Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Fairchem Organics Ltd (NSE: FAIRCHEMOR) Q4 2026 Earnings Call dated May. 07, 2026
Corporate Participants:
Bhavesh Bipinchandra Shah — Chief Financial Officer
Nahoosh Jariwala — Chairman and Managing Director
Analysts:
Purvangi Jain — Analyst
Chirag Vakharia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY26 conference call of Fairchem Organics Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by Pitching Star then zero on your touchstone phone. I now hand the conference over to Ms. Parangi Jain from Velouram Advisors. Thank you. And over to you, ma’.
Am.
Purvangi Jain — Analyst
Thank you. Good afternoon everyone and a warm welcome to you all. My name is Turrangi Jain from Valerim Advisors. We represent the investor relations of Fairchem Organics Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the fourth quarter and financial year ended 2026. Before we begin, a quick cautionary statement. Some of the statements made in today’s Concord 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 and information currently available to the 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. I would now like to introduce you to the management team. Joining us on today’s call, we have with us Mr.
Naush Zariwala, Managing Director and Chairman and Mr. Bhavesh Sa, Chief Financial Officer. Without any dealing, I would like to hand over the call to Mr. Bhavesha to begin with the financial highlights. Thank you. And over to you sir.
Bhavesh Bipinchandra Shah — Chief Financial Officer
Thank you. Thanks and good afternoon everyone. Welcome to the earning call for Q4 and 12 months ended FY26. For the quarter under review, the revenue from the operation stood at rupees 117 crore reflecting a 3.2% year on year decline from the corresponding quarter. EBITDA for the quarter was 8 crores with EBITDA margin of 6.9%. The adjusted net profit after tax for the quarter stood at rupees 3.7 crores. For the year ended FY26, the revenue from operations stood at 460 crores. A decline of 14.5% against the previous year.
The EBITDA was 22 crores with a EBITDA margin of 4.7 crores. The net profit after tax stood at 6.2 crores. The domestic sales contributed 91% of the total revenue. The total volume sold was 44,000 tonnes against 54,000 tonnes in the previous year. During Q4, we have successfully completed the buyback of 4.25 lakh shares which has increased the promoter holding from 6.2% to 63.2%. With this, I’ll hand over the call to our CMD, Mr. Navaj Advai.
Nahoosh Jariwala — Chairman and Managing Director
Thank you Bhavats. As we close the FY26, I want to take a moment to share our operational perspective on the quarter and more importantly, the road ahead. The Q4FY26 continued to present a mix environment. Our revenue from operations saw a decline of 3% on year to year basis driven largely by softer offtake from the paint industry which as you are aware, has been navigating its own structure adjustments over past several quarters. That said, I am pleased to note that our EBITDA margins improved to 6.8% during the quarter.
This improvement was primarily supported by better price realization in the domestic market as the pressure from lower price imports moderated to quite an extent on the external environment. While we remain watchful of evolving macroeconomic situation, including the uncertainty arising from the ongoing Middle east crisis and its potential impact on global supply chains and commodity prices, we are aware, at the same time consciously optimistic about trajectory ahead. The continued progress on the lower tariff framework with us, the prospect of free trade agreement with UK and EU and the recent depreciation of rupee together has created a meaningful tailwind for our export competitiveness.
Despite the near term uncertainty, we remain quite confident and committed to navigate this environment with discipline and resilience. We are confident that steps we are taking today will position us well for the future. With that, I open the floor for question 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 N1 on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star N2 participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants. Anyone who wishes to ask a question, please press star N1. Participants, you may please press Star AND one to ask a question.
First question is from the line of Rakesh, an individual investor. Please go ahead.
Bhavesh Bipinchandra Shah
Hello? Hello. Am I audible?
Nahoosh Jariwala
Yes, you are audible.
Bhavesh Bipinchandra Shah
So the paying segment has been. Hello, we
Nahoosh Jariwala
Can hear you. Yeah,
Bhavesh Bipinchandra Shah
Yeah. The pain segment has been the primary demand
Operator
I’m sorry Mr. Jain, can you please repeat your question? We are unable to hear you.
Bhavesh Bipinchandra Shah
Great. The pain segment has faced some headwinds over the past few quarters. So do we see any recovery?
Nahoosh Jariwala
Yes, we have started seeing recovery during the month of March and even during this quarter we see a robust recovery happening.
Bhavesh Bipinchandra Shah
My second question is regarding the company started revenue. So we were targeting nearly 20,000 million. Any guidance regarding that?
Nahoosh Jariwala
Oh, that’s a very very long term future. I mean that is something which is a vision which is we are working on. So if it’s after five years.
Bhavesh Bipinchandra Shah
Okay, that was it. Thank you.
Nahoosh Jariwala
Okay,
Operator
Thank you. Before we take the next question I remind to all the participants you may press star and one to ask a question. We will take our next question from the line of Banisha from an individual investor. Please go ahead.
