GHCL Ltd (NSE: GHCL) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
R S Jalan — Managing Director
Raman Chopra — Chief Financial Officer and Executive Director
Analysts:
Unidentified Participant
Mehta Vora — Analyst
Nigel — Analyst
Saket Kapoor — Analyst
Atul — Analyst
Aditya Khetan — Analyst
Jatindamania — Analyst
Presentation:
operator
The conference is now being recorded. It. It. It. It. Sam. Ladies and gentlemen, you have joined the GHCLS earnings conference call. Please stay connected, the call will begin shortly. I repeat, you have joined the GHCLS earnings conference call. Please stay connected, the call will begin shortly. Foreign Ladies and gentlemen, good day and welcome to GHCL’s Q1 Aqua 26 earnings conference call hosted by MK Global Financial Services 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Meath Vora from MK Global Financial Services Ltd. Thank you. And over to you sir.
Mehta Vora — Analyst
Thank you. Good afternoon everyone. Thank you for joining us on GHCL’s Q1 FY26 results conference call. I would like to welcome the management and thank them for giving us this opportunity to host them. We have with us today Mr. R S Jalan, Managing Director, Mr. Raman Chopra, CFO and Executive Director of Finance Mr. Manu Jain, General Manager, Investor Relations and Finance before begin this call I would like to point out that some statements made in this call may be forward looking and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.
I shall now hand over the call to the management for their opening remarks. Thank you and over to you sir.
R S Jalan — Managing Director
Thank you Meer. Thank you very much. Hello everyone, welcome to GSL earning call for the first quarter ended on 30th of June 2025. Our results and investor presentation has been uploaded on the stock exchange. I would now like to share some of my thoughts about the global soda scenario, domestic scenario as well as the GSL performance. First let me take the global scenario Overall globally the demand is muted and there is an oversupply situation. Prices are under pressure worldwide. Global uncertainty because of the tariff and other geopolitical situation are uncertain. In last two years 10 million tons of the SUDA ice capacity has been added mainly led by China and this year 1 million has been added.
Of course 1 million has been closed in Europe also and there is a likely chance of 1 million further getting added. In the remaining period of this calendar year 25 US demand and Europe demands are volatile whereas in China the demand last two years has been very robust. In 23 the demand growth was.
R S Jalan — Managing Director
In. Last year 24 calendar year it was 18%. However current demand in China is muted Almost flat. The second point which I want to highlight here is at this point of time across the globe and I would more specifically talk about China and other parts of Europe, the synthetic soda producers, they have not been able to cover their cost cap cash cost on the prices which they are selling. So this also indicates that there is a small risk of synthetic soda ice plants. Small synthetic soda ice plant with a high cost at the risk of closure.
Our understanding at this point over time globally is at least next two, three quarters is going to be challenging. And us of course on the other side the US economy is looking good and further clarity will come once your tariff clarity comes into the situation. Now come to the Indian scenario. Indian demand of soda’s growth has been good last year as well as in this first quarter. Also the demand growth is good. We expect the demand growth in this year should be around 5 to 6%. And as you all know, solar is one of the contributing factor in that.
However, because of the global oversupply situation and price under pressure, the overall demand market is oversupplied. Even some of the domestic players has also added some of the capacity and both this put together high import as well as the domestic production increase. Overall there is an oversupply in India and as per our understanding, initial understanding at this point of time is 26, 27 is likely to be a challenging year. Our understanding for the Q2 for us looks to be challenging of course because one is the sustainability and second is prices going to remain in the present.
R S Jalan — Managing Director
However, slight change in the global scenario can change the domestic scenario as well. Now let’s talk about the gscl. As I said, GSCL also got impacted because of the overall supply situation and the market price. However, because of in spite of this, I just want to share that in last two years 23, 24 versus the current scenario, the prices have dropped by 19% whereas our bottom line has been impacted less than 5%. This shows that the gap of this has been. We have been able to cover mainly by the two regions. One is the internal efficiencies which is around 50% of the benefits and the balance 50% is the price drop in the raw material.
