them say six months back or three months back. And even if you look at some of the Indian peers who supply to the agrochemical major have also turned little cautious on the demand side of the particularly on the pricing side. While we look little more optimistic. Is it more product specific that we are looking at or we are looking to diversify or as we, as we have spoken earlier that we are moving up in the value chain, some of those efforts are paying up.
Maulik Mehta — Chief Executive Officer and Executive Director
So it is little bit product specific but it’s also geography specific. So when you look at agrochemicals you’re talking about fungicides, herbicides, insecticides, seed treatment, etc. Etc. So there’s a lot of different applications and weather patterns play as much of a role as over capacity or inventories. So the answer will be different depending on products, product categories, geographies and weather. When you have commentary coming out from a lot of agrochemical majors, some amount of that is also due to inventory stocking, but some amount of that is also due to what they expect to see in terms of geopolitics.
For example. Now in the recent couple of weeks it seems like the US is very bullish on agrochemical, sorry, agriculture exports to India, which has never traditionally been a large importer from the U.S. similarly, you’re seeing that there is at the same time an imbalance between what Brazil is producing and what the US hopes to accommodate on the world stage. So these trade tensions across geographies do continue to play out and for us as an intermediate supplier to these majors, the impact of that is generally seen one to two quarters down the line because our products are eventually going one or two steps down the line to these majors.
Last one point that I’ll just mention on this front is that we’ve also made medium scale investment in the hedge for agrochemicals that is uniquely positioned because it has tremendous value integration with our chemistries and the process that we are following is world’s first. So that basis, its carbon footprint, basis its cost and basis its product quality will remain unmatched in the world for this product or this product category. That will ramp up along with customer allocations on the basis of whatever contractual versus available and that will play out in full for supplies that go on from October onwards for calendar year 27 onwards.
But it will play a role even in the first few months after commissioning.
Sanjesh Jain — Analyst
Very clear. One last question from my side on the phenolic side, generally winter appears to be best for us from the production perspective. And earlier we have optimized ourselves to produce three 50,000 metric ton of phenol. Have we touched that kind of capacity in this winter as well? And number two, post Q3 we have seen a good run up in the prices of phenolics. Should that also make us positive for Q4 on the phenolic side or the spreads for us, even in India are showing the trend? Thank you.
Maulik Mehta — Chief Executive Officer and Executive Director
I want to share something. Today we manufactured our 2 millionth ton of phenol. Congratulations on that. That’s been a. I mean looking back, you know, you focus so much on the months and the quarters that it’s also always good to step back and look at the journey so far in terms of spreads and cracks and synolics, crack versus global cracks and all of those things. We continue to feel quite optimistic about finding new spots for potential debottlenecking. Even in our existing assets we are seeing some degree of volatility both on acetone as well as on phenol.
Some of it may be seen as temporarily positive or temporarily negative. But I just want to clarify that this particular quarter, Q4 is always a quarter where you would expect a degree of volatility. Because China goes in for its New year, customers start looking at their purchase patterns differently because in India you have the financial year closing, you have a lot of capex outlays also based on government investing in construction and infrastructure. So this is a quarter where any answer that I give you will be outdated within the next week.
Sanjesh Jain — Analyst
That’s clear. But from the production perspective, we are hitting that peak, right? Absolutely no problem with that.
Maulik Mehta — Chief Executive Officer and Executive Director
I mean we’ve gone Past what we thought were peaks in the past.
Sanjesh Jain — Analyst
Very clear.
Maulik Mehta — Chief Executive Officer and Executive Director
Thanks Molik Bhai.
Sanjesh Jain — Analyst
Appreciate all the answers and best of luck for the coming quarters.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you very much.
operator
Thank you. The next question is from the line of Arun from Avendus Park. Please proceed.
Arun Prasath — Analyst
Thanks for the opportunity. Few questions. First on the projects that we have started in this quarter can we broadly give a direction say to reach steady State, say 80 to 100% decision how many quarters we will take and how long it will take to reflect in our P and then that’s number one. And second is broadly in the last three years in the AI segment the top line has reduced from say 3000 to crore. Right now we are closer on say 2400 crores of annual run rate. What percentage of this would be purely led by the pricing? If you can give the pricing and volume decline or a growth some broad directions on this.
