J.G.Chemicals Limited (NSE: JGCHEM) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Dhiral Shah — Senior Research Analyst Phillip Capital India Pvt. Ltd
Anirudh Jhunjhunwala — Managing Director and CEO
Anuj Jhunjhunwala — CFO
Analysts:
Mohit Chugh — Analyst
Kaushal Sharma — Analyst
Ashmita — Analyst
Deep Gandhi — Analyst
Darshil Jhaveri — Analyst
Dhruvin Kadakia — Analyst
Jigna Kaliwada — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to JG Chemical Q3 and 9 months FY26 conference call hosted by Philip Capital Private Client Group. 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 a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dheeraja of Philip Capital PCG. Thank you. And over to you Mr.
Diral.
Dhiral Shah — Senior Research Analyst Phillip Capital India Pvt. Ltd
Thank you Rudra. Good evening everyone. On behalf of Philip Capital Private chain Group I welcome all you to Q3 and 9 month FY26 earning conference call of JG Chemical Limited before we begin I would like to mention a short cautionary statement. Some of the statements made in today’s earning con call may be forward looking in nature. Such forward looking statements are subject to risk and uncertainty which could cause actual results to differ from those anticipated. Such statements are based on management beliefs as well as the assumptions and the information currently available to the management. Participants are cautioned not to place any undue reliance on these forward looking statements in making any investment decision.
The purpose of today’s earning conference call is for you to educate and bring awareness about the company’s fundamental business in financial quarter. Under review today from the management team we have Mr. Aniruddh Junjunwala, the managing director and the CEO of the company. Mr. Anujinwala the whole time director and CFO of the company and Mr. Amit Agarwal the General Manager Accounts and Finance. I now hand over the conference to Mr. Anil sir for his opening remark and then we will open the floor for question and answer. Over to you Aniruddhul Sir.
Anirudh Jhunjhunwala — Managing Director and CEO
Thank you Diral. Good afternoon everybody and a very warm welcome to JG Chemicals earning call for the third quarter. I would like to thank all of you for taking the time today to join us. I will begin with a brief overview of the company followed by some key operational and strategic highlights for the quarter and for the nine month period. As you are aware JD Chemicals Limited is India’s largest manufacturer of zinc oxide and the country’s leading zinc recycling company. We cater to a diverse range of end user industries. Which include rubber, tire, ceramics, paints, pharmaceuticals and cosmetics, specialty chemicals and many more industries.
We serve over 200 domestic and more than 50 global customers including all leading Indian tire manufacturers and 9 out of the top 10 global tire companies. Our manufacturing network comprises today of plants in West Bengal and Andhra Pradesh with a combined capacity of nearly 70,000 metric tons per annum. We offer 80 plus specialized grades of zinc oxide as there is no one size fits all approach when it comes to zinc oxide and each customer have their own specifications. Our NIDU Beta facility remains a key competitive advantage for us and being the only IATF certified plant globally and holding also the WHO GMP certification along with other Pharmacopeia certifications.
Today sustainability and recycling remain core to our business model. We focus on maximizing the use of recycled zinc which reduces costs, reduces the energy consumption, the carbon emission and and also the environmental impact. Our circular economy led approach supports resource efficiency and also aligns well with the environmental needs and also reinforces our long term ESG and growth strategy. As part of a sustainability drive, we have recently commissioned a new solar power energy generation project at Nidopeta and this helps us increase our renewable energy content. This was phase one. Further investment in renewable energy will be done to take our share of renewable power even higher.
Apart from this, we also continue to explore and work on various sustainability initiatives and the company is fully committed to its sustainability goals. Now let us look at the capacity expansion and the new project initiatives that the company is taking right now. The greenfield project which was already announced at the H Gujarat continues to progress in line with our planned timelines. This state of the art facility will significantly strengthen our presence in Western India and also enable us to be closer to our key customers in that region. Work at the site is advancing well with civil construction currently underway and machinery installation is expected to commence over the next couple of months.
