Fairchem Organics Ltd (NSE: FAIRCHEMOR) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Rajen Jhaveri — Chief Financial Officer
Nahoosh Jariwala — Chairman and Managing Director
Analysts:
Unidentified Participant
Nupur Jainkunia — Analyst
Aashish Upganlawar — Analyst
Chirag Vakharia — Analyst
Madhur Rathi — Analyst
Nirag Shah — Analyst
Nikhil Porwal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Fairchem Organics Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Nupur Jean Konya from Velourim Advisors. Thank you. And over to you ma’. Am.
Nupur Jainkunia — Analyst
Thank you. Good afternoon everyone and a warm welcome to you all. My name is Nupur Jen Gunia from Malaram Advisors. We represent the industrial relations of Aircam Organics Ltd. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the first quarter of the financial year 2026. Before we begin a quick cautionary statement. Some of the statements made in today’s con call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated.
Such statements are based on management’s belief as well as assumptions made by information currently available to management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions. The purpose of today’s earnings conference call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review.
Now I would like to introduce Rudha Management participating with us in today’s earnings call and hand it over to them for their opening remarks. We have with us Mr. Naush Dariwala MDN Chairman. Mr. Rajan Zaveri, CFO of the company.
Without any further delay, I request Mr. Rajan Taveri sir to start with his opening remarks on the financial highlights. Thank you. And over to you sir.
Rajen Jhaveri — Chief Financial Officer
Thank you Ms. Nupur. And before I proceed, will you please tell how many participants have connected?
Nupur Jainkunia — Analyst
We have almost 35 participants.
Rajen Jhaveri — Chief Financial Officer
Okay. Okay. Thank you. Thank you Ms. Nupur. And good afternoon everyone. Welcome to our earnings call for the first quarter of the financial year 2026. Let me first start off by giving you some of the key financial highlights. After this our PMDC Navai will give you some of the operational highlights for the quarter under review. The revenue from operations stood at INR 131 crores which increased by 8.5% quarter on quarter and decreased 21% year on year. EBITDA for the quarter was approximately 5 crore with EBITDA margin improving slightly to 3.97% from 3.64% in previous quarter. We reported a net profit after tax of approximately INR 1.2 crore for the quarter and which doubled sequentially.
These revenue growth from previous quarter was Primarily driven by 7.5% growth in volumes while margin improvement was on the act of savings in power and fuel cost which was partially offset by relatively higher raw material cost.
Now I request our CMDC NOUS way to brief you on the operational highlights. For the period under ebm.
Nahoosh Jariwala — Chairman and Managing Director
Good afternoon everyone. Let me walk you through our performance for the first quarter of Finalcy 2026. The improvement in financial performance this quarter visa vis the previous quarter was driven by improved volumes on the raw material front. Even after a partial rollback of additional customers dupes, raw material prices remain largely firm due to the elevated global vegetable oil prices. Our damier acid market segment continues to face pressure because of aggressive price competition from Chinese suppliers and no corresponding relief in raw material cost. The basic custom duty on imported dimer still remains at 7.5%. On a positive note, we remain confident about our value added product isosteric acid and expect export volumes to increase gradually over the coming quarters.
Our sales mix for the quarter was 92.5% towards domestic sales while exports made up to around 7.5%. Operationally we processed 11,699 metric tonnes and sold 13,662 metric tons of material during the quarter. In summary, we are seeing early signs of revival in the business and but due to higher raw material prices and continued dumping of products by China, the business environment continues to remain challenging.
With that I open the floor for question and answer session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone phone. If you wish to remove yourself from the question queue you may press star and and two participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants who wish to ask a question may please press Star and one at this time.
The first question is from the line of Ashish from Invest Q pms. Please proceed.
Aashish Upganlawar
Yeah sir, just wanted to understand we’ve been struggling with this problem of dumping plus higher raw material cost because of several reasons for last so many quarters now. So is there any representation to the government or is there anything that is going on where I mean some sort of respite can happen on the dumping side or maybe the raw material side Anything that you would know, I mean, please share.