This internal efficiency which we have been able to build has definitely is going to be sustainable. And this will give us a huge advantage going forward once the market situation becomes a normal situation. Our USP in GSCL we have a customer serviceability as a uniqueness in our supply chain. Our strategic agreement arrangement with the customers, our cost optimization which I just mentioned to you and Innovating and building raw material efficiencies. Each one of the USP we have and as you all know the balance sheet we have a strong balance sheet. We believe that these cycles of soda s will we have seen in the past also and we believe that we will be able to sustain this cycle very efficiently and once an upside happens in this definitely this will give us a huge advantage going forward so far as the future prospect is concerned.
I mentioned about the market outlook. In addition to that, as you all know that we are focused on product diversification, growth, sustainable and future financial prudence for the ghcl. Looking forward, we are very optimistic about India so that demand is likely tied to India’s robust growth story. As our economy grow, so will demand in the core sector like your detergent glass will also grow. We also see accelerated growth coming from new solar glass facilities which is a key part of India’s green energy mission. Our strategy at GSL is about decisively building what comes next. Our diversification and growth plan updates are agenda Our initial bromine and vacuum salt projects are underway and likely to be commissioned in FY26.
Greenfield projects are also moving in this thing. Long term strategic Investments this greenfield project represents our long term strategic investment and will deliver significant operational and financial gains. These projects are the pillar of our growth. These initiatives have been thoughtfully designed to reinforce GSL performance across market cycles for our people. We are a great place to work for the ninth year in a zone we are very bullish and confident on what we are doing. We have achieved significant operational efficiencies while challenging time is there and is likely to be there for few quarters. But our operational efficiencies and diversification will be permanent for our benefit.
We remain committed to creating sustainability sustainable value for our shareholders through strategic foresight and consistent executions. Thank you for your continued trust and support in GSCL. Now I hand over the call to Mr. Raman for his financial updates.
Raman Chopra — Chief Financial Officer and Executive Director
Thank you very much sir. Good afternoon everyone and a warm welcome to our earning call for the first quarter ended 30 June 2025. We have shown consistency in in delivering a performance on the back of our operational excellence and manufacturing efficiencies despite the unfavorable pricing trend at the industry level. As I share financial highlights with you, I wish to share certain insights. Revenue for the quarter came in at 823 crore compared to 849 crore in the corresponding quarter of the last year and 807 crore compared to Q4 of the last year. Although the MIP mechanism has been extended till the end of the year.
Q1 reflected the impact of cheaper imports. As we progress into FY26, we’ll see revenue diversification and contribution coming from vacuum, salt and bromine initiatives. EBITDA for the quarter stayed within a range of 225 crore compared to 235 crore in Q1FY25 and 244 crore in Q4 of the last year. EBITDA margin remained trend on a buy on buy basis at 27.3% compared to 27.7% in Q1 of last year. On Q and Q basis, the EBITDA margin showed a decline of 290bps reflecting a reduced spread between realization and seasonality which was partially mitigated by our focus on operating efficiency.
Raman Chopra — Chief Financial Officer and Executive Director
I will highlight here that it is by design that we are able to focus on profitability through cycles due to prudent approach to business and operation management. Our savings on raw material prices raw materials are sustainable and will continue to give benefits. PAD for the quarter decreased to 145 crore from rupees, 151 crore in the corresponding quarter of the last year and 153 crore in Q1 of the last year, thus demonstrating our ability to realize savings in overhead cost and mitigate the impact on profitability. We Due to softer realizations for the quarter we generated 191 crore in cash profit after tax.
Out of this we spent 121 crore on growth capex including bromine and vacuum salt and 12 crores on the repayment of loans. While the reduction in working capital by rupees 4 crore resulting in a net cash generation of 63 crores, our balance sheet remains strong with 1142 crores in cash and investments at the quarter end. This financial agility is the base for our strategic capex execution and operational excellence supporting significant growth headroom. Leveraging this robust position, we are proud to have paid dividend of 115 crore rupees on July 24. Uniquely in India, this payout coincided with our AGM demonstrated our unwavering commitment to immediate shareholder value.
GSL is firmly on the right path for continued financial strength and growth. With this I conclude my comments. I would now request the moderator to open the forum for questions and answers. Thank you.
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 the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nigel from LEO Capital. Please go ahead.
Nigel
Good afternoon sir. Thanks for the opportunity. What are the key sources of our cost advantage and how would Our Cost Compare vs Peers in India and globally in synthetic soda ashes and how much cheaper is natural soda ash to make?