We expect to commission this phase one of the zinc oxide production in the first half of FY27 itself. Once operational and stabilized, this facility will play a pivotal role in boosting our overall capacity and supporting our long term growth strategy. In addition to this Dahej project, we have also undertaken a brownfield expansion at an IDUPETA facility to support future demand. Our existing capacity remains adequate for near term requirements and these expansions will further strengthen our ability to cater to the customers in future as part of a focus on new projects and initiatives. I’m also pleased to inform you that during the quarter we also made very significant and meaningful progress on the Recycled Rubber project.
Pilot scale trials for a recycled rubber project have commenced and the initial results are very encouraging. Further details on this will be made available at the opportune time. This would be a specialized product and increase the content per tire. From the House of jg, let me now dwell upon the and give you a perspective on the industry scenario. As you are already aware, tire and rubber forms a significant demand contributor as far as we are concerned. Demand momentum in the tire industry remained healthy during the last quarter. The tire industry has benefited from the GST led reforms.
The reduction in GSP rates from September 25 has improved affordability and overall customer sentiments across both OEM and the replacement market. Good and widespread monsoons have also revived the rural economy supporting the two wheeler and the agriculture tire demand across the Tier two Tier three markets. The automotive industry continues to witness strong momentum across vehicle segments supported by infrastructure development, improving freight movement, healthy consumer demand and favorable financing conditions in international market. The demand for radial commercial vehicles, off highway, tire and passenger vehicle segments remains strong. With India now emerging as a creditable global sourcing base for these category of tires.
India is well positioned now to emerge as a leading automobile hub which is expected to act as a key growth driver to the auto ancillary sector supported by both domestic as well as rising export demand. The demand in the last quarter has been robust and the same momentum is being experienced in the current quarter. Also, our customers today are operating on good capacity utilization. This has therefore led to leading tire manufacturers in India announcing significant CAPEX plan of over 12,000 crores over the next two to three years which provides us with a strong visibility on long term volume growth.
When TR invests in growth and capacity expansion, your company JG Chemicals is a direct beneficiary. The Union Budget 2026 presented by the Honorable Finance Minister further enforces India’s commitment to manufacturing led growth. The continued focus on capital expenditure with infrastructure allocation exceeding over 12 lakh crores is expected to improve logistics efficiency and support demand momentum across automobile and other sectors. Recently, with the trade agreements with EU and the U.S. we are hopeful that the export opportunities for some of our customers would also grow significantly which had become subdued over the last few months and thus we feel that these customers would now again come back to higher level of production.
So apart from rubber and tire, we are also seeing encouraging traction in the non rubber segment such as pharmaceutical, ceramics, specialty chemicals and agriculture. Our focus on product customization and customer specific solutions continue to strengthen our partnerships with them and improve our penetration in these areas over the long term. We remain committed to increasing the contribution of non rubber allocation to drive margin expansion and also portfolio diversification. Overall, as a company we remain optimistic about the long term growth prospects of the zinc chemical business and our ability to gain more market share driven by strong customer relationships, product innovation, our focus on sustainability and capacity expansion.
With this brief overview I would now request our CFO Mr. Anu Jhunjanwala to share with you financial highlights for the quarter and the nine month period. Over to you now Anand.
Anuj Jhunjhunwala — CFO
Thank you. Good afternoon once again to everyone on the call. I will now take you through our financial performance for the third quarter and the nine month ended of the current fiscal followed by some operational and business updates. I am pleased to share that in this quarter your company witnessed its highest ever quarterly sales EBITDA and pat. The improved performance was driven by strong demand across most customer segments. For Q3 FY26 our consolidated revenue from operations stood at 249 crores registering a year on year growth of almost 19%. This strong growth during the quarter was driven by higher realization, improved capacity utilization and increased mix of specialized orders.