Rajen Jhaveri
Additional duty was delivered in September and we made the representation to government in November 2024 only.
Nahoosh Jariwala
But I think as we. We are the only manufacturer of fatty dino fatty acid in India. Maybe, I mean being a single manufacturer, it might be. I mean to take a call would be a tough thing.
Aashish Upganlawar
So as of now there is no hope of anything like that? Basically.
Nahoosh Jariwala
No. not in short, I mean. Doesn’T look.
Rajen Jhaveri
In other words, we haven’t heard anything in response to our November 2024 application.
Aashish Upganlawar
Okay. And on the raw material side you said that the prices of raw materials were on a higher side. So what is the outlook on that? Now?
Rajen Jhaveri
See subsequently end of May, government partially rolled back the duty which was labeled in September 24th in May and government partly rolled back the duty. But during this intervening period of six, seven months, what had happened? The global vegetable oil prices had remained high. And in India also the prices had remained high. So after this partial rollback also unfortunately these prices of the raw material which we need, it did not decline. And the next season also is from November onwards only for this particular vegetable oil season in India, the year is considered to be November to October. You might be aware about that.
Aashish Upganlawar
Right? Okay. Okay. So I mean outlook remains similar. Is it what we are suffering right now in terms of margins and.
Nahoosh Jariwala
Yeah, yeah, yeah, yeah. For dimer.
Rajen Jhaveri
For dimer acid, yes. Not for the company as a whole.
Aashish Upganlawar
Okay, so what’s the outlook for the company? I mean volume growth, what was it sir? This quarter and what is the outlook? And then how are you looking at overall margins and profitability.
Rajen Jhaveri
Instead of volume growth, we are quite optimistic about these value growth by way of higher sales of isosteric acid. Of course it will have some volumes growth also, but value growth could be substantial if things fall in line for isosteric acid.
Aashish Upganlawar
So what are we expecting, sir? FY26 roughly, I mean because of so many things going on, isosteric acid being a new found for us and that probably does well and the current business is facing a problem. So how do we read FY26 to be overall Because ?
Nahoosh Jariwala
This year we expect it to remain compete, I mean competitive because like we are, we were said, we are also selling an isosteric acid to us. So again in that there is some duty things are also coming. So yes, it is going to be a challenging year. But long term we are very confident about the business model. Long term this is not going to. This is not a situation which is going to remain forever. Only thing is we have to wait for the time. We have to. Rather than taking any knee jerk action. We have to remain calm and remain in the business.
Aashish Upganlawar
Right sir. And what’s the kind of undercutting versus the earlier price? Now just to have a reference what what kind of dumping is going on in terms of pricing discounts that were there earlier and now what is the discount that is going on from the Chinese?
Rajen Jhaveri
Briefly I can tell you about 24 months the ruling dimer sea price was in the range of 1 lakh 80 thousand per metric tons. And today it is less than 1 lakh 45 thousand tons rupees per ton. From 1 lakh.
Nahoosh Jariwala
See a drop of around 20%.
Aashish Upganlawar
Okay, okay. So you would be. I mean that’s an assumption that they would be selling at maybe break even or some sort of.
Rajen Jhaveri
Export.
Nahoosh Jariwala
Some type of export incentive they are getting.
Rajen Jhaveri
Dina is a closed economy now.
Nahoosh Jariwala
So we don’t know. Whatever all the chemical companies are facing. We are facing the same music in API. Also the way pharma companies are facing, we are facing the same thing.
Aashish Upganlawar
Just a small request. In case there is a change in any of these we would appreciate if you could inform investors maybe by a release on the exchange or maybe by a call.
Nahoosh Jariwala
Yeah, sure, sure, sure.
Aashish Upganlawar
Thank you.
Rajen Jhaveri
Mr. Rajesh.
operator
Before we take the next question we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Chirag from Buddhram Finance. Please proceed.
Chirag Vakharia
Sir, you said partial rollback of duty. So what is the duty right now?
Nahoosh Jariwala
It‘s 22.5%.