Bhavesh Bipinchandra Shah
Hello. So my first question is on the FTA with the EU and uk. What specific product stands to benefit the most? For example like the isocyric acid or dimer acid or others. And what is the current duty differentials that makes this market attractive? Once the FDA is in place
Nahoosh Jariwala
Both isospheric and dimer will hit the duty. 10% duty will help both isosteric and dimer. That is more important. And as regards the duty differential between other countries and India we are on par with all the countries. So I mean it’s healthy competition for us when we are putting our price to US buyers.
Bhavesh Bipinchandra Shah
Okay sir, also I have seen one more observation like power and fuel cost has declined significantly in Q4 FY26 to INR 60 million from INR 80 million in savings in Q5 or API. Is this a result of the energy audit?
Nahoosh Jariwala
Yeah, we did for one year we, I mean during the preceding all year we did the energy audit of the plant. And based on that we looking at the pbic. We invested in electrical equipments, pumps, motors, we reduced our. We invested in heat exchangers etc and based on that this achievement has been there and we are, it’s still ongoing. We expect further reduction in the energy cost.
Bhavesh Bipinchandra Shah
Thank you.
Operator
Thank you. Next question is from the line of from Tabla family office. Please go ahead.
Bhavesh Bipinchandra Shah
Hi, my first question is with regards to our margin. So going forward are we expected to go back to what was our FY25 margin of EBIT? Margins of around 8% if the situation normalizes or are we going to see a further margin expansion? Also considering the initiatives we have taken in the last year to improve the cost structure and secondly on the long term revenue growth we are saying that we Are going to trying to achieve 30, 20,000 by FY30. So can you tell us that where actually this expansion in revenue which we are planning to see is coming from?
Nahoosh Jariwala
Margins are going to be better this year. I mean, obviously we are targeting to breach 8% margins. We are targeting and we are fairly confident we will be able to breach that. That is one thing. And as regards the revenue thing, currently we are. Our plant is of 80,000 tons. And we are working at around 65, 66% capacity utilization. We are confident in next two years our plant would start working at more than 95% capacity utilization. And second thing is we will be adding one new raw material which is based on a new novel process which we have been seeing.
And so yes, based on that, this is the vision which we feel we might be able to reach
Bhavesh Bipinchandra Shah
At 95%. Also the EBIT margin will remain around 8%. Or are we going to stand? Can it reach even further up considering that
Nahoosh Jariwala
It can creep up? Yeah. Operating leverage will come here.
Bhavesh Bipinchandra Shah
This additional product. Is this also in the paint industry or is a more of a cosmetic product?
Nahoosh Jariwala
So it’s basically from the oleochemical basket only.
Bhavesh Bipinchandra Shah
Okay, thank you.
Operator
Thank you. Next question is from the line of Chirag Vikarya from Badrani Finance limited. Please go ahead.
Bhavesh Bipinchandra Shah
Sir, wanted to get a sense from you for financial year 26. In terms of turnover, sir, how much contribution is from dimer acid, linic acid and isotelic acid. If you can throw some light.
Nahoosh Jariwala
So dimeric acid has contributed. Just a minute. The dimer acid has contributed close to around 140 crores. And isosteric acid has contributed 26 crores. 30% and around 5 to 6%.
Bhavesh Bipinchandra Shah
I did not get it.
Nahoosh Jariwala
Around 25, 30% and 5%.
Bhavesh Bipinchandra Shah
And Lionic linoleic acid, sir.
Nahoosh Jariwala
Also linoleic.
Bhavesh Bipinchandra Shah
Okay. Okay. Sir. And in terms of volume? Sir, I did not get. You are saying for FY20 will give it a volume of how 40? How much? How much time? So
Nahoosh Jariwala
Q4. We did 10,500.
Bhavesh Bipinchandra Shah
Touch. And for the whole year we have done 44,000. And this for FY27. How do you see this panning out?
Nahoosh Jariwala
We expect to reach around 80% capacity utilization
Bhavesh Bipinchandra Shah
Of the 120,000 ton. For the 80,000. Sir.
Nahoosh Jariwala
Of 80,000.
Bhavesh Bipinchandra Shah
Okay.
Operator
I’m sorry, Keshav, we are not able to hear you.
Bhavesh Bipinchandra Shah
Hello, Is this. Hello. I hope my voice is audible.
Operator
Yeah. Please proceed.
Bhavesh Bipinchandra Shah
Yeah, so I wanted to ask you that our this what used to be Adani Wilmer, sir. Now they are Forward integrating into olio resins. So I understand since they are already into edible oil refinery. So whatever raw material we are probably buying from them. So for them it is a forward integration. So sir, what kind of impact can it have on our business and our margins?
Nahoosh Jariwala
Adani Dilmar is already in oleochemicals since year 2010. They are already in the. Basically they are work on utilizing the palm based products in their olio. The products what we are using are all soft oil based products and which are produced in a very small quantity to the tune of 1% of the crude oil. So it’s. I mean the equipments and market and process everything is different for both the products.
Bhavesh Bipinchandra Shah
Understood sir. And sir, also now recently we are hearing a lot about Chinese anti involved. They are. They have basically at least they are talking about stopping the aggressive dumping. So. So are we seeing any kind of relief on that count?