These factors collectively enhance operating leverage and supported a sequential improvement in margins. In terms of key figures, the EBITDA for the quarter was 26 crores, the PAT was approximately 18 crores. Overall, the quarter reflects improved operational efficiency and stronger profitability supported by disciplined execution and a favorable product mix. On a 9 month basis. The revenue from operations was 687 crores, EBITDA was about 71 crores and PAT was at 50 crores. As mentioned by Mr. Anur, the GST reductions implemented in September have led to a meaningful improvement in demand across the automobile industry which has obviously had a direct impact on the tire segment as well.
This momentum has continued in the current quarter supported by improving customer sentiment and industry activity. We remain optimistic that these trends will sustain in the upcoming fiscal, providing strong growth visibility for the Thai industry and related value chains. In addition to this, various FTA which have been signed between India and the west also bode well for general manufacturing industry in India. In addition to the tire industry investments which was mentioned earlier, we also seen various automobile and its ancillary companies announcing new CAPEX plans in the immediate future. All this bodes well for the general demand in India and I feel our country is fully geared up for attracting new investments from both Indian and foreign companies going forward.
And to meet this demand, JGC is also expanding its capacities to ensure that it has enough capacities available to cater to the demand which will follow. With this we can now open the floor for question and Answer sessions.
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. Our first question comes from the line of Mohit Chuk from Shubhlab Research. Please go ahead.
Mohit Chugh
Hi sir, Hope I am audible.
operator
Yes sir, you are. Please go ahead sir.
Mohit Chugh
My first question is I wanted to understand more about pricing scenario given OEMs have commented about offsetting the input cost pressure with volume growth and operating leverage. Are we noticing some free hand in pricing to increase our margins?
Anirudh Jhunjhunwala
Could you repeat your question please? Once again the first part of the. Question
Mohit Chugh
sir, I wanted to understand more about pricing scenario given the auto OEMs have commented about offsetting the input cost pressure with volumes growth and operating leverage. So we are noticing some freehand in pricing to increase our margins.
Anirudh Jhunjhunwala
As a company we believe in responsible pricing and whether the demand is muted or is in a buoyant stage, the company has very long standing relationship with our customers wherein any cost pressure on the company is passed on and is absorbed by our customers and in indirect they obviously try to pass it on to their OEMs. But having said that, I think our relationship is quite mature that where each one plays their part and we do not try to take any unfair advantage of the customer. Any cost increase on the company side, definitely we try to pass it on to the customers and because we operate in a premium segment, more often than not it is absorbed by our customers and it is appreciated.
Similarly, if there is any possibility of cost savings, et cetera from our side, we also continuously try to pass it on to the customer because if the customer benefits, ultimately we benefit in the long run in terms of value and relationship.
Mohit Chugh
Very understanding sir. So my second question is on the inventory side like I have been noticing some price increase in zinc. So if you can throw some light on how will our margin look in quarter four with increasing prices.
Anirudh Jhunjhunwala
As we have maintained before, also as a company generally we are agnostic to zinc prices. Whether zinc prices go up or go down does not really affect our margin profile on the core business because if you understand how the pricing works, basically our product is priced on the LME which is the London Metal Exchange where zinc is coated and also the raw material that we buy is also based on the same London Metal Exchange. So in effect it’s a pass on model wherein supposing in the month of January we have bought our raw materials basis, the LME of January.
In February we sell our zinc oxide basis, the price of zinc on the LME in the month of January. So it’s an M minus one model. So technically there is no difference in or lag in the pricing mechanism. However, when obviously zinc, when you’re seeing a favorable impact on zinc prices, then we also carry a core inventory on which obviously gains can be accrued. So in the last quarter we have seen in the last few months zinc prices going up. So obviously those gains should accrue in the current quarter on the inventory which the company carries.
But generally speaking it doesn’t matter whether zinc is 3000, 3500 or 2500, doesn’t matter that way.
Mohit Chugh
Okay, so that’s very helpful. And so my third question is on rubber plant. If you can help me explain the supply chain of user. Basically what is the procurement channel of use choice? If you can help throw some light on it.