Rajen Jhaveri
See duty was before the additional levy of duty. The exit duty was 5%. In September 24th government imposed additional 20% duty. So duty basic duty become 25%. Then there was a 10% surcharge. So basic duty became 27.5%. Out of that government has partially rolled back. That is basic custom duty has been reduced by 10%. So we search that it is reduced by 11%. So 27.5% has now become 16.5%. Visa vis 5.5% which was there. So net impact of 11% still remains.
Chirag Vakharia
Okay sir. And so the. The basic construct remains the same. DA is around 25% and lionic acid is around 43%. That remains same or that also has changed the mix.
Rajen Jhaveri
No, our product means our sales value. Sales value in terms of sales. In terms of value for our Prime 3 product continues to be between 70 and 75%.
Chirag Vakharia
Sorry sir, I did not get that between.
Rajen Jhaveri
Sales of our three prime products now three prime products are dimerpy linoleic acid and isosteric acid. Out of the total sales, the share of these three products put together continues to be between 70 and 75% since last many quarters. See internally it may undergo change in. A one particular quarter. Diamond massage may be slightly higher and another may be lower. But by and large the ratio would be between 70 and 75%.
Chirag Vakharia
So sir, if I exclude the diaper acid which is still seeing some issues. Linic acid and isoteric acid will see what growth rates are. Any. Any sense can you give us.
Rajen Jhaveri
Dimer acid continues to enjoy an important thing it is. It is close to 25%. So we cannot exclude dimer acid out of 77.
Nahoosh Jariwala
We would like to remain in business of dimer fatty acid.
Rajen Jhaveri
And as you know earlier said that things are.
Chirag Vakharia
Not from dimer acid. Sir, the two. Two other chemicals are linic acid and isotoric acid. So my question is what is the growth outlook for those two. Those two segments?
Nahoosh Jariwala
Isosteric acid growth outlook looks very very promising. Because we are the third company only now in sector there were four companies. Now one. We have heard that one of the company has stopped manufacturing. So now there are just three companies manufacturing isosteric in the world. So we are very hopeful.
Chirag Vakharia
I make acid.
Rajen Jhaveri
Linoleic acid is presently around 40% of our total sales. And.
Nahoosh Jariwala
And it will remain like it will maintain it that level.
Chirag Vakharia
Okay? Okay. Okay sir. Thank you.
operator
Thank you. Participants who wish to ask a question we press star n1 at this time to ask a question please press star and 1. Now the next question is from the line of Madhur Rati from Countercyclic Investment. Please proceed.
Madhur Rathi
Thank you for the opportunity. Sir, how much is our current capacity of this isoteric acid and what is the global demand currently for this product?
Nahoosh Jariwala
There are no details available about the exact demand of. But one can see easily that based on the tentative information what we have collected from the companies from whom we are negotiating or where our material is under approval. The our capacity would be hardly 10 or 15% of total demand.
Madhur Rathi
Got it? Answer. Who would be the other three companies that are manufacturing this product globally?
Nahoosh Jariwala
Cargill and a company called Oleon.
Rajen Jhaveri
Cargill is based in USA and Oleon is based in Europe.
Nahoosh Jariwala
Europe.
Madhur Rathi
Got it sir. We were also planning to like use some alternative raw material other than the vegetable oil byproduct for us to have better spreads going forward. So any like any progress on that?
Nahoosh Jariwala
Yes, positive progress is happening on that. Positive progress is happening. Maybe we might. We might if everything goes well, initial trial runs have been successful. Initial trial runs have been fairly successful. But we’ll still. We’ll take some time afterwards. We’ll. If we decide, we’ll decide to change after new consideration.
Madhur Rathi
Got it sir. Based on our current like current volumes that we did, I think we are operating, sir. What would be our capacity utilization and what would be the revenue potential at the current prices for our current capacities at.
Rajen Jhaveri
At this, at this revenue level we were operating at around 70% capacity and we achieved this revenue. So there is a further upside of reaching up to 100% capacity operation. Yeah.
Madhur Rathi
Got it. 70% capacity utilization, 100 crore levels.