Nahoosh Jariwala
Yes, we have seen. We have already seen that since February end.
Bhavesh Bipinchandra Shah
Okay so so then how much further improvement can we expect for FY27? If you could give us some broad outline what kind of top line
Nahoosh Jariwala
It’s not possible for me to really see. What we are saying is we will be. We are targeting to work at 75, 80% capacity utilization and our margins obviously will improve because there is no major dumping happening from China’s.
Bhavesh Bipinchandra Shah
Answer now sir, what kind of improvement in realizations have we seen in recent times?
Nahoosh Jariwala
Fairly good. Fairly
Bhavesh Bipinchandra Shah
Good. Yeah,
Nahoosh Jariwala
Because Chinese dumping is not happening. So our realization we are able to sell it a good rate.
Bhavesh Bipinchandra Shah
So at least in percentage terms if you could shed some light or, or like per kg how much have our major products increased?
Nahoosh Jariwala
No, it won’t be possible for me to say shares even percentage
Bhavesh Bipinchandra Shah
Wise like 10, 5% something like broad directional distance.
Nahoosh Jariwala
Yeah, around 8 to 10% improvement has happened.
Bhavesh Bipinchandra Shah
Answer Also rupee has fallen quite significantly.
Nahoosh Jariwala
Yeah, that is also. That is increased
Bhavesh Bipinchandra Shah
The import cost.
Nahoosh Jariwala
That is
Bhavesh Bipinchandra Shah
What will improve. That will add to our bottom line.
Nahoosh Jariwala
It is helping us in our exports.
Bhavesh Bipinchandra Shah
Great sir, thanks a lot. Thank you.
Operator
Thank you. Next question is from the line of Maitricha from Sapphire Capital. Please go ahead.
Chirag Vakharia
Yeah, hello, good evening. Am I audible?
Nahoosh Jariwala
Yes.
Chirag Vakharia
Yeah, a few questions on the export. So you mentioned a lot of tailwinds that are happening on the export side. So any color on how the growth is going to be like? So what is our current contribution from the export and how we’re going to scale that up going forward?
Nahoosh Jariwala
Just a second. So our exports is close to around 9%. So I mean in last year it was around 8 to 9%. We expect this to go by from 8 to 9% to around 20%.
Chirag Vakharia
There’s going to be a major growth coming in on the export. How do you see the margin?
Nahoosh Jariwala
They’ll be as similar to what margins we are making in domestic market.
Chirag Vakharia
So the margins are similar to visualizations are better.
Nahoosh Jariwala
Yes, yes, yes.
Chirag Vakharia
And also you the long term target of 2000 crores that you have any new verticals we are entering in or are we like.
Nahoosh Jariwala
I mean we’ll be adding 40,000 tons to our 80,000 tons capacity of a new product. So I mean it’s, it’s going to take long. It’s basically five years.
Chirag Vakharia
Yeah, but that kind of requires a 40, 45 growth generates. Are we like confident of doing that linearly over the next five, four, five years?
Nahoosh Jariwala
Yes, we feel that, I mean we feel that we’ll be able to. Yeah. So
Bhavesh Bipinchandra Shah
The efforts were on since last two, three years. In fact last two years have been our washed out years. So you have been seeing from the context of. So this activities are all started from FY23 onwards. Unfortunately because of macro environments we underperformed in last two years. But yes, efforts were going on since FY22 levels.
Chirag Vakharia
So you have received from the
Bhavesh Bipinchandra Shah
Context of eight years
Chirag Vakharia
And the new. You said the raw material that you’re going to add with 40,000 metrics and so that kind of raw material has a higher, better margin, a better realization. What sort of product are we looking at?
Nahoosh Jariwala
No, it’s a very. It’s a newer raw material, obviously part of your chemical stream following a novel process and we’ll be doing it for the first time in India.
Chirag Vakharia
Okay. And similar kind of customers are we targeting for that. So we’ll target the existing customers for the growth on that as well. Yeah,
Nahoosh Jariwala
Yeah, yeah, yeah, yeah.
Chirag Vakharia
Okay. Yeah. That is it. From my say thank you.
Nahoosh Jariwala
Thank you.
Chirag Vakharia
Thank
Operator
You. Next question is from the line of Chirag Vikariya from Madhurani Finance Ltd. Please go ahead.
Bhavesh Bipinchandra Shah
So few updates. What is the custom duty right now, sir? Is it the same as 16 and a half?
Chirag Vakharia
Yeah,
Nahoosh Jariwala
It is 16 and a half right now.
Bhavesh Bipinchandra Shah
Okay. And the last time you highlighted that vegetable oil prices were up. So how are they behaving now as they cool off?
Nahoosh Jariwala
They have remained stable. They have remained stable. What they were. So they remain stable.
Bhavesh Bipinchandra Shah
Enter on the import duty on the dimer acid. Has that, has that changed or is it same? No,
Nahoosh Jariwala
It’s 7.5%.