So that’s on the first question. First question.
Maulik Mehta — Chief Executive Officer and Executive Director
So for all of the capacity, the investments that we have made so far it is largely broken down into I think about 100 odd crores for the R and D facility which is a strategic investment. So we don’t look at operating rates there. Then you have the nitration, you have the hydrogenation, you have the fluorination, chlorination and the nitric acid investment. So on the nitric acid investment, on the nitration and on the hydrogenation we are expecting to run at 100% or close enough to 100% utilization from this quarter onwards there may be between 95 to 100, 105.
That’s the kind of range we look at in terms of asset utilization on these fronts. When we are referring to photochemical chlorination and fluorination that we expect those utilizations to pick up in Q1. And when we talk about the this thing diazitization asset will be commissioned in May that will have a gradual ramp up in line with customer requirements. When we talk about MIBK it will have a ramp up in Q1 in a phased manner because these technologies are extremely unique. So the process that we have invested in, while it is a high capex investment it is probably the most efficient process in the world and it allows us to have some downstream value add products also along with MIBK and MIBC there we hope to have a reasonably quick ramp up because what we did is on mibc we started seed marketing even over the last four months and we’ve seen a good degree of customer interest both in India as well as abroad.
So this asset will allow Us to be able to service the customers where we already have broad degree of acceptance. And finally on the high pressure alkylation asset which will come in around between June and July, that will have a ramp up over between two to three months based on the customer requirement. And with that we will complete the entirety of our phase one of investments. And I’m not referring at all to any small to medium scale up to about 100 crores of investment which are in the bottlenecking assets.
Arun Prasath — Analyst
Understood? That’s understood. Just one additional information on this if you can. Also at current prices, what would be the statistic revenue that we are talking for these production blocks at a cumulative basis? It will also be helpful. And on my question on that AI segment, 3,000 to 2,500 quotes, the volume and pricing breaker, if you can address that, I would say.
Maulik Mehta — Chief Executive Officer and Executive Director
Yeah, we can certainly drill down into that. Arun, just to once again just clarify, about half of the investment that we’ve made which was into things like nitric acid production. We don’t anticipate any revenue. This was always clarified as an upstream integration.
Arun Prasath — Analyst
Agreed? Agreed, Understood.
Maulik Mehta — Chief Executive Officer and Executive Director
And EBITDA improvement of substantial EBITDA improvement into the AI business when we refer to products such as MIBK, MIBC and the Nitro Aromatics. I think on MIBK MIBC the right time to talk about it will be Q1 because Q4 is the period of commissioning and there is an oversupply right now in the market. But at the same time India is entirely import dependent. The entirety of the market that we seek to service for MIBK is in India and we have what we believe is the most efficient process of converting acetone to MIBK in the world.
We have to see how this plays out with regards to overcapacity in China versus our efficient plant processes. But it is an integration story. So I’ll refer to revenue coming from this only in Q1. With regards to the number that we spoke about in Q3 in the advanced intermediate segment, I would say that at the very moment substantial amount of this is because of pricing, not so much because of volume. There is some volume impact because of key agrochemical intermediates, but there is more than that. I would say a pricing impact because of the oversupply situation from China.
Arun Prasath — Analyst
Understood. On the hydrogenation, nitration and chlorination blocks that. Yeah, photo chlorination blocks already started. Any ballpark revenue at the current pricing?
Maulik Mehta — Chief Executive Officer and Executive Director
No, no. Just to clarify, the photochemical chlorination will start towards the end of this quarter. The fluorination which we have commissioned will right now it is just doing all batch plant run for key intermediate switch customers, but it will be more of a steady state thing. So these two are generally looked at together and we’ll refer to the revenue at that time because we’re also currently in conversations with key customers about these particular assets. So I want to give the teams the opportunity to. Optimistic or cautiously optimistic or whatever.
