DMCC Speciality Chemicals Ltd (NSE: DMCC) Q2 2025 Earnings Call dated Oct. 30, 2024
Corporate Participants:
Bimal Goculdas — Managing Director and Chief Executive Officer
Analysts:
Abhishek Mehra — Analyst
Harsh Sethia — Individual Investor
Ankit Gupta — Analyst
Jeevan Patwa — Analyst
Sajil Kapoor — Analyst
Rohit — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY’ 25 earnings conference call of DMCC Speciality Chemicals Limited hosted by TIL Advisors. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Abhishek Mehra from TIL Advisors. Thank you, and over to you, sir.
Abhishek Mehra — Analyst
Thank you, Sejan. Welcome everyone and thanks for joining this Q2 and H1 FY ’25 earnings conference call of DMCC Speciality Chemicals Limited. The investor updates have already been uploaded on the stock exchange, company website and emailed to you. In case you do not have a copy of the same, please feel free to reach out to us.
To take us through the discussion we have with us from the management team, Mr. Bimal Goculdas, Managing Director and CEO; Mr. Sunil Goyal, Chief Financial Officer; Mrs. Sonal Naik, Company Secretary and Compliance Officer; and Mr. Dilip Gokhale, Senior Executive Vice President.
We’ll be starting the call with a brief overview of the business and the financial performance in Q2 and H1 FY ’25, which will be followed by the Q&A session. I would like to remind you all that everything said in this call reflecting any outlook for the future which can be construed as a forward-looking statement, must be viewed in conjunction with the risks and uncertainties that the company faces. These risks and uncertainties have been mentioned in our annual report.
With that said, I’d now like to hand over the call to Mr. Bimal Goculdas. Over to you sir.
Bimal Goculdas — Managing Director and Chief Executive Officer
Thanks, Abhishek, for the introduction. First of all, good afternoon to everyone. Thank you for joining this call. My name is Bimal Goculdas and I’d like to start by giving you a brief overview of the quarter’s business and then I will open up to any questions that you may have.
As you have seen from our published figures as well as our update on the website, it’s been a better quarter compared to several of the past few quarters. We had a top line of about INR103 crores and an EBITDA margin of about 15%. And after considering expenses, we had profit before tax of INR8.5 crores and the profit after tax of INR5.8 crores. So these numbers are substantially better than the previous quarter as well as the same quarter of the previous financial year.
So most of the increase has been due to increased volumes and improvement in the boron business. The only segment which has really not performed well is the overseas business. So exports, we’ve seen slowdowns and there are multiple reasons for this. I think all of you are reading what’s happening in Europe and the slowdown in Europe has drastically affected our export sales. We don’t know when this will recover and whatever we are reading in published articles is that the pain will continue for some time.
So, the domestic business has been good, both the commodity side and the specialty side. We’ve had volume growth as well as price growth. The raw material supply situation has been stable and we have had — in spite of all the problems due to the Middle East conflict, we do have increased freight and things like that, but we are able to pass on the cost in most of the cases.
So, we are — I don’t know whether this can be taken as a quarter which is a representative quarter for the future. As you all know, I refrain from making futuristic projections, but it’s been a relatively good quarter and I’d be happy to answer questions based on this.
I think with that I’ll open the floor to questions that you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. [Operator Instructions] The first question is from the line of Harsh Sethia [Phonetic] who is an individual investor. Please go ahead.
Harsh Sethia
Thanks for the opportunity, sir. Greetings of Diwali and congratulations on a relatively good set of numbers. I understand that you refrain from giving guidance, but if you could help us understand whether the performance of this quarter is more to do with the bulk piece of our business versus the specialty piece or — like, where have we seen more improvements? Is it the sulfuric acid pricing which has sort of helped the EBITDA margins of this quarter or is there some other reason for it as well?
Bimal Goculdas
Thank you. Was that the only question or do you have anything further?
Harsh Sethia
I have a few follow-ups as well.
Bimal Goculdas
Okay. So, would you like me to answer this first?
Harsh Sethia
Yeah, that would be great.
Bimal Goculdas
So, basically it’s been across the board, we’ve had increases not only in pricing but also in volumes. So, it’s across the board except for the export market of speciality chemicals. So we’ve seen the boron business grow, we’ve seen the commodities grow and we’ve seen the domestic speciality business grow as well.