Rajen Jhaveri
Yeah.
Madhur Rathi
So like. Okay, got it. So that was from my intel. Thank you so much and all the best.
operator
Thank you. Participants who wish to ask a question may please press star and one at this time. The next question is on the line of Niraj Shah from Exemplar Investments. Please proceed.
Nirag Shah
Can I help separate value wise figure of legalist, dimer and isosteric for the quarter.
Rajen Jhaveri
I told you. Linolic acid is approximately 40% of our total sales. Dimer acid is nearly 25% and isosteric acid is approximately 7% or so 10%.
Nirag Shah
Hello. Hello.
Rajen Jhaveri
Acid is approximately 40% of our total Sales. Dimer acid is around 24, 25% and isospheric acid is around 67%.
Nirag Shah
Since last more than almost 2.5 years, we are facing difficult time in our core business and the mitigatory steps that we have been taking. The launch of hyperscaric acid and working. The. Very slow visa vis the case of margin pressure and slow down which we are facing in our school business. So my big question was as our key promoter, isn’t it the right time to have some inorgan move to estimate our pace of growth our margin pressure as we can clearly see our key products like linolequantimer becoming more of commoditized product.
Rajen Jhaveri
Mr. Shah, your voice was breaking so we were not able to hear you perfectly. But what we have understood and on the basis of that, what clarification we want to make is that at even a 70% capacity also since isospheric acid is a value added product, if we can sell more isospheric acid by operating the same level of raw material processing, our top line can still increase at 70% only. But if you can reach 100% it will have a further potential of increasing the top line.
Nirag Shah
Since the production of timer also. Right. Dimer acid also. And in that you are facing margin pressure.
Rajen Jhaveri
Dimer acid. We will continue to face the pressure, pricing pressure, but simultaneously for isosteric acid sale improves we will be able to take that challenge.
Nirag Shah
Okay, got it. And this you said regarding new raw material. So by when can we expect some concrete clarity regarding that whether it is successful or not?
Nahoosh Jariwala
November. Maybe November.
Nirag Shah
By November. Okay. And regarding that, a separate tocopherol and sterile stream which was talked about before three years. So that project is now completely off.
Nahoosh Jariwala
Yeah, at this stage completely off because we were supplying it to us.
Nirag Shah
And right now what is our exposure to us?
Rajen Jhaveri
For this quarter it was less than 2% in terms of value.
Nirag Shah
And last year.
Rajen Jhaveri
Last year was also round 3%.
Nahoosh Jariwala
Because we just started the isosteric export. No.
Nirag Shah
So we are not that much affected by this tariffs and all. Right.
Nahoosh Jariwala
Yeah. Future business would have got.
Rajen Jhaveri
Future business can get affected as far as if past is concerned. We were not. We have. We would not have got affected because our volumes are. But what we were exploring, what we were planning, what we had already planned that may get impacted.
Nirag Shah
For isosteric, right?
Nahoosh Jariwala
Yes.
Nirag Shah
But for isosteric Europe market is larger or US market as per your. The way your clientele.
Nahoosh Jariwala
Needs to remember. One thing that for any product USA is one of the largest market any. Any product you take in the world by virtue of their fear population and they’re buying, I mean for any and every product. So we cannot just depend on European market alone.
Nirag Shah
Visa vis our capacity which is there. So is are we prepared to sell our capacity 70, 80 or isocated to Europe if US tariffs don’t change or anything?
Nahoosh Jariwala
No, no, no. It cannot happen.
Nirag Shah
Thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Nikhil from Perpetual Capital. Please proceed.
Nikhil Porwal
Yeah, hi. Thank you for the opportunity. I’m new to the company so pardon me for some basic questions. Can you mention your capacity for each of these three main products? Limeric acid, linoleic acid and isospheric acid.
Rajen Jhaveri
See, in our case, our case is like that of a petroleum refinery. So our capacity is measured in terms of throughput of raw material. Because from a single raw material we are deriving multiple finished products. And that too because it is a natural product, that ratio may slightly differ also. So based on that our raw material throughput capacity installed capacity as of now is 120,000 metric tons per annum out of which 40 metric 1000 tons per annum. We have earmarked for a new set of raw material and new set of finished products for which Developmental work is going on for the balance 80,000 metric tons of raw material throughput.