Anirudh Jhunjhunwala
So as far as this business is concerned, the procurement of used tyres would be both domestic and international. For international it’s a controlled mechanism wherein you need to take a license and once you have the license you can import. In the meantime you are free to procure domestically. Domestically this comes to traders and dealers who are basically scrap collectors, scrap tire collectors. In fact, going forward there is also a model wherein as we scale up and as we set up the industrial scale, we will also look at tie ups with large tire companies wherein their rejects and their replacements would come out flow directly to us.
So that is also a model. But yes, so it is a combination of three models directly from the tire companies, from the domestic market and from the international market.
Mohit Chugh
Okay sir, and a last question. If I can squeeze in, if you can provide a revenue mix between tyre and non tire in quarter three.
Anuj Jhunjhunwala
So the rough revenue mix as we guided earlier, it was earlier about 90% rubber and 10% non rubber which became 85% rubber and 15% non rubber. I would say we are in the 83 to 85% range for rubber and the balance 15 to 17% would be non rubber. And you know, as we mentioned earlier that as we go forward the mix of rubber would also reduce not because of lesser growth in rubber but obviously rubber will continue to have good growth but increased, you know, more products and more application areas which we are focusing on.
Mohit Chugh
Okay sir, thank you sir, these were my questions agrigent vertically.
operator
Thank you. Our next question comes from the line Of Kaushal Sharma from Equinox Capital Venture Private limited. Please go ahead.
Kaushal Sharma
Hello. Hi sir, very good evening. Am I audible? Yes, yes. As you said that sir, there is no demand challenge going on ahead in JINP and that is being commissioned in H1 Financial 27 as expected. So what kind of revenue potential are we expecting from this and how are we going to ramp up once the capacity online? And sir, my second question. You know your recycle river project that we are investing in, Recycled rubber project. So what kind of capex are we investing in this and the capacity we are putting.
Anuj Jhunjhunwala
So I’ll take your first question first on the, on the revenue potential from the new projects that we are doing. So the DAHED project would have a capex of total 100 crores and it has a revenue potential of about 900 crores plus over a couple of phases. So in first phase we’ll obviously not. Be putting up the entire capex. It will be about 45, 50 crores and the revenue potential should be in the range of about 400 odd crores for that. And on the rubber project I think it’s still early days. We would not like to give any guidance on the revenue potential and the capex. We are working on it and as we mentioned it’s a trial plant, it’s a pilot plant right now. Once we move ahead with that we’ll. Share all the requisite details with the market in due course.
Kaushal Sharma
And sir, we are also changing our product mix right now. Recycling rubber segment we are moving. So what kind of revenue mix are we expecting going ahead like one to two years in the revenue potential segment? Could you please explain the EBITDA margin different?
Anuj Jhunjhunwala
So your voice is a little muffled but if I.
operator
Your voice is breaking.
Kaushal Sharma
Yeah. Now is it? Hello.
Anuj Jhunjhunwala
So I’ve caught the question that he asked. So just to clarify, just to answer. To his point the revenue mix between rubber and non rubber would change to about 70, 30 I think in the next two to three years time. That’s what our internal target is.
Kaushal Sharma
And from the EBITDA margin could you guide like in the segmental EBITDA margin? How.
Anuj Jhunjhunwala
So? As we mentioned earlier the core EBITDA. Margin of the company is around 10 between 10.5% to 11%. That’s the basic EBITDA margin that we aspire to make. And as we you know increase the, you know, the contribution of specialized products with operating leverage etc. This would increase to about 13 to 14% minimum in the next two to three years time.
Kaushal Sharma
Okay sir, got it. Thank you very much.
operator
Thank you. Our next question comes from the line of Ashmita from Electrum Capital. Please go ahead.
Ashmita
Hello. Thank you for the opportunity sir. Just wanted to understand that the gross margins have declined on a y o y basis. So could you elaborate what were the key drivers behind this compression and going forward what gross margin range should we look at?