Harsh Sethia
Okay, so you have been talking about the improvements in boron business. I think even last quarter you made some commentary on that. So, how sustainable is this? And I think within boron also you have further downstream products. So, are those products improving or what is sort of driving this change in the boron business of late?
Bimal Goculdas
So, as you are aware, we had done some debottlenecking in the boron business. So we have more product available for sale and the market has improved as well. At the same time, we are developing downstream boron products so as not to depend on just the commodities, AND there we’ve had some success, but we believe that there is a lot of scope to grow in that in the future.
Harsh Sethia
Okay. So, of our roughly INR100 crore, INR103 crore Q2 top line, what would be the rough boron contribution this quarter?
Bimal Goculdas
So as mentioned earlier, while we don’t give a breakup of individual product wise or anything like that, I’ve mentioned earlier that we expect, you know, as we grow the boron business for existing products, we would reach between INR100 crores to INR125 crores on an annualized basis, and we believe we are close to that.
Harsh Sethia
So, roughly INR30-odd crores each quarter.
Bimal Goculdas
Yeah, we would be close to that, yes.
Harsh Sethia
And is there, since you mentioned scope for growth in boron, so do we have the required capacity or would we need to make further investments in the boron investments in the boron piece to deliver on that growth?
Bimal Goculdas
So, we don’t foresee the need for any significant investments at this time.
Harsh Sethia
Okay, understood. Understood.
Bimal Goculdas
There could be some debottlenecking exercise but nothing significant.
Harsh Sethia
And would that go for the sulfuric — sulfur chemistry business as well? That would have the required capacities currently even in the downstream part or would we need to make any debottlenecking investments or anything like that in the existing current financial year?
Bimal Goculdas
Yeah. Currently, we have no major investment plans. We have the assets on the ground and we have capacities in our multipurpose facilities as well. So, we don’t envisage any significant investments.
Harsh Sethia
Okay, so since we wouldn’t have any incremental capex for the foreseeable future, can you sort of highlight what is the quantum of debt we would be looking to repay depending upon our cash accruals in coming one or two years?
Bimal Goculdas
So, in general, again I won’t talk about what we plan to do in the future, but what we have done in the past one year is repay roughly INR2 crores per month, okay. And if our cash flow improves, we can repay more. But with our current cash flow also we have been able to do this.
Harsh Sethia
Understood. Understood. One more question sir, I had was on, I think the agrochemical part, you have mentioned that, that customer segment has sort of been, I think indulgence for the last two odd years. But if we look at the recent, I would say performance at least of the Indian listed players in this industry, there has been some relief in this segment in the last two quarters. However, our commentary or outlook for the agrochemical piece of the business has not really changed. So, are we supplying more to foreign clients or can you explain this anomaly?
Bimal Goculdas
Yeah, you’re exactly right that our overseas business which we’ve lost is mostly in the agrochemical space. And we haven’t lost it to any competitors, we’ve lost it because the market has gone. And domestically, yes, there is an improvement in volumes across the board which includes some agrochemical companies as well. But overall, internationally we still see not good numbers even from the big multinational companies.
Harsh Sethia
These are mainly European players?
Bimal Goculdas
Yes. Yeah, but they’re multinational, so they’re present in multiple geographies.
Harsh Sethia
Understood. And one last bit, if I could Squeeze in, on the new product development of the research side. So, last two years have sort of been very challenging for the overall chemical industry and for us as well. So, within this time, have we sort of focused on adding any, I would say downstream products or have we sort of commercialized any products which, when the cycle turns, could drive the mantle for growth for two, three years? So, do we have the required pipeline to sort of deliver, and this is like a two, three year window I’m talking about, not quarterly.
Bimal Goculdas
Yeah. The answer is yes, that we have continued to invest in process development and we are — we believe that we selected the products which we would be globally competitive and we are bringing them to market, but it’s still not made a significant impact on our bottom line yet. And we hope as the market development continues, that will change.
Harsh Sethia
So these new products would be in the existing customer segments only, like agrochemicals or whatever other segments they have been working with or is there like a sunrise sector or an emerging sector that you’re looking to supply to?
Bimal Goculdas
So these are not new sectors entirely, but they are new end markets for us.
Harsh Sethia
Okay. Okay sir, that’s it from my side. Best of luck. Thank you.
Bimal Goculdas
Thank you.