Arun Prasath — Analyst
Maybe we’ll get the updates from you probably from next quarter. My second question is on the Europe fda see in polycarbonate we have very high aspirations and Covestro is the market leader there and probably does it. This Europe gives Covestrous the slight advantage in taking over, in competing against us in the markets like India. Does it negate the India, I mean cost of cost benefits in India, especially in a, you know, highly grade specific products like polycarbonates?
Maulik Mehta — Chief Executive Officer and Executive Director
I don’t believe that it does, frankly. I believe the kind of investments that are taking place in India for consumption of polycarbonate resins and compounds. When we first envisaged this project, we were looking at India’s import dependency of about 2 lakh tonnes a year of polycarbonate resin, not even the compounds. So when Covestro exports, they generally export the compounds. And I’m referring to the resin itself, else that is imported that was I think just about a year, year and a half ago. And right now India has already been importing in excess of 300,000 tonnes. So just within a year, our estimates of what India’s domestic requirement of polycarbonate resins has changed by a factor of 50%.
We are planning on coming online with this asset over the next two and a half years in an integrated fashion with propylene, phenol, BPA and then polycarbonates. So we believe that the resilience of this integration as well as the investments that are taking place in India for the consumption of the resin, as well as our earlier investment also into the compounding piloting facility. To work in partnership with companies such as Covestro, such as Sabic, such as Trincio itself, will help us be very relevant in India’s consumption of the resin as well as the compound. So we don’t anticipate this or any other trade deal to really derail the advantage of having an integrated chain in India.
Arun Prasath — Analyst
Right on Phenom. Also, if you see European players are operating at a very low operating rate because they couldn’t sell to the Chinese when the Chinese started their plan. So 10 percentage swing is so large because it’s a duty now shouldn’t, should we be worried in phenol also? Because at least in phenol the market is large in India and import is still coming. So should we see some step up or restarting of the European phenol operators to dump in say India?
Maulik Mehta — Chief Executive Officer and Executive Director
I don’t think so. Frankly speaking, India already imports a certain degree of phenol from Asian countries where it is made more cost effectively and it is supplied here. I mean, if you know, if a place as close to India as Singapore decided to permanently shut down its phenol manufacturing, I don’t anticipate that the removal or reduction of an import duty. And by the way, Singapore is a duty free import into India and if, sorry, I am mistaken, it is a 5% import, but it is negligible. To be honest, if it could have survived operating in Singapore conditions by exporting to India, it would have.
I don’t anticipate any inflow of any substantial amount of phenol coming from Europe to India. However, I do anticipate with all of these free trade agreements and all that and improvement in the consumption of phenol itself in Europe where there will be a gradual recovery of downstream consumers such as automobiles. So when that happens, it is good for everybody. But at the same time, the way that Chinese investments have been taking place over the last couple of years now are starting to alarm even the Chinese government. So they are putting all sorts of inflation control measures, deflation control measures in place.
So what happens with regards to trade deals is to be looked at in my opinion personally from the chemical industry in pretty much a positive light. What happens with regards to China’s attempt to reign in its deflationary cycle because of its overcapacity is to be looked at in an entirely separate lens. And there is no real reason to conflate these two understood.
Arun Prasath — Analyst
Any Chinese capacities coming this year, new capacities coming this year in phenol.
Maulik Mehta — Chief Executive Officer and Executive Director
Last year, the year before that, the year before that, this year, next year, every year. Traditionally we don’t. India has not traditionally been in the past. Even with the kind of overcapacity, even with the physical proximity of China to India, India has not really been the destination for Chinese.
Arun Prasath — Analyst
No, no. But it does depress the spreads, right? If there is a suddenly higher capacity is there and people who are sending to Chinese couldn’t sell there, they obviously bring down the international prices. So that’s point of view of my questions.