R S Jalan
Yeah. Good afternoon Mr. Nigel. Three things you have asked. One is what are the levers of our cost optimization? Second is how do we compare with the local players and the third is how does it compare with the natural resource? Am I right in understanding? Correct. So first and foremost on the internal efficiency which I spoke about is primarily driven by the two things how effectively you use your raw material and how, if I can define this in this way that how much value out of that raw material you can generate or how do you reduce your wastages in the entire process is one of the USP we have either be it salt, be it a limestone or be it all energy and everything, our efficiencies and our utilization are the best in class.
In terms of the peer, I don’t have a number of the peer and therefore I will not be able to comment on that. Coming back to the third point of your natural soda. In natural soda if you look at in terms of the location where it is getting produced is definitely going to be cheaper. But if you compare that landed to the consuming center the gaps are going to be reduced significantly. We just compared one sometime back we compared that if a new natural soda plant is being produced and if you take all the cost, all cost of means, capital cost, depreciation and everything, I think the synthetic soda in India will be competitive to them as well.
I hope I’ve been able to answer your question.
Nigel
Yeah, got it. Thank you sir. And if I can squeeze in another question by when do you expect phase. One and two, phase two of the. New soda ash plant to be operational and how will the cost structures be in this new plant versus the existing plant?
R S Jalan
See Nigel, very rightly you said first and foremost, as you know that any new large scale plant when you set up you do face some challenges. Okay. In the past also we have faced some challenges and some small challenges are still continuing there. Hopefully we are expecting that both phase one and phase two gets commissioned in next three to four years of time. So it is going to take some time. That’s number one. Coming back to the cost. When you spoke about the cost competitiveness of course initially the interest and Depreciation cost will be on the higher side.
However, if you look at the operating cost, operating costs are definitely going to be much better than even the current location. What we have because we are using lot of new technology, if I can say so, the way we are designing the plant, definitely the cost competitiveness will be better for us in the new location.
Nigel
If you have to quantify it, sir. By how much do you think our OPEX cost in the new plant would be compared to our existing one?
R S Jalan
I don’t think Nigel, I will be able to comment on that at this point, but I can only tell you that it’s going to be definitely much better than the existing plant. And the second thing is I can only tell you the ballpark number that IRR on this new investment will be in the range of around 1817 to 18% kind of a number will be there on the new plant.
Nigel
Got it, Got it. That’s very helpful, sir. Thank you.
operator
Thank you.
operator
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is on the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Namaskar Jalanji Namaskar Ramantha Manubai and thank you for this opportunity. Firstly, sir, just to take forward the previous participant question on the new asset. I’m audible, sir.
R S Jalan
Yeah, you are audible, yeah.
Saket Kapoor
Thank you, sir. Sir, on the greenfield asset, how much have been spent as on date and what do we envisage or budget for the same for this financial year.
R S Jalan
At this point of a time, tentatively we have spent around 160 to 180 crores. Broadly, I’m just giving you the number and we are not expecting a very significant amount of expenditure during the current year balance period, maybe marginal, maybe 10, 20 crore can be there. The major spend on this will happen when the physical activity starts, maybe 2627 onwards. However, again the larger portion of that investment will be on the back end of the commissioning of the plant.
Saket Kapoor
Since you mentioned about 2029-30, we will be ramping up to the phase one and phase two. So what should be the gap between phase one and phase two commissioning? Because we have given a cumulative number now that by 2030 the 1 million ton capacity will be ready to on screen. So if you could just give the gap between.
R S Jalan
Yeah, yeah. Sake ji, I just want to give you some. Before I answer this question, let me give you one perspective what we have. First and foremost, India is still an importer of around a million tonnes the second Indian demand growth the way we are seeing the way the historical EG requires 2 and half to 3 lakh tons of extra volume every year. You can imagine the next five years you will require another million tonnes. That means the overall gap is around 2 million tonnes. And this I’m talking about only on the numbers which are the conservative.
In a way I would say that now even if I take other players growth into the account we are clearly seeing a significant amount of gap between the demand and supply. Keeping that into mind, the phase one and phase two gap would be very minimal. Have a gap of only one year first we complete that and immediately we start the process for the second distinct and we try to complete both in a gap of one one and a half year kind of a thing. I hope I’ve been able to answer your question.