Operator
Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Yeah. Thanks for the opportunity and congratulations for a…
Bimal Goculdas
Could you speak a bit louder please?
Ankit Gupta
Sure. Thanks for the opportunity and congratulations for good set of number after a long time. So sir, just wanted to understand, we are one of the few companies in the chemical sector which has — which is showing some signs of turnaround. So first question is, basically in your opening comment, apart from the volumes that you did allude about increasing, increasing pricing also actually is pretty rare nowadays in most of the chemical companies. So if you can elaborate a bit on, have we seen…?
Bimal Goculdas
I can’t understand what you’re saying?
Ankit Gupta
So, what I was saying is like, apart from the volume growth, we did talk about improvement in price realization during the quarter. So if you can elaborate a bit on that like have the prices bottomed out for our products and how much price increases have we seen in this quarter for our products?
Bimal Goculdas
So while we monitor of course individual product prices, we don’t share them publicly. I don’t think that’s in our interest to do. But, again, in the commodities, we can’t see whether it’s bottomed out or not bottomed out or going to change or what because it’s really not in our control, and these things do change rapidly. So, what I can say is that in this past quarter, there has been a good growth in price as well as in the volumes and we believe that there is a recovery in demand compared to what we have seen in the past few quarters.
Our hope is that this demand increase is sustainable and it’s coming from a systemic increase in product requirements, not just some short-term changes in stocks and all that, which is yet to be seen. So let’s watch for a couple of quarters and see what happens. While we have positive indications, ultimately we have to see how long this lasts from the market side.
Ankit Gupta
Sure sir. So, any — apart from hydrochemicals, which has — which is still undergoing tough times, which sectors you are seeing growth for us, leading us to increase in our demand for the products. If you can talk about some of the sectors which are leading to the growth?
Bimal Goculdas
No, all others are doing pretty well. If you look at pigments, if you look at fertilizer volumes, if you look at paints, if you look at polymers. So, in general, all other sectors have now picked up and it’s been much better than the past several quarters. I can’t think of any other sector which is really still a drag.
Ankit Gupta
Okay.
Bimal Goculdas
And as mentioned in the previous question, domestically we have seen some traction in the agrochemical sector as well, but international is the real problem.
Ankit Gupta
Sure. Okay. Okay. And sir, on the boron side, you’re almost touching optimal revenue given our installed capacity. So any plans to, like you alluded about doing debottlenecking for — on the boron side. So post that debottlenecking, how much incremental revenue can we see or how much total revenue can we see from post debottlenecking exercise?
Bimal Goculdas
So let’s see when it happens because one is, we can do the exercise, but the market has to also accept the product. And our focus will be not on just selling the bulk products but in developing downstream molecules. So that’s really where our efforts are going to be. The investment is not very big as I mentioned earlier and it’s something which we can possibly discuss over the next couple of calls.
Ankit Gupta
Sure. Okay. Any indications on what will be our total capacity utilization across bulk and specialty side? If you can give an indication during Q2, how much was our capacity utilization?
Bimal Goculdas
So, again, it varies product to product, but I can tell you that the bulk chemicals is more than 90%. In most cases we are more than 90% utilized, whether it’s this quarter or previous quarter or before that. The thing is that in bulk chemicals, if you have a good pricing then it makes a difference in the profitability. So, in the specialty chemicals, we have improved our capacity utilization. I think it’s difficult to give an average across all the plants but it ranges from about 50% in the worst case to about 80%, 85% in the best case.
Ankit Gupta
Sure. Okay. Okay. And sir, let’s say, hopefully, the situation stabilizes for further in another like remains or improves from here on as well over the next few quarters. At optimal capacity utilization, with our current asset base, what kind of revenues do we then may expect to generate?
Bimal Goculdas
This question has come up many times even in past calls and it’s difficult to answer exactly because it also depends on the selling price, and the selling price very often also depends on so many considerations like raw material cost, ocean freight, all that. But I mentioned before that with the last major investment that we made, we believe we can do around INR500 crores plus with the current setup.
Ankit Gupta
Okay. And this will be based on the current prices, which are actually at the lower end over the past three, four years?
Bimal Goculdas
No, I didn’t say the prices at the lower end over the past three, four years. They have improved over the previous quarters. I think the previous quarter would have been amongst the bottom in the past six years.