Anuj Jhunjhunwala
As we mentioned that, you know in our business there is a lag effect of materials flowing in, there’s imports which happen sometimes. There could be a couple of months lag between the, you know, the date at which we’ve contracted with the supplier and the time at which the material is actually consumed. There could be certain, you know, there could be certain, you know, time differences. There could be three to four month difference between the time of the contract and the time of actual consumption in the factory. So that’s why we’ve always guided that rather than looking at the gross margin number on a standalone basis it’s always better to look at a lower number of, you know, on a more operational efficiency number of the EBITDA or the PBT because that gives a more, you know, a holistic view of the performance of the company for the current, for the particular period under consideration.
So if you see the nine month. Number for last fiscal and current fiscal. EBITDA margin is more or less in. The same range barring I think 70, 80 basis point difference because of a lower EBITDA in the first couple of quarters. So I think the right way to. Look at our business is not just. On the gross margin but on the EBITDA margin segment because a lot of other factors also come into play in terms of delays in usage of the material which was contracted earlier.
Ashmita
Sure sir. Second question would be could you just share the planned CAPEX for the Brown Sea expansion and Naidupita and the incremental capacity addition. I think I missed the last participants question. I think related to this.
Anuj Jhunjhunwala
The incremental CAPEX would be under 5 crores because a lot of the common utilities infrastructure is already in place in Hyderupeta and approximately the capacity expansion would be for about four to five thousand tonnes. Approximately.
Ashmita
Okay. And lastly would be, could you please provide the details on the volume growth for the quarter and nine months for Zyncoin.
Anuj Jhunjhunwala
So as a company policy due to confidentiality reasons we do not disclose exact volume numbers but I’m happy to say that we have registered double digit volume growth in a zinc oxide business in the current period.
Ashmita
Sure sir, thank you. That would be from the side. Thank you. So Much.
operator
Thank you. Participants who wish to ask a question may press star and one on the Touchstone telephone. Our next question comes from the line of Deep Gandhi from I thought Portfolio Management Services. Please go ahead.
Deep Gandhi
Yeah, hi sir. Firstly I think you highlighted that there were some kind of inventory gains due to single price increase. So can you quantify the amount of inventory gain in Q3?
Anirudh Jhunjhunwala
As I mentioned that the zinc prices rose in Q3, so the inventory gains for that weren’t really much accrued in Q3. They would rather flow in bit by. Bit in Q4, I would imagine.
Deep Gandhi
Sure. Just again continuing on this question and talking more about the balance sheets. I mean historically if I see our cash flow conversion has been quite poor because I think our main raw material is zinc whose prices keeps are quite volatile. So I mean in this environment when the zinc prices have increased quite significantly. So going ahead, do you think you’ll have to increase the quantum of debt in order to manage the working capital?
Anirudh Jhunjhunwala
So currently if you see a balance. Sheet, we have over 150 crores of cash available cash and cash equivalents in the company. Further, if you see the cash flow generated from operations in this particular nine month period is fairly healthy. So obviously ours is a business which. Requires about 100 days of working capital. So if we increase our Turnover by say 200 crores, that means we need to have about 60, 65 crores of incremental working capital. But if we are doing a turnover of say 1000 crores and with an 11% EBITDA margin, we are more than the cash flow that is generated from the business is more than sufficient to finance any incremental working capital requirements. So there’s absolutely no question of taking on any debt because the company anyways has surplus cash. And the current cash flows and the future cash flows that we plan to generate should more than sufficiently take care of the working capital financing that is.
Required.
Deep Gandhi
Coming on to the new plant. Can you first highlight what utilization are we currently operating at? And then maybe I’ll ask my other question.
Anirudh Jhunjhunwala
Currently our utilization would be in the. Late 70s of the achievable capacity. And we’ve always mentioned that, you know, our target is to be in the 80, 85% range. 85% to 90 max is what we like to do. And that is why as a matter of, you know, our prudent strategy, we always believe that our capacity expansion and our projects should get commissioned before our customers start commencing their new projects. So we believe that in this current calendar year 2026, we will commission the Dahed plant. We will also increase the capacity in nairupeta. These put together would add a reasonable amount of capacity which would cater to the incremental demand from the tire companies which will start trickling in in large numbers from 2027, 2028 onwards.