Maulik Mehta — Chief Executive Officer and Executive Director
I mean look, we may find, we may end up finding some volume coming. It’s an ocean, right? So material flows Happen the way that they happen. We have to be resilient no matter what. But just want to share that this is not a new phenomenon. This has been taking place since we commissioned the project, since we conceptualize the project and it will remain always. In the meanwhile, we have to see whatever we can do to be as internally resilient as possible. Even in the last couple of months there has been announcements about Sari station capacities shutting down permanently this year.
Right? So this is. There is in Singapore an announcement of a shutdown in the Far east and announcement of a shutdown in China the announcement of capacities coming in. Capacities that may be constrained because of the government’s campaign. In Europe, capacity is being brought down permanently. So this is a very dynamic situation.
Arun Prasath — Analyst
One book pitching question for Sandeep or Sandhaji. We have seen the standalone revenue, reported standalone revenue and reported AI segment revenue closely matched in the past afflict in last two quarters. There is some difference. Small but. But still this differences keep increasing. So how should we. What should be the reason for this, sir? Difference in what?
Arun Prasath — Analyst
Difference in reported standalone revenue versus a segment revenue and as well as the EBITDA. This is because of the inclusion of deeper ChemTech AI related business into the Nitrates AI segment. But Sanjay Bhai, segment revenue is lower than the standalone revenue and EBIT is also lower than the standalone ebit.
Sanjay Upadhyay — Director Finance and Group CFO
So there are other incomes also because of that.
Arun Prasath — Analyst
Okay, so so segment debit includes other income for the respective segments. That is what you are saying. So priori will improve that. Whereas this is not there in the a. If. Okay, I can call you on Monday and discuss.
Arun Prasath — Analyst
No problem sir. No problem sir. We will do it separately. Thank you very much. And Maulik, thanks for answering all the questions all this.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you Arun.
operator
Thank you. The next question is from the line of Tushar from Omega Portfolio Advisors. Please proceed.
Unidentified Participant
Yeah. Good afternoon sir and thank you for the opportunity. I just wanted to know the new products which are coming up like 1015 product. Firstly, the competitive scenario in India and in that specifically the application of mining and explosive and the polymer one. So our right to win in this segment. Your view on that sir? On the mining, the explosives and which segment? Polymer, polymer 1, 2, me PPDA.
Maulik Mehta — Chief Executive Officer and Executive Director
Okay, so first of all on all of these we do have an extremely strong right to win because we, you know, we manufacture all of these in an integrated fashion. The teams are already working along very tightly along with customers to see how there is a significant value addition that Deepak is able to provide to customers. So for Example, one of the applications which has turned out to be a significant one in terms of volume in India is the explosive segment. So products such as trinitrotoluene, which seem to be in very high demand all over the world for their mining applications as well as the defense applications applications.
So Deepak is a strong partner to these applications and these customers. And there’s a very high degree of, I wouldn’t call it dependency. There’s a very high degree of collaborative partnership where the technical teams of both sides work hand in hand to see how to improve the performance to make it meet and exceed military grades at global standards. So this is something which has actually transpired over the last year. We expect to see the outcome of this over the next three months, six months, whatever, as it picks up. Because the kind of investment that’s going here is very major, not at our end, but at our customers end.
In terms of other mining chemicals, as I’ve mentioned, we already started seed marketing products such as mibc and that has also been received very favorably. But we’ve been waiting for our main plant to come up so that we can start manufacturing volumes in line with customer demands. So we will see how that progresses. And I should have good feedback to you. But rest assured, the market across geographies is looking forward to the Deepak value and volume addition here. Finally, when it comes to certain other segments where you have energy, things like heat treatment and things like that, again we’re working along with customers.
We are bullish here. We were more bullish a couple of years ago when global industrial policy also encouraged more of these investments. But lately between the US and other regions, they have deprioritized these. That said, our product quality is excellent, it’s been received well and there are still good customers in these segments. Not so much yet in India, but in other regions. And we’re working with them. So this is something that we expect to see landing in somewhere over the next six months. Until then, these will be small scale volumes.
Unidentified Participant
Fair enough, sir. And so this Chinese white rebate removal and the Chinese anti revolution stance. So there are some companies from India supplying intermediates to global giants. They said that the prices has improved. Adjusting that VAT rebate thing, do you see that for our product basket?