Saket Kapoor
Yes sir. In the presentation which has been revamped very well and kudos to the team for elaborating all aspects. The MIP part has been mentioned and not only you but the other major players also mentioned that MIP has not yielded the desired result. So if you could just explain what was anticipated from the introduction of MIT and now with the extension and how is this MIT extension going to change or affect the margin and the import trajectory going ahead?
R S Jalan
First and foremost, as you rightly said Takeshi, we have mentioned in our presentation MIP has been implemented, has been extended but we did not got any significant advantage out of that. We are not seeing at least a significant advantage. The second thing which I said in my opening remarks, we personally believe the softness has happened in the soda ice prices may be slightly more likely to happen in next one or two quarters but we don’t see a very significant amount of drop beyond that. Keeping both these things into account, I would say that you can assume very well that overall you don’t see a very big down cycle in the soda as going forward.
Whether this MIP will in the future will get some benefit or not, we don’t know. We have also pursuing the anti dumping duty. Let’s see what happens to the anti dumping duty as well.
Saket Kapoor
Yes, I was coming to that. On the anti dumping duty part also. I think so some whatever is available in the public domain. There was some meeting that concluded sometime in the last week of July. So are the results the submissions being done by both the parties or what is the latest on the same? And then can we hear something on.
R S Jalan
That meeting has been done where all the stakeholder has been called, the authority has listened to all of them and they are taking a view on that. As you know that anti tuning duty has a process and that will take what you call some time and once the results are known we will definitely share with our shareholders.
Saket Kapoor
Right. So just to going ahead as you have very well articulated in your opening remarks. So this 300 basis point reduction which we have seen in the EBITDA margin Q1 Q that will that is another risk of some more margin compression that we are expecting going ahead. And also how do H2 shape up in terms of now the bromine and the industrial salt getting commissioned and what how well are we prepared to commercialize or sell these two new products going ahead? What is our preparation for that?
R S Jalan
Secondly, three things. One, as you rightly said second quarter and the 2526 is the numbers as I mentioned in my opening remarks. Also Q2 looks to be challenging. Maybe some price drop will be likely to happen in one or two months and second is the seasonality. So definitely Q2 number will be little challenging. How much it will be we don’t know right now because the market is very volatile. The second you said about the new product, as I said, new products are likely to be commissioned in this year 2526 at the second part of the late second part of 2526 and we are well prepared in terms of supply chain and things like that.
But these are the two projects which are new for us. We are entering into this which has a long growth story for us and we are very carefully nurturing these two projects and definitely you will see the major advantage of this coming in 2627.
Saket Kapoor
And last point sir, if I may when I joined the queue was regarding the China participation in the global soda space. Earlier sir, as you mentioned and as we have seen that China was consuming all the enhanced capacity from the new natural sodas they commissioned and there were very less material that was getting floated in the other geographies. And taking now into account the recent hearing that China is carrying a huge inventory closer to 1.8 or 1.9 million tons, what are your understanding that the threat of Chinese material now coming and putting more pressure is more the likelihood than the reversal earlier? I think so the domestic demand there was well to take care.
And lastly sir, the green energy participation from the country, our country India, how much of our total sales is currently moving towards this solar glass to the solar glass manufacturer and what kind of uptick we can expect.
R S Jalan
First and foremost China scenario. There are three things which I would like to add. One, as I mentioned the China demand growth has been phenomenal. 23 it was 10%, 24 it was 18% demand growth on such a large scale. But this year at this point of time, the demand is muted. When this will get recovered, we don’t know right now. That’s number one. And this also led a kind of a 10 million tonnes of the extra capacity large 10 million of capsity. Out of that 8, 8.5 million ton has been added in China itself, including the Inner Mongolia.
So therefore this is the one scenario which at this point of time we are of the view that the moment the Chinese demand recovery starts happening, this surplus situation of China will disappear and very significant change is not required. A very small change in the Chinese demand will kind of evaporate. Second, if you remember last year, China was a net importer. My personal belief is China can be temporarily can be kind of a high inventory and what you call and some export happening to the other part of the world. But in the longer run I don’t think this can be a kind of a big threat to the other producers.
The second point, I think you people must have heard it also. Chinese government is also somewhere kind of a structurally changing the landscape there. And this will also help us to kind of contain the third point, as I mentioned in my again opening remarks, that some of the small uneconomical soda players in the synthetic part will have a risk of closure if this situation does not reverse. So hopefully, as I mentioned in the medium terms we don’t see any big challenge because of China.