Ankit Gupta
Okay, okay. But this is based on — INR500 crore is based on the current pricing that we are seeing?
Bimal Goculdas
Yes, yes.
Ankit Gupta
Sure. And then let’s say, if for some of the products where we are seeing lower capacity utilization, so when their capacity utilization also improves to let’s say 75%, 80% our margins can also see an uptick from let’s say 15%, 16% to more of let’s say 19%, 20% whenever that happens.
Bimal Goculdas
So, in general I’ll answer that question because as I told you the bulk chemicals, we are already running at full capacity, right? Close to full capacity. But the specialty chemicals out there we get better margin and those are currently at lower capacity. So to answer your question, yes, once those plants start operating at higher capacity there will be certainly an increase in the EBITDA margin.
Ankit Gupta
Sure. Sure. Just one last question on — like we are already at around INR100 crore kind of top line. Of course I know this is after a very challenging time but — and given we have also deleveraged our balance sheet quite a bit over the past two years so, and like leverage and all is pretty healthy now.
Like when do you expect that next phase of capex will come for us, if the situation remains good at least over the next two, three quarters? So, any tentative plans or any like are you guys thinking on further expansion given that — like the room to grow from like we’re already at INR100 crore kind of quarterly run rate?
Bimal Goculdas
So, one good quarter is not enough to make an investment decision. And — so we look at it based on the development in our new products. For the existing products, I believe we have sufficient capacity. If we need more capacity it will be for the new products and we look at that as the time comes. But certainly, it is not something we are rushing into right now.
Ankit Gupta
Okay. Okay. And sir, any indications on, how many new products we have launched in this current financial year and how many products are we planning to launch for this entire fiscal and FY ’26?
Bimal Goculdas
So, of significance there are two products which we believe will make a difference if they are — if they achieve the scale that we would like. But again we’ll discuss the actual performance when it happens.
Ankit Gupta
Okay, but these are for export market in which like…
Bimal Goculdas
These are for domestic market.
Ankit Gupta
Okay. Okay. And which segments are they addressing? Which industry are they going into?
Bimal Goculdas
So again one goes into a wide range of industries and one goes into automotive type of applications.
Ankit Gupta
Okay, okay, okay. Thank you and wish you all the best sir. Thank you.
Bimal Goculdas
Thank you.
Operator
Thank you. The next question is from the line of Jeevan Patwa from Sahasrar Capital. Please go ahead.
Jeevan Patwa
Yes, congratulations Bimal for good number after a really long time. I think, I hope basically these numbers will now remain better. Obviously, it depends upon…
Bimal Goculdas
I hope so.
Jeevan Patwa
Yeah, yeah, yeah. Obviously. So, the only question now I have is, do you, still not able to see any signs from our European clients, about the demand, so picking up the products?
Bimal Goculdas
So, very bluntly to answer your question, the answer is no. Because I’ve also been talking to experts, chemical industry experts from Europe. I’ve been reading reports and all the indications are that while they want to do something, they’re not sure how to do something. Their energy costs are high, availability of skilled manpower is low, their appetite for investment is low. They’re worried about increasing inflation so they continue to buy -lower cost products from China and other countries.
So, these are systemic issues. And once it gets into a recession type of situation, the outlook, their whole attitude is negative, and they are more worried about the future than optimistic about the future. So, population is an issue, energy continues to be an issue. They’re environmental, the green laws are now so strict that manufacturing is becoming almost impossible there. So, except for certain niche areas, my personal opinion, and again, it’s my opinion only, is that Europe, the chemical industry will have a tough time.
Jeevan Patwa
Okay. Okay. So, in that case, whatever capacities we have put up, so these are fungible capacities, right? We can use it for other products that we are right now working on.
Bimal Goculdas
So we have some dedicated products which are based in continuous plants and those are dedicated plants, and others are made in multipurpose plants. So in that sense, yes, the multipurpose plants can be diverted from one product to the other, but the dedicated plants cannot.
Jeevan Patwa
Okay. For that we need to wait for the people — for the client to come back.
Bimal Goculdas
Correct.
Jeevan Patwa
Okay.
Bimal Goculdas
Or we have to evaluate different markets or, you know, things like that.
Jeevan Patwa
Got it. And on the boron side, I think we were about to set up a technical boron — boric acid plant, right. So have we done any progress there or we have — we are not going to do.