Maulik Mehta — Chief Executive Officer and Executive Director
Some we see that there is an anticipation of improvement. In others, these are still ongoing conversations. Very often what ends up happening is that the final action that the Chinese government takes may be a version of what it has announced it will work on. And it will also be based on how rigorously it kind of follows through. I think this month you will also get their five year strategic roadmap, I think the 15th five year plan, let’s see how much it features into that. Until then these are all conversations which are more intent driven rather than on ground reality.
Unidentified Participant
On the phenolics run, the major laminate players in India have been increasing their capacity and major companies capacities are on stream as well. So do you see a place where you know, you might go for a phenol debottle making or some, some capex in case if the polycarbonate plan, you know, get a little extended.
Maulik Mehta — Chief Executive Officer and Executive Director
We continue to remain vigilant about the bottlenecking opportunities. Even right now we’re seeing how we can do a little bit more, a lot bit more even in the existing site. But in the meanwhile to be very clear, the second phenol plant that is coming in will have some amount of its product being consumed internally for polycarbonates and some amount of it will be placed outside for market sale. So we expect to remain as relevant as a percentage of India’s consumption as we are right now. So if the current phenolics consumption in India’s requirement is let’s say I think 55 to 60%, we’re working hard to ensure that it remains that moving forward.
Unidentified Participant
Last question you mentioned in the standalone business kind of raw material, you got it from the spot market. So in case, had there been the case, if you’re procured internally, what would be the gross margin distance to that?
Maulik Mehta — Chief Executive Officer and Executive Director
I, I don’t want to speculate but in, you know, in the Q2 con call I had sounded quite upbeat about our Q3 performance. You can assume that the delta between how upbeat I was and what it turned out to be would be an accurate reflection of the gap between having our own self consumption versus buying it at spot rates. So the rate that we ended up buying these raw materials was obviously higher than we would have procured if we were not investing in our own asset. And if we continue to buy large volumes with discounts and contractual agreements in place.
Fair enough sir.
Unidentified Participant
And sir, in the polycarbonate business we are working with.
operator
Sorry to interrupt sir, please rejoin the queue as there are more participants left in the queue. Thank you. The next question is from the line of Pranita from Morgan Stanley. Please proceed. Hello sir. Thank you for this opportunity. I had two questions, one on advanced intermediate. So taking into account the anti dumping duty withdrawal as well as the the US India deal and the EU deal, could you give us some color on the outlook of this segment going forward.
Maulik Mehta — Chief Executive Officer and Executive Director
The outlook of segment four.
operator
Advanced Intermediate would be better.
Maulik Mehta — Chief Executive Officer and Executive Director
So as I mentioned earlier, we are cautiously optimistic. Be better than Q3. Q4 will also be where you have the performance looking better from middle of the quarter rather than the beginning of the quarter. And Frankly I think Q1 will be continue in that positive direction. Q4 will be better. Q1 will be better still.
operator
Okay. Sir, on the follow up on the initial question, when you answered on the sodium nitrate, I didn’t get the amount of the current exports. What we do to us in terms of sodium nitrate you said around 5ktpa is what we used to do a few years ago.
Maulik Mehta — Chief Executive Officer and Executive Director
No, no, no. I said for the last few years we’ve been doing five kilograms.
operator
Okay, okay, I’ll try that.
Maulik Mehta — Chief Executive Officer and Executive Director
Anti dumping duty, even when there was a 50% reciprocal tax on Deepak, sorry on India, so the anti dumping duty was specific on sodium nitrite and the reciprocal tax was on all Indian except exports to the US we were operating in regime where it was about 100 and 506% total gap between the X factory price here and the price within the US for depux sodium nitride. That will be significantly reduced now because the anti dumping duty has been reduced from whatever that 45, 48% was to essentially zero. The countervailing duty continues to remain as it was, more or less, I think 3, 4, 5%, something like that.