Saket Kapoor
The incremental demand from the solar. How are you seeing things stepping up? We have been working on this story that there would be good demand from the solar glass manufacturer and I think so many of them, borosil have also come up with 600 ton fresh glass making manufacturing which they are advertising to come up in the later part of this year or maybe nine months from now. So a big effect. Demand and utilization levels. We are running at the industry levels of 1995%. If you could just comment on the same.
R S Jalan
See, first and foremost, I think in India almost all the industries are working on the 90, 95% kind of a capacity. At least we are working on that. That is number one, if you’re talking about the solar glass, I think yes, all the solar glass producers are running on the full capacity. The second part which you said in terms of just give it. Let me give you the perspective. Okay. Currently around 116 gigawatt of the solar glass capacity there in India, the government has an aim to make it to 300 gigawatt by 2030. Current consumption in this 116 gigawatt is approximately around 130,000 tons of solar requirements.
You can just multiply this by three broadly. Okay, three. To that extent the demand growth will likely to happen. The second again very important is that lot of large players including like you mentioned the company, other players as well have announced and some of the capacities are coming on stream in next few months. Major benefit of this expansion you will see either in the last quarter of this year or full benefit of that will happen in 2627.
Saket Kapoor
Right. Thank you sir. I’ll join the queue for one bookkeeping question from Raman. May I ask now only or join the future?
R S Jalan
You can ask yes.
Saket Kapoor
For the other income part, do we have any one off element or is it the treasury gains? Raman. Sir, that that has attributed to the sequential improvement also by 10%. And what’s the likelihood run rate for this contribution? This now we are up to 27 crores. Closer to 27 crores.
Raman Chopra
Yeah. This is. There is no one time gain. This is a treasury income major and. On the power fuel there is an increment of around 66%. That is what will you attribute that percent from 154 crore to 162. 63. That is largely due to the price increase in one of the components. That is largely due to that. Which component. Is the Petco price which went up.
Saket Kapoor
Okay. So that is likelihood to continue to put pressure on the market as of now it is.
Raman Chopra
But you never know. There is so much of volatility how the prices will play out.
Saket Kapoor
It’s. You know we are monitoring it on. Day to day basis. So yeah, the impact was due to this price increase. On the tax front. How much have we budgeted as an advanced tax number for this quarter? June quarter?
Raman Chopra
I don’t think we have at this point of the time we have any such kind of a number which we can share with you.
Saket Kapoor
Okay. Thank you sir and all the best hope for better times and good news to flow. Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Atur from ICICI Prudential Mutual Fund. Please go ahead.
Atul
How would be the domestic pricing currently? Like I said, the current prices are almost maybe around 2% lower than of your. If you want. Okay. Okay.
operator
Thanks. Thank you. The next question is from the line of Aditya Ketan from Smith’s Institutional Equities. Please go ahead.
Aditya Khetan
Yeah. Thank you sir. For the Opportunity. Sir, you mentioned to an earlier participant that China demand growth was 18 to 20% in the last two to three years. What we have seen like in terms of the construction sector was actually struggling in China. So largely the flat glass and all these segments is for the construction segment only. So how come like this end user.
Aditya Khetan
Segment have performed well when the construction segment has been weak? If you can quantify with some data like what has actually changed in China and now what has changed?
R S Jalan
Yeah, very light question. First and foremost as I mentioned in in 2023 the demand growth was 10%. In 2024 the demand growth was 18% and this was primarily led by the solar glass investments. There was a large capacity expansion has happened in the solar glass and along with the lithium. So these are the two sectors which had kind of a has done this kind of a growth.
Aditya Khetan
Got it. Sir, if you can please highlight like what is the over capacity in the industry today compared to demand and how we look like we knew that some capacities have been built up in China. So when will this capacity likely to operate at peak? Like so will it take five to six years down the line or will the demand growth will be so good enough so it can cover in a one to two year time stream only? Any outlook sir, if you can give.