Bhavesh Bipinchandra Shah
Okay. And so this the new product that we are suggesting should come in FY27 or FY28
Nahoosh Jariwala
20. It should be around 27:28 somewhere that time. And then slowly it will pick up.
Bhavesh Bipinchandra Shah
The worst quarter for us is over now. And we should bottom out now.
Nahoosh Jariwala
Yes. Yes, sure. For sure.
Bhavesh Bipinchandra Shah
Thank you sir.
Operator
Thank you. Next question is from the line of Sanjay Shah, an individual investor. Please go ahead.
Bhavesh Bipinchandra Shah
Hello sir. Am I audible? Yes. Yeah. So my first question was about your margin. So for Q4FY26 the revenue declined 3.2% YoY. But EBITDA improved sharply to 6.84% from 3.64% in Q4FY25. So I wanted to ask was this margin recovery driven more by lower raw material cost, reduced China import pressure or better product mix? And also how sustainable is this improvement heading into the next quarter?
Nahoosh Jariwala
It is based on better price realization because of less dumping happening from China. That is one thing. And secondly we. I mean we see the same thing continuing even during this year.
Bhavesh Bipinchandra Shah
Okay, so thank you. That helps a lot. My second question was that the bypass fat product from PFID and the new raw material for niche specialty chemicals as both mentioned are your new product initiatives. So what is the current stage for these? Are they in lab trials or commercial
Nahoosh Jariwala
Bypass Fed? We’ll be putting that plant in operation next month. And as regards the new product, by end of Q2 we should start the plant.
Bhavesh Bipinchandra Shah
So sir, by when should investors expect our revenue contribution? From Q2 only?
Nahoosh Jariwala
No, it will take. I mean for bypass that it can start from Q3 onwards slowly. But for the new product it will take minimum two, two and half years because of validation and everything which is a long process.
Bhavesh Bipinchandra Shah
Okay, sir, got it. Thank you. And my last question was regarding your dividend. So for this year you have recommended a dividend of rupees one per share which is down sharply from seven and a half rupees per share last year. So is this reduction primarily a function of the temporary earnings drop or more of a conservative long term or dividend policy especially?
Nahoosh Jariwala
No, no, no. It’s basically because of temporary earning loss.
Bhavesh Bipinchandra Shah
Okay, so good. Thank you so much.
Operator
Thank you very much. Next question is from the line of Cable Shah from Jeeta Investments. Please go ahead.
Bhavesh Bipinchandra Shah
Thank you for the opportunity. Sir, my first question was regarding you mentioned that FY26 capacity was around 40. Like you know, the production was around 45,000 tons. And next year we expect to do 75 to 80% utilization on a total capacity of 80,000 tons. Is that understanding right?
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
Okay. So the top line basically now should go back to where we were in 2000, let’s say FY24, FY25. Yes. Kind of a thing where.
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
And is this majorly because of linoleic demand? Linoleic acid demand coming back in the pinch industry, Is it predominantly because of that?
Nahoosh Jariwala
No, no, no. It’s basically less something happening from China. So we’ll be able to sell more of material at the profitable price. That’s the only thing.
Bhavesh Bipinchandra Shah
Okay, okay. So we were restraining from selling and utilizing.
Nahoosh Jariwala
Yes, exactly, exactly.
Bhavesh Bipinchandra Shah
Okay, okay, understood. And also on the top of this, you said that pain sector has also kind of recovered a bit.
Nahoosh Jariwala
Yeah, somehow I mean, we have a feeling that since last two months, pain sector has started looking up.
Bhavesh Bipinchandra Shah
Okay. And while it’s doing a bit better, do we also see also realizations are getting better and margins are, you know, don’t be. Yeah, yeah, yeah. A little
Nahoosh Jariwala
Bit. Yeah, a little bit better. Little bit better. So overall we feel confident that we’ll be able to breathe 8% margin.
Bhavesh Bipinchandra Shah
But sir, with no Chinese, much lesser Chinese dumping and you know, the better capacity utilization, shouldn’t the margins actually go back to what we used to do, like 12 to 15% range?
Nahoosh Jariwala
That is our dream. Obviously we’ll work hard to achieve that. I mean, we won’t let no stone unturned to reach those levels. We try our best.
Bhavesh Bipinchandra Shah
Okay, okay. And sir, how is our progress on isosteric acid? I know like fairly
Nahoosh Jariwala
Good, fairly good. But what happened was because of the 50% duty thing, our US marketing was on hold, which has now started started again. And as this is going in cosmetics, the timeline is very long. I mean, because they need to study lots of things. So approvals take once the sample goes and approval takes minimum six, eight months a year. And then the first commercial shipment happens that also after first shipment another six, eight months is taken. So it’s a long dawn thing. It’s. I mean that’s absolutely fine with us because I mean it creates entry barriers for others in future.
So I mean that’s absolutely fine as our product.
Bhavesh Bipinchandra Shah
I
Nahoosh Jariwala
Mean product quality is fine. We are comfortable. Maybe if not today, tomorrow it will pick up.
Bhavesh Bipinchandra Shah
Okay. So any early sign that we see because of tariffs coming off and this FTA is obviously.
Nahoosh Jariwala
Yeah, people have started asking for samples now, they are interested.