From that we can derive multiple products. And out of that we can derive dimer acid also. We can derive linoleic acid also. And from evaluated product we can make isosteric acid also.
Nikhil Porwal
Okay, and is the manufacturing of isosteric acid linked to the making of linoleic acid in some way? I mean, is there. Is this a byproduct of linoleic acid?
Rajen Jhaveri
Isosteric acid is not the byproduct of linoleic acid. Isoceric acid is made from monobasic acid and monobasic acid and dimer acid. We are simultaneously getting if that process oligo linoleic acid.
Nikhil Porwal
Okay. So basically to get more of isosteric acid, you will also have to manufacture more of dimer acid because it’s part of the process.
Rajen Jhaveri
More of primer acid would be. Would accompany that.
Nikhil Porwal
Okay.
Rajen Jhaveri
In the business of primer acid also.
Nikhil Porwal
Okay. And anything, particularly on isosteric acid, what is the current capacity that you’ve set up?
Rajen Jhaveri
Capacity? As you know, we said that we will be approximately 10 to 15% of our total total world estimated demand. And it can translate into.
Nikhil Porwal
Okay. And for the. At what tariff rate does it make sense for you to yet target that market?
Rajen Jhaveri
What direct.
Nikhil Porwal
At what tariff rate? For us.
Nahoosh Jariwala
Anyone would love zero tariffs. Carry from Europe to USA is 15. Yes. And for India it’s 50% now 51. Yeah. So it’s 35, 36 difference. It’s too big a difference.
Nikhil Porwal
So like, like you mentioned. So Cargill is an American company. I’m assuming they have some plants.
Nahoosh Jariwala
No, both the plants are in Europe in U.S. no, none of the isosteric plants are there. Cargill has plant in Europe and Oleon also is in Europe.
Nikhil Porwal
Okay. And in terms of cost advantage, anything on that? Like how?
Nahoosh Jariwala
Obviously our manufacturing cost is low. Obviously our manufacturing cost is low, but.
Nahoosh Jariwala
36% is too big. Yeah, two bigger difference.
Nikhil Porwal
Got it. And any other large project or product in the pipeline that can be a larger part of the product.
Nahoosh Jariwala
Yeah, we are working on the new product for which we have earmarked 40,000 tons capacity. But that will take.
Rajen Jhaveri
I mentioned about that year marking of 40,000 tons of capacity for new raw material and new set of. We are working on that.
Aashish Upganlawar
Okay.
Rajen Jhaveri
It is again. It is again export market potential only and very good set of.
Nahoosh Jariwala
It would make more sense for us to stabilize the current set. Current production, current issues. That would make more sense.
Nikhil Porwal
Okay. Okay, got it. Thank you so much. I’ll Stay in touch.
operator
Thank you. The next question is from the line of mother Raji from Countercyclic Investments. Please proceed sir.
Madhur Rathi
Thank you for the opportunity once again. Sir, what is the current price of linoleic acid and what. What it was like you mentioned that 1.8 lakh was for dimer asset two years back. So at a similar timeline what it. Was.
Nahoosh Jariwala
We won’t like to.
Rajen Jhaveri
Certain things are business secrets and is concerned we are the only manufacturer. You have to understand one thing. And as far as linoleic acid is concerned we are not the only manufacturer. There are other manufacturers who are making.
Nahoosh Jariwala
Product which is inferior to our linoleic.
Rajen Jhaveri
And some of them may be already on this earning call line.
Nahoosh Jariwala
We would like to share.
Rajen Jhaveri
So it is in the interest of the shareholders only that we do not disclose all the information.
Madhur Rathi
Got it sir. No problem sir. Next question was. Sir, I’m just like doing a back of the envelope calculation. Sir, with our current capacity and the current product mix not changing to higher isoteric or any value added production is it fair to assume that we could easily do 1200-1300 crore revenue from just processing the 1.2 lakh metric ton of capacity that we have.