Mehta Vora
I can give you my thoughts on this. First and foremost is that like I said, the overall capacity which has been built mainly in China around 10 million tons. If you look at overall globally approximately around 2 and a half to 3 million tons are required because approximately around 80 million is the total demand globally if you take 3% you’re talking about 2.5 billion tons of approximately extra requirement every year. And the second point which I want to highlight is last year in spite of a major portion of this expansion which had been commissioned in China, still they were a net importer.
But the moment this 2, 3% of the demand growth happens in the China probably I think this balancing out will happen. This is what my broader understanding.
Aditya Khetan
Okay, in terms of a cycle like of a soda cycle we knew like the peak was somewhere around so 2023 and thereafter the prices and spreads have been continually declining. What we have seen like most of the commodities like after a two year time frame of decline there has been a bottom which has been made. So similar is the case with sodash and how you see like these numbers to be stabilizing and are we at the bottom of the cycle today?
R S Jalan
See two things first and foremost if you look at the sodas and particularly our number you will see that the margins are not a very significant ups and down. If I give you the number of 45 years you will find that on an average the margins or EBITDA margins are in the range bound. Okay. And 30% if I take few years I’ll see that around 30% of the average EBITDA margins we have been able to achieve. So therefore there is not too much. Of course 23 was one of the exceptional year if I can say so don’t compare that as a kind of a normal case.
If you look at two years before that 20, 23, you will see that number was one of the outlier number. The second question which you spoke about in terms of the bottom out. See I already said in my opening comment also that we personally believe maybe few quarters may be challenging but because of the many of the soda ash producers globally are not being able to cover their what you call cash cost. So definitely this indicates that somewhere we are closer to the bottom of the cyc.
Aditya Khetan
Just one last question sir. If you can share the incremental EBITDA numbers which we will generate from bromine phase one, phase two and from the. Salt business on the base of it. How much incremental EBITDA we can make from this business.
R S Jalan
I think on this number I would like to be give you the number. Maybe let the plants be operational. You see what happens now we are going in the journey first time. Of course we are. We have the plan which we made was a kind of a good number. Good. What you call EBITDA number will be there. However, let the plant be operational. Maybe we have to look at all those things and probably I will be able to give you better number maybe once in the. Maybe in the third or fourth quarter. I think that would be good.
Aditya Khetan
Got it. Thank you sir. That’s it.
operator
Thank you. The next question is from the line of from Kotak Securities. Please go ahead.
Unidentified Participant
Thank you sir. My question is can you share the volume growth for Sodash during this quarter and what is the outlook for the rest of the financial year? 26.
R S Jalan
Really first and foremost I mentioned that demand growth in India last year was also 5% and this year likely to be around 5 to 6% so far as we are concerned almost I would say that some small increase in the volume there in this quarter as compared to the earlier quarters. And as you know that we have a capacity limitation. So therefore in the coming quarter you can’t see a kind of a significant volume growth in the gsl.
Unidentified Participant
Right sir. And with solar glass, lithium carbonate and sodium Bicarb as you have cited as emerging demand drivers. So are you seeing any meaningful uptake yet in these segments?
R S Jalan
You see, basically we are very optimistic. Let me tell you, we are very optimistic on the sodas journey going forward. Like I mentioned, even if you look at the per capita consumption of the sodas in India, Visa is the globe. If you look at the percentage of uses in India, the glass uses percentage are very insignificant or very small as compared to the global space. The way the organization is happening, the way that what you call cleanness are being pursued and the way the GDP growth of India is happening, we are very bullish that sodas consumption per capita will also go up and led by your green energy, be it green energy in terms of the solar, be it some lithium carbonate, all those things.
So we are very bullish and I mentioned already that this will lead and the journey of our greenfield project, we will be able to capture these benefits significantly.
Unidentified Participant
Right? Sir, thank you very much.
operator
Thank you. The next question is from the line of Jatindamania from Swan Investments. Please go ahead.
Jatindamania
Thank you for the opportunity. So, just wanted to understand our revenue decline that we have reported year on year. So what percentage of this decline can be attributed to a fall in realization? Because you indicated in the last quarter also that in Q1 the realization was down as compared to Q4 and our current realization is also lower by 2 to 3%. So in Q1 I mean the 4.5% decline in the revenue. Could you. What sorts of decline in the realization we have seen in the sodas?
R S Jalan
It’s primarily, primarily because of the price only.
Jatindamania
Okay, so that is the volumes were flat year on year.