And then you have the 18% reciprocal duty as against the 50% reciprocal duty. So the delta as you can see is down from about 106. So it is certainly heartening use for Deepak nitrite in particular. And we’re still working with customers to understand, you know, what the near term and the medium term looks like both in volumes as well as in value.
operator
Thank you. So that was a detailed explanation. I had another quick question on phenol. Does the company get a premium pricing to the benchmark market pricing on phenol and acetone?
Maulik Mehta — Chief Executive Officer and Executive Director
The answer is not universally yes. In some segments it does because our quality is superior and 100% it is superior compared to the commingled phenol or acetone that is imported into India. We have also, of course recent development has been that we have also started selling pharmacopeia grade acetone small volumes. This is a beginning and we see how to ramp this up moving forward. But in terms of the premiumization of the product, it is very relevant one. And in some segments I would say that our phenol is over specced so we don’t really get any value premium for that.
The premium that we get with regards to our physical proximity to the customers, our ability to supply to them in different packaging types, drums or tanks or IBCs, all those kinds of things. And as well as having really strong customer relationship and dealer network. So the premium that comes is the premium of convenience in most cases. And in some applications customers do pay a justifiable premium because they require a higher quality and we supply a higher quality.
operator
Thank you sir, that was super helpful.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you.
operator
Thank you. The next question is from the line of Rohit Nagraj from 361 Capital. Please proceed.
Unidentified Participant
Thanks for the opportunity. So first quick question on polycarbonate facility. So based on the current status of the project, when is the facility likely to be commissioned?
Maulik Mehta — Chief Executive Officer and Executive Director
Hi Rohit. We gave certain anticipated timelines. Plus minus, couple of months. It is basically aligned with that. So I think December is what we had. Sorry, December 27th, my mistake, my mistake. I’m getting lost in these days. But December 27th is when we had talked about being on stream. One second, sorry, December 20. Yeah, so we’re roughly about. Okay. If there is any delay on that, we’ll let you know. But so far all the activities with regards to site dismantling at as well as site construction works at in the Hill, both of those things are progressing.
This of course very delicate execution where you have to get those assets here properly and meanwhile you have to have these assets built here and you’re doing this in partnership with the equipment and technology supplier where they will also be an anchor customer. So they have an inventory that they have to keep drawing down until our asset starts on stream again. So we’re you know, working to see how we can manage this as well as possible.
Unidentified Participant
Right.
Maulik Mehta — Chief Executive Officer and Executive Director
Sorry, Go ahead.
Unidentified Participant
Yes sir, please go ahead.
Maulik Mehta — Chief Executive Officer and Executive Director
Okay. On the second CNOL plant that is coming online along with the upstream propylene at PLL Petronet so that we have delinked it from the polycarbonate asset. If they all happen along the same time, no problem if there is a misalignment. Also we have worked with the assumption that there will be a misalignment and we’re going with that production schedule.
Unidentified Participant
Sure. And second question is on the advanced intermediates. So given that probably some products where there is continuous oversupply and because of which the pricing margins are under pressure, are we recalibrating some of the products lake to focus more on better margin products or something new where the valuation can be there? Thank you.
Maulik Mehta — Chief Executive Officer and Executive Director
While we’re doing new products, we prioritize in Q2 and Q3 on the assumption that we need to see how to maximize in line with our assets which have been debottlenecked. The new investment that has come in, we have a familiarity with the market and we have a nitric acid plant being commissioned. And our anticipation originally was that all of these are going to happen around at the same time. In fact, the nitric acid plant would be commissioned a few weeks earlier than the nitration assets. So our first priority and target was no matter what happens, let’s make sure that we are being aggressive with market presence here, even if it comes at some short term price drops because we want to be significantly higher in line with our upstream investment.
So that was a plan. It was a good plan. Unfortunately, because nitric acid got delayed in its commissioning, even you know, during that period where it was being delayed. We did deliberate on this and we believed that the right thing to do was to remain the course, continue to see how to ensure that we are aggressively utilizing our recently commissioned and existing assets. Place the product in the market, even if it comes as a short term impact on price.