Rajen Jhaveri
At 1.2 lakh tons of capacity. What could be our possible top line? That is what you are trying to ask?
Madhur Rathi
Yes sir.
Rajen Jhaveri
Whatever. Whatever figure you said is theoretically it is possible.
Madhur Rathi
Got it? Answer a sub question. Sir, since our capacities should be more thought like a crude oil refining. So should we think from a better margin perspective or a better portent perspective for our business.
Rajen Jhaveri
Things will keep on changing.
Nahoosh Jariwala
See all these things. All these discussions is happening because the government of India increased duty on vegetable oil from 5.5% to 27.5%. And dimer import duty on dimer was 7.5%. So there is a differential on raw material. What we are procuring 22.5%. So I mean we are working on it. It’s a. It was something which came from. I mean it was a short. From a die. I mean sudden impact which came to us. So I mean for any company. For. For any company to take a sudden impact of 22.5% hike in raw material overnight. It’s going to take some time for it to recover and stabilize things.
Madhur Rathi
Got it sir. I understand where like the government impact. I’m just trying to understand for a business perspective is a bit of portern or correct way to think based on the raw material we process or EBITDA margin would be a fair way to think about our business.
Rajen Jhaveri
EBITDA margin as a percentage to sales would be the fair thing.
Madhur Rathi
Got it. So on a steady state basis what kind of EBITDA margin we should expect based on the current product mix and like going over the next two to three years as the value .
Nahoosh Jariwala
It depends on what is the duty government of India keeps on vegetable wise. Before we were operating when duty was on, we were. Our EBITDA margins were in range of 15 to 17%. So I mean how can we predict. How can we predict when something which is government of India is taking decision for the betterment of Indian farmers. So they are the. Yeah. So for these are things which we it won’t be possible at this stage. I would love and start making money like before and have a peace of mind .
Madhur Rathi
Sir, even we would love that kind of duty. So just a final question from my end. So considering like. Like considering there is a similar 5.5% duty and the 15 to 17% EBITDA margin with isoteric acid portion increasing and our revenue. So can we expect this margin to move towards 20% plus just by increasing isoteric acid share?
Rajen Jhaveri
No, no, no. The is cannot take the margin from 4% to 20% at a company level.
Madhur Rathi
No sir, not on a company level. I’m just trying to understand on a steady state basis can it additionally add 3, 4 like.
Rajen Jhaveri
It has to be a gradual thing and it says let’s.
Nahoosh Jariwala
Wait for results come down then we look at all those things.
Madhur Rathi
Got it sir. So thank you so much. I appreciate you answering my question. So thank you so much and all the best.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Chirag Makaria from Finance. Please proceed.
Chirag Vakharia
In line with you know the previous question. So this 10% that rollback you are saying maintaining the status quo. So this 3.97 EBITDA margin that is there which you have clogged in current quarter, this can improve to what level sir?
Rajen Jhaveri
No, no, these had already come into impact in the end of May we say that it has not resulted into any decline in the raw material price. So it has not affected anything positively.
Chirag Vakharia
Okay. And sir, how do you see the global vegetable prices? What’s your outlook on it? Do you think that this should still farm up or this is should remain here?
Nahoosh Jariwala
They should remain like this. That’s what
Rajen Jhaveri
In oil producing countries etc. Etc. This you couldn’t use Russia on war since last more than nearly three and a half years, etc. Etc. So these things are going to weigh in on oil prices. And India is predominantly dependent on imported I think even in today’s date. Also India imports for a 40 to 40 to 50% of its vegetable oil requirement through palm, soya and sunflower.
Chirag Vakharia
Okay, okay. And so procuring it from say Indonesia or Malaysia, Brazil or Argentina.
Rajen Jhaveri
It won’t be viable.
Chirag Vakharia
Viable option. Or you think that sunflower oil is still required. And so your dependence .
Nahoosh Jariwala
Of the freight component, it’s not liable to import by product.