R S Jalan
Yeah, volume is slightly up as I mentioned, slightly up. If you’re talking about year on year basis or slightly down, maybe very small down, but on a quarter, on quarter basis it is yes, slightly up. However, mainly I would say that this drop in the volume is very small. The major drop which you are seeing in the revenue is primarily because of your realization.
Jatindamania
Now since we are already operating at. The rated capacity and realizes likely to. Remain muted, so definitely we won’t see any significant jump in the soda’s performance. But what sorts of revenue are we expecting from a bromine and vacuum salt which we started on the pilot project for FY26 or let me put it the other way, at the current realization, what sorts of revenue one can expect from a bromine and the vacuum salt which is likely to come in second half of FY26.
R S Jalan
Jatine, as I mentioned to you that these Projects are likely to be in the last quarter of this year so you won’t see any very significant amount of because once the plants start operating it will take some time to kind of stabilization, quality getting settled with the customers all those things will take some time I don’t think you will see a very significant amount of marginal increase could be there in the last quarter however not a very significant improvement but yes, the benefit of these, both these projects you will see in the. In the 26, 27 but sir, can.
Jatindamania
We quantify at current realization what could.
R S Jalan
Be the incremental revenue we can get. It from both this project. Very difficult at this point of time I’ll come back to you maybe in the second quarter we’ll come back with a thumbs.
Jatindamania
Up that’s all from my side thank you and all the best.
operator
Thank you Participants who wish to ask a question may press star and one at this time I repeat to ask a question you may press star and one now the next question is on the line of Renuka from FWC please go ahead.
Jatindamania
Hello sir, Good afternoon Thank you for the opportunity so to a previous participant you have mentioned an IRR of 17 to 18% in the new Greenfield Sodash facility so my question is can you please highlight based on like what internal assumptions on margins are you arriving at this number and also how much of the capex are you envisioning that will be funded by debt?
R S Jalan
Two things as you said the first and foremost the assumption of the of the projects See what we are always seeing the solace in a longer term play so I cannot go on the basis of what is the current margin we have to always look at the number on a slightly longer term first but we are always be very conservative when we assume our projections and therefore these numbers which we have said to you are conservative but looking at the longer term view on that the second point which you spoke about what was the second point? I’m sorry I missed that second point.
Jatindamania
How much of the capex are you envisioning will be funded by debt?
R S Jalan
Yeah see today as you know that our balance is a very strong balance sheet we have almost more than thousand crores of kind of it as you can in our head and we are almost generating a significant amount of cash we personally believe even after this both these phases have been completed still our debt equity ratio will be less than I would say that one is to 0.5, 0.6 kind of a scenario so we will be very well and maybe probably around 2 to 3,000 crore rupees could be the number. Probably we will be going for a one time jet which can gradually repaid.
And maybe once after the project is being completed, maybe another two years we will be again coming back to the same situation of no debt situation.
Jatindamania
Okay, and just another question. In your opening remarks you have mentioned that in this calendar year 1 million ton has already been added globally and another is expected. So can you just highlight as to where RBG is coming online?
R S Jalan
Basically it will be all led by the China last year. Also if you look at you will see that all this volume which has come in. I’ll just give you some numbers. It is all one second. If you look at 10 million tonnes it is almost out of that extreme. Except I would say that 1.5 million ton around 8.8 million tonnes has been added in China in last two years. Next, if you look at this 1.1 million ton, it is primarily China 1.1 million ton. And second is your China means one unit has put 1.1 million ton and rest of the company small company, they.9 million ton.
So 2 million ton and 1 million times got closed led by one UK UK player and one is a Poland player. So 1 million has got closed. So net, net 1 million has been added during this terrify.
Jatindamania
Okay sir, that’s it from my side. Thank you so much.
R S Jalan
Thank you.
operator
Thank you ladies and gentlemen, as there are no further questions from the participants I now hand the conference over to the management for closing comments.
R S Jalan
Thank you very much. As I always been mentioning that ESDL is doing what is in their control, Operational efficiencies, cost optimization and building the company for the future. Capturing the future growth of the company. And we’ll continue to do that. And our very clear target is how do we service or how do we create a value for our shareholders. We thank you for all the support which you people have and have a trust on us and we’ll keep honor of those trust and your faith on us. Thank you.
operator
Thank you on behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us and you may now disconnect your lines.