Bhavesh Bipinchandra Shah
So FY27 28 could be years when we could see meaningful ramp up for isostatic as well.
Nahoosh Jariwala
Yes, yes.
Bhavesh Bipinchandra Shah
And that would be. That is very high margin product as you had mentioned. So that’s the same. So that would be an additional lever for our margin improvement. Yes.
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
Okay. Okay. Okay. Understood. Good. That’s about it. Thank you for answering the questions.
Operator
Thank you. Next question is from the line of Sanjana Kamath, an individual investor. Please go ahead. Sanjana, your line is unmuted. Please proceed with your question.
Chirag Vakharia
Hello.
Operator
Yes, you are audible.
Chirag Vakharia
Yes, Hi. I had a few questions. So the US level playing field tariffs which are cited as a positive for the exports. So have you already commented or have you started receiving
Operator
Inquiries for restarting the US export? Specifically on the dimer asset side,
Nahoosh Jariwala
We have started exports. In fact commercial exports have started since two months though on small scale. But they have started.
Operator
Okay, so what would be the realistic timeline for let’s say meaningful export volume to resume back
Nahoosh Jariwala
Around six months max.
Operator
Okay. And also you had set a target for exports to reach almost 50% of the sales eventually. So currently the exports, they still appear to be very small part of the revenue.
Nahoosh Jariwala
When we said 50% it was based on the current it wrong. I mean products getting exported from current 80,000 tons capacity and 40,000 of new upcoming capacities. So based on that we had recommended so major is going to come from the new 40,000 tons capacity.
Operator
Okay, got that. So what would be the current export percentage and what would they look like in like let’s say 12 to 14 months? What would the export roadmap look like?
Nahoosh Jariwala
Currently it’s around 8 to 10%. We expect to reach anything about 20%.
Operator
Okay. And if possible could you share like you mentioned the rupee depreciation as a tailwind for our export competitiveness. Right. So like how much does 1% move in your rupee impact your export realization? Do we have any data on it? Could you share? No,
Nahoosh Jariwala
No, because see, I mean it’s not only one way because if the rupees are raw material also go up a little bit. Our energy cost also in form of coal also would go up little bit. But the export realization is much higher than these two things. So we feel it’s. I mean devaluation helps us. No, we have don’t have exactly any figures.
Purvangi Jain
Okay,
Operator
Thank
Purvangi Jain
You so much,
Operator
Sir. Thank you. Next question is from the line of Ketan Archera, an individual investor. Please go ahead.
Bhavesh Bipinchandra Shah
Hi, thank you for the opportunity. Sir, can you tell us in FY26 what was the concentration in terms of the industry where we supplied our products? Like you know, paints being the highest and what are the next highest industry and so on so forth. At least top three.
Nahoosh Jariwala
See, basically our product goes in making of both the products are both the prime products. Going making of things polyamides which are part of epoxy hardeners and drilling fluids. So I mean everything is fairly equal ratio for all the market is there. So I mean that’s not been any major concentration on a particular market or anything. Basically our capacity utilization is going to be better because we are now finding it the selling of material is viable. Formally it was because of Chinese competition.
It was none not viable. So we were not. We were deliberately producing less and pending less.
Bhavesh Bipinchandra Shah
Okay. Okay. And in terms of exports, so what industries we would be exporting to in terms of applications,
Nahoosh Jariwala
Same industry. Yeah. Epoxy hardness and dwelling fluids.
Bhavesh Bipinchandra Shah
Okay. Okay. And in terms of the. These nutraceutical or the. Where are we currently? What was our contribution from this product?
Nahoosh Jariwala
No, right now we are not doing much on that business. That plant is uh, I mean not being utilized right now because the vitamin E market is very. I mean it’s not doing that great. So I mean we are not doing business currently. So once demand reaves up we’ll start that plant again.
Bhavesh Bipinchandra Shah
Okay. Okay. Thank you so much. Those are my questions. Vishwa.
Nahoosh Jariwala
Thank you.
Operator
Thank you. Next question is from the line of Amit from Robo Capital. Please go ahead.
Bhavesh Bipinchandra Shah
Thank you. So my first question is on the 40,000 new capacity. So my understanding is that revenue from that will come after two years. Right?
Nahoosh Jariwala
Then start coming after two years.
Bhavesh Bipinchandra Shah
Yeah. Correct. And what can be ballpark revenue? Any directional number on what can be revenue.
Nahoosh Jariwala
It’s a high value. It’s a fairly high value product. So I mean theoretically speaking yes. 800,000 crores.
Bhavesh Bipinchandra Shah
Right. And also I think the margins will be better than our traditional. I think much,
Nahoosh Jariwala
Much better. Much. Yeah. Should be
Bhavesh Bipinchandra Shah
Closer to 15, 18% type of margin. Right? Yeah,
Nahoosh Jariwala
The margins look at this stage and on the drivender we did the project and you’ve done the calculation, the margins look fairly robust.
Bhavesh Bipinchandra Shah
Right sir. And I mean was there was some delay on this. I mean we have not been tracking the company for last few quarters. I have just joined back after. So there was some delay on this. Right. And could you throw some light on the delay? Like what was.