Bimal Goculdas
We made incremental investments over the past, you know, so we do have a boric acid plant, technical grade, and we’ve done incremental bottlenecking — debottlenecking on it. And our idea is to grow the downstream products rather than the technical grade boric acid itself in a big way.
Jeevan Patwa
Got it, Perfect. Perfect. Thank’s a lot, Bimal.
Bimal Goculdas
Thank you.
Operator
Thank you. [Operator Instructions]The next question is from the line of Sajil Kapoor [Phonetic], who is an individual investor. Please go ahead.
Sajil Kapoor
Yeah, thank you for taking my questions. Hello, Bimal, can you elaborate on the DMCC customer relationship dynamics for dedicated and multipurpose plant? What I mean is, could you provide your perspective on the lead time of contract negotiations and specifically the timeline from prospect to revenue conversion for both the multipurpose or the development molecules as well as the development plant.
Bimal Goculdas
Sure. So in general, for the plants which are dedicated, there is very little conversion time as such, because we established in those products, we are amongst the top producers in the world of those products. Our quality and delivery and all is pretty well known. So it doesn’t take too long to convert a customer. We don’t have to have a long approval time and things like this. It’s different for products which are made where we are new entrants, or whether it’s a new product for us or a new customer for an existing product from a multipurpose plant, because then it goes through like a long audit process. It goes through a qualification process and that could vary from customer to customer and industry to industry. So the pharma industry may have a much longer approval time than, for example, somebody working in a less sensitive area or somebody working in a product which is far away from consumer use. So it just depends on that particular application and difficult to give a general timeline. But I can say that it takes much longer than it would for our dedicated plant products.
Sajil Kapoor
Yeah, You mentioned about the long lead cycle in case of pharmaceutical industry. If I were to ask you to compare between, let’s say an automobile industry where we have got some fluids and recent launches, right. So if you were to compare automobile industry with the pharma vis a vis on two dimensions, let’s say the approval time for you to establish the relationship and there after the stickiness. So how long typically you find yourself staying with that relationship once the product has been approved, after six months or 12 months or whatever is the product approval?
Bimal Goculdas
So what we do is we spend enough time on product selection. so that we know we will be competitive once it is launched and therefore once we are approved, we — It’s difficult to be dislodged, you know, unless somebody comes out with a completely different knowhow or a completely different process. We find that — and in my experience it’s been that we don’t get dislodged easily once we are in a particular customer.
Sajil Kapoor
And that’s across industries, not just pharma.
Bimal Goculdas
Yes, Issues regarding, you know, which in the drug master file, whose name have they put and all that. So those are different issues. But I’m saying even apart from regulatory issues, it’s not easy to get knocked out because somebody will have to come out with something dramatically different, to dislodge us. And that’s because we select the products in such a way that we would have some advantage over the competition.
Sajil Kapoor
Yeah, of course. And then boron is an essential element in cross sciences and other industries. And my reading suggests that the role of boron chemistry is increasing in the nutraceutical as well as the pharmaceutical space. How do you see the role of boron chemistry through the lens of pharma innovation and clinical trials in particular? And I’m asking this question in the context that I’ve seen DMCC participate regularly in CPHI and other industry events. And so if you could maybe club your experience on the boron chemistry and usage and you know, if there are any sort of development traction that you find that, you know, your scientist or company as a whole is getting engaged in the development of future nutraceutical as well as pharmaceutical drugs, clinical trials, etc., especially in boron.
Bimal Goculdas
So we are not in that space at all, very honestly. So we are not in the nutraceutical boron products or in, you know, any pharmaceutical boron products. We make much more basic molecules and even the new products we are developing are far away from that space. So I have been reading about things like boring, boroxine [phonetic], the cyclical boron ring, organoboron compound, but we are not in that space as yet.
Sajil Kapoor
Sure, that’s helpful. And would it be possible to share how customers and innovators view us today compared to say five years ago? Because you have been attending these trade industry events, CPHI, etc over past several years. So what I’m trying to understand is, has the customer perception changed regarding the competence or the capability of the DMCC today versus, you know, let’s say four, five years ago?