Deep Gandhi
Sure. And when you mention 80, 85, 90%, that is basically achievable capacity, not the nameplate, right?
Anuj Jhunjhunwala
Yeah, absolutely.
Anirudh Jhunjhunwala
We are most happy at 80, 85% achievable capacity utilization. That that’s for a chemical plant that is at best one should imagine for efficient running of the plant.
Deep Gandhi
So what will be the difference between. The name plate and achievable capacity? I mean is there a 15, 20% gap or how. What is the range of that?
Anirudh Jhunjhunwala
We handle complex scraps. So this is zinc scrap that we are increasingly using more and more of scraps instead of virgin and scraps come in different qualities etc. So the chemistry also changes. So I mean 15% is a fair number. 15 to 20% of the nameplate that has to be struck off when it comes to running the plant efficiently. Additionally, again, please watch out for efficiency. That is also very important because you might go up to 90, 95% but then you lose out on efficiency. We have almost, we are making more than 80 grades. So all this thing combined, I mean we are most happy if the plant runs between 80 and 85.
Deep Gandhi
Sure. And so coming on to the new plant, I mean we are quite near to commissioning now. So you might have visibility in terms of, you know, how the scale up will happen for the first phase. So if you can, you know, broadly guide say in one year, two or how long do you think it will take for us to reach full utilization for at least the first phase of the capex? And when you say it will come in H1 of FY27, will it be said towards the end of Q1, towards the end of Q2? Any specific timelines you can share?
Anuj Jhunjhunwala
I would say the commencement should be in Q2. That’s our internal target. And in terms of full utilization, I. Would say about two, two and a. Half days should be the base case scenario for, you know, for reasonable utilization. And then we start the expansion for phase two and some of the utilities, etc, common infrastructure which is already being planned. Keeping in mind phase one and phase two.
Deep Gandhi
Sir, and last question from my side, I mean I think in the budget there was also some announcement of removal of duty on import of zinc oxide. So is that even relevant for us and do you think that will benefit our business also or Are there some provisions which do not allow us to take that benefit?
Anirudh Jhunjhunwala
There has been no removal of duty on zinc oxide. There was a removal of duty on zinc scrap, But that does not really impact us because the item that we manufacture is zinc, from which we manufacture is zinc draws. We are working with the government. There should have been removal of duty also on zinc dross because zinc dross is also a form of zinc scrap. So I believe duty should be removed. When the honorable finance minister has announced that zinc scrap should no longer attract duty import, it should automatically be extended to zinc dross also.
We are working with the government to ensure that this is done as. And once this is done, obviously this will be beneficial to the company because our raw material cost goes down. So it will definitely be a good thing. It should have been done in the first place. It has been a slip. And now, you know, sometimes it takes a little longer to get things rectified than one would imagine.
Deep Gandhi
Awesome. That is helpful. Thank you.
operator
Thank you. My next question comes from the line of Tarshil Javeri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Good evening, sir. Thank you so much for taking my question, sir. Thank you. Firstly, congratulations on a great set of results. So I’m just a bit new to the company, so, you know, pardon me for some naive questions, sir. So, just wanted to know, in terms of, like, our performance in Q3, we’ve, you know, achieved like, you know, I think, the highest revenue that we’ve ever done. But then why have we not been able to, you know, recreate the EBITDA that we’ve, you know, usually had in the past? So just wanted to, you know, be able to link that up to, like, we should get benefits of operating leverage.
Right. So how do we reconcile that, sir?
Anuj Jhunjhunwala
So, you see, as you mentioned, you know, there is a lag effect on inventories which keep flowing in. There’s domestic material which is purchased. There’s imports also. So all this, you know, causes some impact on the exact translation of increase in prices, increase in, you know, volumes, etcetera, to the bottom line. I think we expect that the, you know, the margin accretion which you’re talking about should accrue in Q4.