Nahoosh Jariwala
Yeah, basically last. If you really see our last two years have been bad years because of major changes happening in the raw material prices whereby the duties went up from 5.5% to as high as 27.5% on our raw materials and dumping happening on our finished products from China. So combined effect was that. And so we were not going very aggressively on expansion by taking undue. I mean by taking debt. So now Once things have stabilized, we have started doing it
Bhavesh Bipinchandra Shah
Right. So that you know the macro situation has now improved to your favor. I mean to your advantage now become more neutral now. Yes,
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
And. And it requires some product development. I think it’s my understanding if my memory serves me right
Nahoosh Jariwala
That work has already been done. We have. Or we have a lab unit. We have pilot plant unit. And now we have the plant which will be commissioning in Q2.
Bhavesh Bipinchandra Shah
Right. And after that. So we will then be in touch with customers to get the products approved. Right. It probably has a longer cycle.
Nahoosh Jariwala
First step is to stabilize the plant. Second step is to validate your process. Third step is to get send out sample for approvals. I mean that’s the reason we are saying that it’s going to be two two and a half years cycle.
Bhavesh Bipinchandra Shah
Professor, that’s it for mine. Thank you and all the rest.
Operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question they press star and one. The next question is from the line of keshavk from countercyclical PMS. Please go ahead.
Bhavesh Bipinchandra Shah
Just wanted a confirmation. You mentioned 16.5% custom duty is is on United States for export from India. No,
Nahoosh Jariwala
No, no. That was only. That is a raw material. Raw material import. Vegetable oil imports have 16.5% d.
Bhavesh Bipinchandra Shah
Okay, got it. Answer. You mentioned 8% operating margin is something that we can expect for this financial year.
Nahoosh Jariwala
Yes. Yeah. This should continue. Understood,
Bhavesh Bipinchandra Shah
Sir. And sir, what has to happen for our margins to increase to the erstwhile levels of let’s say 11. I am not going to 16, 17% that we did in 2020-2022. But what has to happen for our margins to at least go into double digits?
Nahoosh Jariwala
I mean if this things continue like this. Volume growth happening and devaluation happening on rupees side and our energy saving initiative working. We can enter double digit.
Bhavesh Bipinchandra Shah
Understood, sir. Answer. Exports you mentioned in FY27 itself we are expecting 20% of sales.
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
Yes. Okay, sir. Understood, sir. Thank you very much.
Operator
Thank you. Next question is from the line of Dheerasha from Philip Capital. Please go ahead.
Bhavesh Bipinchandra Shah
Yeah. Good afternoon sir. Thanks for the opportunity. What was the volume that we did in FY25? So this year we did 44,000
Nahoosh Jariwala
People.
Bhavesh Bipinchandra Shah
54,000.
Nahoosh Jariwala
Yeah, 54,000.
Bhavesh Bipinchandra Shah
Yes, 54. So this year 44.
Nahoosh Jariwala
Yes, this year 44.
Bhavesh Bipinchandra Shah
Okay, answer. As you mentioned, the Chinese dumping has started coming down. Or it has almost been negligible. So what was the Chinese used to be earlier
Nahoosh Jariwala
Chinese
Bhavesh Bipinchandra Shah
Dumping? The dumping.
Nahoosh Jariwala
I mean. No. Basically they were selling At a lower price. Daimler.
Bhavesh Bipinchandra Shah
Yes, exactly. So my point is that only. So what was the import that was coming from China?
Nahoosh Jariwala
Oh, it’s around. Coming around. Equal to what we were selling in domestic market. 800 to 1000 tons per month.
Bhavesh Bipinchandra Shah
Okay. And this is only for the one product. There were also other products, you know, which we are dealing with. And there the China import was also there
Nahoosh Jariwala
Product. No, this is the only product.
Bhavesh Bipinchandra Shah
Okay. You mentioned dimer assets contributed 140 crore to the total revenue. FY26.
Nahoosh Jariwala
Yes, yes.
Bhavesh Bipinchandra Shah
Okay. Okay. And for my second question, as you mentioned, export contribution to rise to 20%. So this geography we are more focused.
Nahoosh Jariwala
US, Europe, Japan.
Bhavesh Bipinchandra Shah
Okay. So even currently the US Europe and Japan is contributing 8%. And going as this three geography will contribute to the higher revenue.
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
Okay. And so this 40,000 new product that you are talking about that we are going to commission in Q2, what’s the CA that we have incur for that
Nahoosh Jariwala
All? I mean if a first stage Catex is around 20 or 25 crores, what we have coming done.
Bhavesh Bipinchandra Shah
So this will add to the 40,000 ton capacity or maybe much lesser.
Nahoosh Jariwala
No, no, no, no, no. It will be necessary. It will add up as the demand grows.
Bhavesh Bipinchandra Shah
So initially we’ll start with lesser capacity as you are mentioning.
Nahoosh Jariwala
Exactly, exactly. Exactly.