Unidentified Participant
Sure, that’s helpful. All the best and thanks.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you.
operator
Thank you. The next question is from the line of Sanil Jain from Ambit Capital. Please proceed.
Sanil Jain — Analyst
Hi sir. Thank you for the opportunity. So I just have two questions. So the first one is can you let us know the capex outlay for 26 and 27? Okay. Sunil. 2500 crores. 2500 crores for FY26. FY26, 26, 27, not 26, 26 is already ended. So that is around 100 crore spending. So around 12 to 1300 crores. Okay, okay, understood. And the second question is that if we see the phenol spread, they have declined sequentially. But if we see the gross margin of the phenolics business, then the gross margins have improved by 150bps sequentially. So can you help me understand the disconnect like between the spreads and the gross margins?
Maulik Mehta — Chief Executive Officer and Executive Director
The spreads that you are referring to are the international indexes. Yeah, yeah. And what crack you refer to? And in terms of our margins, one element of that is that in India there is an increased pressure also on suppliers. So we have been able to see that our raw material procurement and our FG pricing, the cracks there are slightly different compared to global cracks. And secondly there is a value add that comes from increased capacity utilization which allows you to iron out more and more of the potential inefficiencies that you consider into what you calculate as a crack in other companies.
Sanil Jain — Analyst
Okay, so what, what will be the utilization rate for the phenol canal business?
Maulik Mehta — Chief Executive Officer and Executive Director
I think we’re at a good significant utilization rate. We’re trying to work through some debottlenecking exercises and we’re trying to align that in time with what we wouldn’t traditionally have as shutdown periods for regular inspection of things like boilers and all that. So there’s no specific number I can give you. That number passed a long time ago.
Sanil Jain — Analyst
Okay. Okay, Understood. Thanks. That’s all from my side.
Maulik Mehta — Chief Executive Officer and Executive Director
We have some room between where we are and where we can be and we continue to investigate other opportunities for further debottlenecking.
Sanil Jain — Analyst
Understood. Thanks. That. That was quite helpful. Thank you.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you.
operator
Thank you. The next question is from the line of Krishan from GM Financial. Please proceed.
Krishan — Analyst
Yes. Hi sir. Thank you for taking my question. I’m not sure if you have already answered it. So, so sorry for the repetition. I just wanted to understand couple of things. First, what has led to the delay of close to two years in commercialization of our MIBK and MIBC project?
Maulik Mehta — Chief Executive Officer and Executive Director
Krishan, first of all, it hasn’t been a delay of two years. There has been a delay. No doubt about it. We honestly, if I’m being very frank, we attempted something which generally is not practiced in the chemical industry. So worldwide, I think we would be the only chemical company in this kind of chemistry where we decided to go ahead with a divided wall column saying that India is inherently disadvantaged against places like China when it comes to energy cost as well as energy quality in terms of power and the steady state availability of energy. So we went ahead with a technology which is new to this space.
We put a lot of our own engineering hard work into that. And in the construction of this technology, there were a lot of, you know, hiccups that took place. Luckily they’ve been ironed out, but it ended up taking longer than it should have. In line with that, what we hence therefore did was we started seed marketing of the downstreams of MIBK earlier. So this was one of the areas where we had a delay. On the other hand, the second place where we had a delay is where we said that look, there is this Chinese overcapacity.
There is a situation while the plant is taking its time being constructed with these technical hiccups, what can we do with regards to further optimizing on certain things like the catalyst? So we’ve been working to see how we can Improve on that front, improve the recyclability, improve the cost. Those fronts, our original schedule was, it was ambitious.
Krishan — Analyst
Okay, perfect. No, so I think I understand where you’re coming from. It’s just probably technical delays but it would have been helpful if you know, or probably in the, in the future it would be helpful if you could probably indicate that, you know, this is probably a tentative timeline, not the exact timeline maybe. So you know, that way there is some bit of a buffer for building in those numbers. So that was one point suggestion. Secondly, Malik Bhai, you mentioned that in the AI segment is a pricing pressure which has led to kind of a subdued performance.