Bimal Goculdas
So, you know, we’ve been historically attending these industry events, but possibly our activity on LinkedIn and all was not so much. Therefore it was not visible to the general public. But we use these forums, there is an industry networking events. It’s a good meeting place for existing customers, it’s a good meeting place for new customers. And certainly, you get to see what’s happening around the world and so we’ll continue doing that. I think DMCC is an old company and once you say that you are more than 100 years old, the question of reliability and all does not arise. So although we are new to a lot of the products where we are supplying today, compared to say historical numbers, we — the company reputation has always been pretty good. And you know, we commit to deliver, we do deliver, you know, and if there’s a problem, we will take action. We will do the replacement as necessary. We will customize our product to what the customer needs, things like that. So it’s certainly positive that we are getting into more and more areas and that these customers, we don’t have to go and introduce ourselves in most cases, people know us. The question is whether we can supply something that those customers need and whether we can do it in competition with non-market economy supply.
Sajil Kapoor
Yeah, that’s interesting and helpful. And do you measure employee attrition, and if possible can you share the last three year average employee attrition? I was going through your annual report, I couldn’t find anything about the employee attrition there.
Bimal Goculdas
I didn’t get your question, sorry.
Sajil Kapoor
So in terms of employee churn or attrition, do you measure how many people you lose on an average and on a yearly basis? I was going through your annual report. Generally, companies disclose the attrition in their annual reports. I couldn’t find that number in your annual report.
Bimal Goculdas
The reason is you don’t find it. It’s not a big number, it’s not an issue of concern. I think, we would have less than 5%, attrition rate but it’s something which we could start reporting I think in the future.
Sajil Kapoor
Sure. So 5% is a very low number. Bimal. I mean in your sense, is it because employees find it difficult to get an opportunity elsewhere in the local area where they are traveling and they may not be prepared to change down places, etc. Or is it something much more fundamental culture-related that employees genuinely like working in DMCC? So it could be either of those two, right?
Bimal Goculdas
So if I answer that question without having a proper survey done, it would be just guesswork. But in my opinion it’s probably a combination of all the things you mentioned. And you know, it’s a free world. You know, in Dahej for example, there are literally hundreds of chemical companies and people may move from one to the other very easily. In Roha, not so much, it’s not such a big at stake. But if you look at, you know, marketing people or support staff or you know, finance, secretarial, all that, they’re based in Mumbai and there’s enough opportunities across industries. So I would say it’s probably a combination of reasons keeping them with the DMCC. Obviously, we may not be the best in pay, we may not be the best in other conditions, but overall, I guess, we are not a bad employer at all. So exact numbers, again, don’t know offhand but it’s certainly a low number.
Sajil Kapoor
Sure, sure. And finally, Bimal, the current capacity utilization for our dedicated plants may not be a reliable indicator to trigger fresh capital expenditure because there is so much volatility and randomness in the ecosystem and future events may not unfold as planned. So the question really is how should management deal with such volatility and randomness in the industry? And you alluded to what’s happening in Europe and who knows, I mean, Europe may never recover from this glut. But excluding Europe, even in other jurisdictions there is a war going on somewhere, there is a change of government and regulation happening, etc. There is so much randomness. I mean, how do you — what assessment do you do before you undertake, you know, capital expenditures? Because a greenfield expansion may take three years, a brownfield of course, will take less amount of time. And how do you deal with this volatility? That’s — that’s exactly the question.
Bimal Goculdas
So there is one simple answer to this, is that you have to be very careful because it is really unpredictable and things can change at a drop of a hat politically as well as economically. So unless you are certain, you don’t put money on the ground. And that is one of the reasons we have invested in multipurpose facilities where there is some level of flexibility between products and see it gives us the opportunity to move to something else if one product fails or in any case, we look at multiple geographies, we look at multiple customers, you know, we don’t develop products for a particular customer or only for a particular end use. So that’s the only way you can hedge your risk sort of,
Sajil Kapoor
Yes. So assuming that we only do debottlenecking and smaller capital investments over the next three, four years. The leverage in our balance sheet is reducing anyway. So does that mean that we may relook our dividend distribution or the buyback policy?
Bimal Goculdas
That’s for the Board to decide. But it will certainly be on the table.
Sajil Kapoor
Yes, that’s helpful. That’s helpful, Bimal Thank you so much for all the elaborate responses. Wish you all the best. Thank you.
Bimal Goculdas
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Rohit from Progressive Shares. Please go ahead.
Rohit
Hi Bimal, Couple of questions from my side. First one being the company has helped Andhra Sugar commission 500 TPD sulphuric acid plant. That happened somewhere in March, April, May, during this year. So are there any more such projects and how do these kind of projects help our operations and profitability?