Rajen Jhaveri
We are taking by product of these refineries. So freight will be the prohibiting factor for direct import. Our byproduct cannot be imported also and whatever byproduct is generated in India, those refineries cannot export it also on the same consideration of freight prohibiting factor. So whatever is produced in India is to be sold in India and whatever is produced abroad cannot be brought into India as far as these byproducts are concerned.
Chirag Vakharia
Okay, sir. Okay. Thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Meera, an individual investor. Please proceed.
Unidentified Participant
Hello sir. Thank you for the opportunity. In the previous con call you had mentioned that you are working on a new raw material which would help us reduce the dependence on imports. So have we got any update for that from that?
Nahoosh Jariwala
Yeah, yeah, yeah. We have initial trial and have been positive and after some more runs we’ll go it on. We’ll decide to go on commercial or not. So maybe by November we’ll be through with the whole thing.
Unidentified Participant
Okay. So that can help us like get back on track. Right, so to get the margins.
Nahoosh Jariwala
Yeah, yeah, yeah, yeah.
Unidentified Participant
Okay. So so we are like fully confident we’ll be able to do that by November. Right. Like this is Q3.
Nahoosh Jariwala
Based on the initial trial runs.
Rajen Jhaveri
We are standard. Q3 might not be having that positive because it could be somewhere in November. But. But initial results are encouraging. So we are quite optimistic about that.
Unidentified Participant
Okay, great. So. So will we be able to like fully source it from domestic sources? Okay, that would be really good. Thanks. So just wanted to know that on the previous con call and mentioned that you got some 16 approvals from customer side for isoteric acid. Right. So have we got some new approvals in this quarter and more have been added?
Nahoosh Jariwala
Couple of more have been added. Couple of more have been added.
Rajen Jhaveri
But what will happen? They will take the first shipment and then again wait.
Nahoosh Jariwala
Because basically it goes in cosmetics. So their application tastes and everything is.
Rajen Jhaveri
The cycle is only like that.
Nahoosh Jariwala
It’s taking pretty long. Much more than what we initially expected or much more than what initially they had suggested that they’ll take three to six months maybe they are taking little bit long. And the chances are that we being an Indian company coming for the first time in market, only two other companies doing there’s. It takes time for them to build a trust in us.
Unidentified Participant
Yeah, okay, sure. So and we are exporting isotic acid to like which. Which countries in which regions? Is it only western or .
Nahoosh Jariwala
Any more than already shipments have happened to more.
Rajen Jhaveri
Eight countries.
Nahoosh Jariwala
Seven. Eight countries.
Unidentified Participant
Okay. And can you tell us the volume. For isoteric acid in like the past three quarters? Like this quarter. Previous quarter. And.
Nahoosh Jariwala
It’S slowly picking up. It’s slowly picking up. It’s going to take its own time. But once it picks up, approval is going to happen in such a way that simultaneously approvals are going to be there from all the buyers.
Unidentified Participant
Okay. And these products are going to like all the large cosmetic companies or like you just started with smaller companies first and then we’ll move on. Move on to.
Nahoosh Jariwala
It’s not direct any large companies don’t buy directly. It’s one of the ingredient to make cosmetic. It’s one of the ingredient. So it is being supplied to ingredient manufacturers.
Unidentified Participant
Okay. Okay. And also we had like filed with the government for that custom duty thing to. Have we got any update from that side? Okay. Okay. Okay. Thank you and all the rest.
Rajen Jhaveri
Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Nishant, but from Equity Works Ltd. Please proceed.
Unidentified Participant
Yeah, thank you for taking my question. See, I just wanted to ask the management that if the custom duty. If. Let’s assume that there is no change happens in this custom duty, if that is the scenario, what can be the future margin profile of the company based on the current situation and the incremental revenues that will come from the isoteric acid?
Rajen Jhaveri
Mr. Bhatt, in the previous speakers, in response only she knows we said that we are working on that alternative raw material and it is likely to be. Initial results are encouraging and by November we may perhaps partly switch over to that. So that is the positive sign to address this duty issue.