Bhavesh Bipinchandra Shah
So this will be how much of them
Nahoosh Jariwala
It will. I mean we’ll. It should be around 8,000 ton.
Bhavesh Bipinchandra Shah
Okay. So maybe by within next two years once we get our approval and customer, you know, side we will be, you know, touching almost 40,000 ton capacity.
Nahoosh Jariwala
Yeah. I mean because I mean overnight you cannot expect to penetrate the market. I mean there is no way you can dismantle the competitors. So I mean we expect that within 5 years we’ll be working, we’ll be able to reach 40,000 utilization.
Bhavesh Bipinchandra Shah
5 years.
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
Okay. So within maybe next 5 years or maybe 40,000 will give us 800 to 1000 crore.
Nahoosh Jariwala
Yes, yes.
Bhavesh Bipinchandra Shah
Okay. In the paint side, since we have a larger user industry, specifically paint and paint, there are also new players which are reversed. So are we also supplying to those players?
Nahoosh Jariwala
Yes, we are supplying to all including
Bhavesh Bipinchandra Shah
Even jsw.
Nahoosh Jariwala
JSW is on water. In water based pains. It’s a different segment.
Bhavesh Bipinchandra Shah
Okay. Okay. And so lastly on the working capital side, if I look at last two years, inventory days have gone up, you know, maybe substantially. So is there any chance of improving our working capital cycle going there?
Nahoosh Jariwala
No. Working capital is expected to remain at around between 100 to 120 days.
Bhavesh Bipinchandra Shah
Okay. So inventory days could also remain at the higher level because it used to be around 50, 60 days. Now it has gone to even 1995 days. Sir.
Nahoosh Jariwala
Yes. If the volume increases. It will. Since the denominator will improve. It will. It will improve a bit from the current level of 120 days.
Bhavesh Bipinchandra Shah
Okay. Okay. Thank you so much for that.
Operator
Thank you. Next question is from the line of Chirag from Bodrani Finance Ltd. Please go ahead.
Bhavesh Bipinchandra Shah
Wanted to understand on this. You know you said that the pressure from the Chinese import has come down, sir, have you been able to figure out why has it happened so.
Nahoosh Jariwala
No, no, it’s not possible. But overall Chinese companies in all, practically all the products have reduced. I mean something has happened whereby. I mean all the products, what they were dumping is somehow going down.
Bhavesh Bipinchandra Shah
So has there. Has there been any export restriction on. On their dumplings being put back? Any, any ideas?
Nahoosh Jariwala
No, no, no. But quite a few products, whatever the export incentives Chinese government was giving has been removed which was as high as 15%
Bhavesh Bipinchandra Shah
In lot of. I
Nahoosh Jariwala
Mean so I mean obviously because of that only the Chinese would have done that. And they were selling at a price which was. I mean too low for. I mean so it must. They must be making losses.
Bhavesh Bipinchandra Shah
Okay. When we supply, you know most of we supply to all the paint. So we don’t have restriction to supply the material to any paint company. Right. We are not bound.
Nahoosh Jariwala
No, no, no.
Bhavesh Bipinchandra Shah
Okay. And so the last thing is what is the capex for 27 and 28
Nahoosh Jariwala
This year there won’t be any Capex except for anything related to energy savings.
Bhavesh Bipinchandra Shah
Okay, that would be how much?
Nahoosh Jariwala
No, I mean that is whenever the things come up some because we have just finished one energy audit. Second energy audit is happening. If the payment is less than four years we’ll go for it
Bhavesh Bipinchandra Shah
For 28. What would be the number?
Nahoosh Jariwala
I mean that it’s. Everything depends on 28 for what happens to our new product. If that picks up we’ll go for investment. Otherwise not current business doesn’t require any capex.
Bhavesh Bipinchandra Shah
Right. So now we are just focused on improving the top line, right?
Nahoosh Jariwala
Yes, exactly.
Bhavesh Bipinchandra Shah
Okay, thank you.
Operator
Thank you. Next question is from the Ren of Keshavkar from Counter Cyclical pnl. Please go ahead.
Bhavesh Bipinchandra Shah
So I’m trying to understand that when we did our peak revenue in let’s say FY23 of roughly 650 crore. So. So that time what was the sales volume that we did? Roughly
Nahoosh Jariwala
54,000.
Bhavesh Bipinchandra Shah
No sir, 54 was for FY25. For FR23 also it was 54,000 only
Nahoosh Jariwala
So which year you are asking?
Bhavesh Bipinchandra Shah
Sir, I am asking for FY23. When we did peak revenue.
Nahoosh Jariwala
54,023.
Bhavesh Bipinchandra Shah
Okay, so it was so. So basically our volume was flat at around 54,000 for till FY25 and only last year it fell to 44,000.
Nahoosh Jariwala
Yes. No, in between FY24 it has gone up to 63,000 also.
Bhavesh Bipinchandra Shah
Okay, 63,000. Okay sir, but it doesn’t reflect in the revenue number. So I’m assuming the prices must have gone down. And that is why despite the revenue going up, the despite the volumes having gone up in FY24, the revenue has actually come down year on year.