Bimal Goculdas
So we historically built more than 50 sulphuric acid plants for customers across India, in the Middle East, in Africa. And while currently it’s not a very big business for us but we do retain the engineering capability.
Rohit
Okay,
Bimal Goculdas
We will evaluate opportunities in this area as well. So we have the team, we have the skills and we have the reputation. We are amongst the only technology suppliers in the world that is operating its own plants. So you know this is a unique aspect of our consultancy business. And so we will look at more opportunities. As again I said, we are not going to become an engineering company. We are going to remain a manufacturing company. But we will have engineering capabilities.
Rohit
Any more such services or consultancy businesses that you are currently working on which you’d like to share with us?
Bimal Goculdas
Sure. We are working with GSFC for 600 ton per day plant. We are working with Mangalore Chemicals and Fertilizers for a 300-ton, 350-ton-per-day plant and some others in the pipeline.
Rohit
That’s great. Sir, we saw that you did mention about Europe. Where there are certain issues and certain part of revenue is lost. But if we compare the numbers our exports has gradually increased from 20% to 22% this quarter around. That is ex of Europe. So which are the other geographies which are helping you fetch or get more export business?
Bimal Goculdas
We are doing some to the U.S., is doing a little bit to Latin America. It’s not that Europe is zero, but it’s in decline. We still see some export, but not the type of growth or the type of reliability we would expect. And manufacturing is shifting away from Europe so we have no illusion that it will come back in a hurry.
Rohit
I remember last Europe was somewhere around 60%, 61% of the total turnover. But then the turnover was also slightly lower two quarters ago. Currently, Europe would be what percentage?
Bimal Goculdas
Sorry?
Rohit
The percentage of Europe in the current quarter from the total revenue.
Bimal Goculdas
Europe itself would be small because exports are also less than, you know, if you see our total exports, it would be 20% of our sales, 20%, 25% of our sales. So within that Europe would be some part which I can’t remember offhand.
Rohit
Okay, not an issue. So are there any long-term contracts or committed volumes that you are looking at? Because we have got quite a lot of customers which are reputed like Archima, BASF, Sanofi, Solway. So do these customers not come and say that let’s do a contract for maybe three years or maybe five years or 10 years kind of a committed volume?
Bimal Goculdas
So they don’t commit, at least for us. They’re not take or pay agreements.
Rohit
Okay.
Bimal Goculdas
So they take from us if they need it, but if they don’t need it, then there’s nothing we can do to enforce them. We can’t force them to take a product.
Rohit
Yes true, true,
Bimal Goculdas
And in general we haven’t lost to competition, we lost because the product has disappeared.
Rohit
True. Last time, when we spoke we were talking about this new product for the automotive. I think that was around one and a half, two years ago. Sir, would you like to take us through how soon or how late will this product be launched in the market?
Bimal Goculdas
So we have launched it and it’s under multiple customer approvals. Some places that is approved and we are doing commercial runs and other places it’s still at trial speed. So we will, you know, we have more information as time goes by.
Rohit
As for your estimates, would you like to put a number to the market that you could cater to?
Bimal Goculdas
No.
Rohit
Okay, last question. I know you have been consistently trying to retire the debt, but when do you think that DMCC Specialty will be a debt-free company?
Bimal Goculdas
So as for the current run rate, in about two years, we expect to extinguish our term debt. Working capital may continue, but if we do some other projects, then again that timeline may get extended.
Rohit
Do you have any such projects in mind which you intend to do where you might not?
Bimal Goculdas
Nothing significant at this time.
Rohit
Okay. Okay. Thank you, sir. Thank you for answering my questions. Thanks a lot.
Operator
Thank you. [Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to Mr. Bimal Goculdas for closing comments.
Bimal Goculdas
Thank you. Once again, I’d like to thank you all for taking the time to attend, to go through the results, to go through our presentation, and of course to ask questions. I may say that you know, we also learn from these questions. So we encourage you to ask. While we may not answer all the questions if it’s not in the interest of the company or if it’s not our policy for a futuristic outlook, but that doesn’t mean that we are not working towards growing our business. So once again, wishing you all a happy Diwali and a healthy and thoughtful new year and look forward to connecting again. Thank you.
Operator
[Operator Closing Remarks]