Unidentified Participant
Okay. Okay. Sorry about that. Actually I joined quite late and regarding this isoteric acid, when can we expect, you know, revenue bump up because You I think you mentioned that gradually that revenues should start to scale up right.
Rajen Jhaveri
Yesterday only that to happen. But unfortunately as you know we said that either because it is an Indian company, because presently only European company or an American company are making these and they have Indian the world that kind of reputation. So when for the first time when these people, these users of isocer acid, when they came to know that an Indian company has made these isosteric acid they were quite surprised and they came to check that whether you have really made the isosteric acid and that to in house. So that that perhaps is maybe taking little longer and they are completing that process of our isosteric acid going into.
Nahoosh Jariwala
Validation process is taking little bit longer.
Unidentified Participant
Got it, got it, got it. Yeah.
Nahoosh Jariwala
So we cannot pressurize and I mean whenever we ask that yeah it will come. It maybe give us month or two. Month or two. I mean so based on that we also think and speak like that. But actually yes it see as I said is whenever it’s going to happen, it will happen. A team come complete team is working 247 on it because it’s our absolutely, I mean for us star product and we are, our team is absolutely working on it. We are trying our best.
Unidentified Participant
No, I understand that. And congratulations you know for developing such a product in India and that that tells a lot about the R D team of your R D team. And I, I wish that you come up with such new products and make India proud as well and the investors. Right. So getting to the validation part usually this for example if you are sending this isoteric acid to some company for that validation, let us assume like you know, a conservative scenario usually. How much time does it take for. This validation to complete? Is it 6 months, 9 months, 1 year? What is the time frame usually when you are sending such batches to a company which wants to test your product.
Nahoosh Jariwala
When we talk to them from there to they doing search about us on Internet, they coming and visiting us or having couple of zoom meetings. Then the sample permission is given to send samples. Then the sample approval, then lots of other paperworks are required to be done. Then sending a bulk supply, then the validation happening with the product and stability, then it going to the actual consumers and then finally it’s coming. So I mean for every company it’s a different thing. So I mean it’s. It’s taking its own time. One has to take it in a positive way because then once this thing happens some other company it comes, then it will also require this long time yeah, we are lucky that when there are no very few manufacturers are there we are taking an entry.
So it’s going to be good thing for us for long term. It’s going to be a long term business.
Unidentified Participant
So clearly there is a very high entry barrier.
Nahoosh Jariwala
Yeah. And if entry would have been easy then any Tom, Dick and Harry could have come.
Unidentified Participant
Got it, Got it. That’s from my side, sir. Thank you so much.
operator
Thank you. Participants who wish to ask a question may please press start in one at this time. The next question is from the line of Meera, an individual investor. Please proceed.
Unidentified Participant
Hello sir. Thank you for the opportunity again. So as you mentioned in the previous question that the cost, the new raw material which we are able to source on the domestic sources would be ready by around November. So the cost range for the for that raw material is at par with the previous cost level or would it be higher or lower?
Rajen Jhaveri
Lower.
Unidentified Participant
Okay. Okay. So if isotearic acid also picks up the pace and we get like lower cost level from the new raw material domestic source, so can we like expect 8 to 10% EBITDA margins for the next year like FY27?
Rajen Jhaveri
I mean see this US duty issue has to settle. First of all.
Nahoosh Jariwala
Lots of lectures are going on right now really giving.
Rajen Jhaveri
At 51% duty.
Nahoosh Jariwala
So so many things are going right now.
Rajen Jhaveri
To predict anything.
Unidentified Participant
Okay, okay.
Nahoosh Jariwala
Any chemical industry, I mean they are going to say the same thing.
operator
Due to time constraints. That was the last question. I now hand the conference over to the management for the closing comments. Thank you. And over to you sir.
Rajen Jhaveri
Thank you all for participating in this earnings conference call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR managers at Velorum Advisors Mumbai. Thank you.
Nahoosh Jariwala
Thank you.
operator
Thank you on behalf of Fairchem Organics Ltd. That concludes this conference call. Thank you for joining us. And you may not disconnect the line.