Nahoosh Jariwala
Yes, yes, yes.
Bhavesh Bipinchandra Shah
Now sir, what I’m trying to understand is that since you mentioned that Chinese government must be giving them some incentive, that’s why they were selling at the price which apparently looks as a loss making prices. But now that the dumping has stopped and prices have gone up by 18%. So don’t you think that now basically even if that export incentive from 15% we don’t know if it has become zero or maybe something like 5% or something in that vicinity. So the point is that can’t that dumping restart?
Because after all they must be having capacity. So now where is that capacity going? I mean
Nahoosh Jariwala
Maybe some sense would have prevailed that it doesn’t make any sense to lose money. I mean that is nutrient, that is the all possibility. That is. And I mean Chinese government can reintroduce that 15% incentive. I mean that is not in our hand but time in. I don’t think so. I mean for two years they played that game. I don’t think they will be able to do more. And that also during this current geopolitical situation.
Bhavesh Bipinchandra Shah
Yes sir, I’m absolutely with you on this matter. But my only point is that now that prices themselves have bounced back, so now even without additional Chinese government support, can’t the Chinese exporters, in light of the increased prices can’t they restart like dumping at the current price?
Nahoosh Jariwala
That’s not a problem for us because at this price we are happy.
Bhavesh Bipinchandra Shah
Understood, sir. And sir, now the thing is that whatever refinery byproduct we require can’t be import that byproduct from other geographies.
Nahoosh Jariwala
No, historically this because of the freight component. These by products they historically nowhere in world are being traded exported. This is normally you used wherever it’s generated, it is consumed domestically only
Bhavesh Bipinchandra Shah
Sir. And what is the pricing arrangement that we have with the refineries for their byproduct which is our raw Material.
Nahoosh Jariwala
It’s something. It’s a buy, sell. Basically it’s driven by market. It’s a commodity. Okay.
Bhavesh Bipinchandra Shah
Is it like monthly revision or quarterly? Yearly. Daily
Nahoosh Jariwala
Revision. Daily revision. Entering any long term contracts. It’s just like a commodity.
Bhavesh Bipinchandra Shah
Now if let’s say these seed oil prices come down then the raw material prices will also come down.
Nahoosh Jariwala
Yes.
Bhavesh Bipinchandra Shah
Okay. Understood. Sir, answer. What about the end product prices that we have with our customers? Like let’s say paint industry and so on. Is it a monthly.
Nahoosh Jariwala
It’s a buy sell. Again, maximum, it’s one month.
Bhavesh Bipinchandra Shah
Okay. Understood. Sir, I’m sorry to interrupt.
Operator
I’m sorry to interrupt. Keshan, please rejoin the key for more questions. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference. Kindly limit your questions to two per participant. Should you have a follow up question, please rejoin the queue. Next question is from the line of Ketan R. Chera, an individual investor. Please go ahead.
Bhavesh Bipinchandra Shah
Hi. Thanks for the follow up. Correct me if I’m wrong. I heard that we also import some raw materials. Is that correct?
Nahoosh Jariwala
No.
Bhavesh Bipinchandra Shah
We have option. But we
Nahoosh Jariwala
Are option. We don’t import. Right
Bhavesh Bipinchandra Shah
Now we are not important.
Nahoosh Jariwala
Yeah. Yeah. Against export we can import but we are not importing. Because I mean it’s not viable compared to the material what we are getting domestically.
Bhavesh Bipinchandra Shah
Right? Right. So I think this has been conversation with one of the earlier participants where he was mentioning that the devaluation of rupee we should actually be benefited. Because then you know we earn more in INR terms when we export. And I thought you said that. No. Because we also import. So that benefit is not there.
Nahoosh Jariwala
I didn’t say import. I said raw material. By words were raw material. Not imports
Bhavesh Bipinchandra Shah
But raw material we buy domestically only. Right?
Nahoosh Jariwala
Yes. Yes.
Bhavesh Bipinchandra Shah
Okay. So still if the INR is getting more devalued, we are not benefited so much. Is that understanding correct or. No,
Nahoosh Jariwala
Obviously we are getting not hundred. To the extent of 100% of devaluation. Partially will be 100. I mean partially we’ll be getting benefited in our exports. Yeah.
Bhavesh Bipinchandra Shah
But in a way our raw material will also increase. Since the
Nahoosh Jariwala
Devaluation is. I mean in both ways. No. India imports vegetable oil. So the price of vegetable oil to that extent is increase. To that extent, our byproduct, our raw material cost would go up. So not for us, for any company.
Bhavesh Bipinchandra Shah
Okay. Understood. Understood. Sure. Thank you so much. Thank you.
Operator
Thank you. Ladies and gentlemen, we will take this as the last question. I now hand the conference. Over to the management from Ferrochem Organics Ltd. For closing comments.
Bhavesh Bipinchandra Shah
Yeah. Thank you very much for attending the conference. We’ll meet in the next quarter. Thank you. Thank you.
Operator
Thank you very much on behalf of FM Organics Limited. That concludes this conference. Thank you all for joining us today. And you may now disconnect your lines.