So does that mean that your volume growth could have been almost like similar to 20% yy growth that you have shown in the AI segment this quarter?
Maulik Mehta — Chief Executive Officer and Executive Director
So I want to just clarify. I think partially the pricing pressure and the margin pressure, to be completely honest, were a little bit self inflicted as I mentioned earlier because we decided tactically to be aggressive in placing our product in the market. That would allow us to also ensure that as usual if there are any technical hiccups or this and that in newly commissioned plants they get ironed out as you’re making it. Ensuring the quality is the right quality, placing it in the market. Certain small challenges, for example would be things like the ETP running as efficiently as it needs to be, product being supplied in, drums versus tankers versus other SKUs.
So some of these things get ironed out when you commission. And we decided to be a little bit aggressive post commissioning even before the upstream integration was commissioned. So that is where we ended the quarter. If I look at this quarter and the next few quarters our job will be to ensure that we maintain our market presence now that we have our upstream integration and we see whatever we can do to improve the prices where it doesn’t look like as a key supplier we are in such a hurry to push these volumes out there, we were maybe over aggressive because we wanted to ensure that our quality matches and even if it is with a discount, this and that.
Now the customers are satisfied with the quality and the consistency of our supply. We work with them to see how we can over a period of time optimize on pricing. I want to clarify that this is not something which is across the board. This has been in certain products. Key amongst these, for example would be a product called paranitrotoluene which is made as an isomer and it was anyways a soft market. I think by increasing our production and supply to the market we may have Softened it a little bit more. We’ll work to see how we can improve the margins over and above the margin expansion that comes from the integrated raw material.
Understood.
Krishan — Analyst
And lastly if I may. So have we started manufacturing you know, BTF from BTC and consequently you know we started using the nitric acid in house. So at which stage are we and you know, will those benefit our AI margins to improve going forward?
Maulik Mehta — Chief Executive Officer and Executive Director
Okay Krishna, just to clarify, BTC is made by the photochemical halogenation of toluene. BTF is made by a Hallex replacement of those three chlorines into three fluorines. There is no nitric acid consumption there.
Krishan — Analyst
However I meant separately like BTC to BTF requires hf.
Arun Prasath — Analyst
Right.
Krishan — Analyst
So I first point was that whether you have started the fluorination and the nitric acid for the other other reactions, let’s say probably metamino benzotrifluoride right. Mabtf you would use their there or maybe before creating TF map somewhere or for the other products also. So that was the whole question.
Maulik Mehta — Chief Executive Officer and Executive Director
Okay, first of all amazing clarity on the product profile. I really have to commend you there Krish. And the second point that you mentioned with regards to BTC to BTF as I mentioned I think a couple of questions ago was that this will come online in Q1 while the asset for fluorination has been commissioned I think about a year or year and a half ago there were challenges with regards to getting the right quality of the btc. I hope that you know as we’re speaking right now and in the next month those gremlins will have gone out of the System and from Q1 onwards we anticipate either BTC to BTF or other products which have the exact same chemistry.
So instead of toluene you just replace toluene with something else. Those will feature in and they will continue to have the nitration reduction and downstream assets also being consumed for the same thing. So we have a degree of multi product flexibility, same process, multi product and nitric acid is something that we have been already manufacturing from the middle of December onwards. And as I speak I think about close to about 100% of our requirement is already made ourselves. 100% and there is over the next couple of months we’re still seeing that there are opportunities to debottleneck both the nitric acid as well as the nitration assets.
Krishan — Analyst
Fair enough sir. Thank you so much for patiently answering my questions and wish you all the best. Thank you.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you.
operator
Thank you ladies and gentlemen. That was the last question from the participant. I now hand over the conference to management for closing comments. Over to you, sir.
Maulik Mehta — Chief Executive Officer and Executive Director
Thank you very much and look forward to speaking with you for the Q4 results, conference call and every opportunity to speak to you in the interim. Thank you.
operator
Thank you. On behalf of Debug Nitrite and IISL Capital Services limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.