Darshil Jhaveri
Okay, okay, fair enough. Fair enough, sir. So I just wanted to know, sir, in terms of FY27, sir, you know, our plant is nearing full utilization and we’ll be commissioning another plant. So any kind of revenue guidance that, you know, we can have for FY27. Sir.
Anuj Jhunjhunwala
We mentioned that our internal targets are that every three to four Years max, we want to double our revenues. So last year we closed with about 857 crores of top line. And I think this year our base nine month revenue is close to 700 crores. So I think we should be closer. You know, I mean if the same run rate continues, we’ll be definitely over 900, 950 crores of revenue in this particular financial year. And next year also we should be able to increase by a similar number given the growth plan that we have and the new products launches that we have in the pipeline.
Darshil Jhaveri
Okay, okay, fair enough. Sir, I so just wanted to know like when we are saying that, you know, we want to increase our ebitda, you know, going forward, so, so the new plant will be catering to more value added products. That’s one of the bigger drivers or what would be, you know, the top two drivers of, you know, EBITDA margin, sir.
Anuj Jhunjhunwala
So it is obviously the new plant. Is, you know, in Gujarat. It has a lot of, you know, specialty chemical companies and a lot of our special specialty customers are located in and around the western region. So the new plant would definitely cater to them along with the tire industry and the ceramic industry which is also in close proximity to the ACE plant.
Darshil Jhaveri
Okay, okay, okay, fair enough. So yeah, that’s it from my side. So thank you so much all the others.
operator
Thank you. Our next question comes from the line of Dhruvin Kadakia from SKP Securities. Please go ahead.
Dhruvin Kadakia
Thank you for the opportunity, sir. Actually most of my questions have been answered. Just one question that remains is for this year, in terms of realization per tons for zinc oxide as well as zinc sulfate, what kind of growth are we seeing and what kind of growth in realization do we expect in the coming years going forward for them?
Anuj Jhunjhunwala
You see, the realization per tonne of zinc oxide is directly related to the prices of zinc on the lme. And if you see on a nine month basis there has not been much change in the price of zinc on the LME.
If you see the April to December average for 24 and 25, the LME averages are more or less the same. So the average selling price per tonne is more or less the same for zinc oxide, zinc sulphate prices have increased slightly because of increase in the prices of the key raw material which is zinc ash and sulfuric acid. In the last couple of last three to four months these costs have increased. So obviously these have then been passed on to the customer and prices, the. Realization per ton of zinc sulfate has. Increased slightly over a nine month period. But I Don’t have the exact number with me offhand. I can share it with you offline on zig selfie.
Dhruvin Kadakia
Awesome. That’ll be all. Thank you so much.
operator
Thank you. Our next question comes from the line of Jigna Kaliwada from Coherent Wealth. Please go ahead.
Jigna Kaliwada
Hello.
Anuj Jhunjhunwala
Yes.
Jigna Kaliwada
Yeah, I had a couple of questions. So the first one is that you had mentioned that you are looking out for some inorganic acquisition. Then you are going to announce relating to that in the coming few months. I just wanted to know what is the status of that. And the second question I just wanted to know that what is the voice is.
Anuj Jhunjhunwala
The voice is not clear at all.
operator
Ma’. Am. Can you repeat your question? Sorry to interrupt you ma’, am, but your voice is not clear at all. Can you move to a different environment and ask your question?
Anuj Jhunjhunwala
We are not able to hear her clearly. So perhaps we proceed with the next. Question as we joined. The fact that Q and she has better network. Is that possible?
operator
Yes, ma’. Am. Yes sir, it works. Can you please rejoin the queue?
Jigna Kaliwada
Yeah.
operator
All right. All right. Our next question comes from the line of Dheerul Shah from Philip Capital. Please go ahead. Yeah.
Dhiral Shah
Good evening, sir. Thanks for the opportunity. So on the yield that we have seen on the zinc sulfate side. On. A yoy basis on the zinc sulphate side, our growth is about 3 to 4%. This is particularly for the Q3.
Anirudh Jhunjhunwala
I’m talking about nine month basis.
Dhiral Shah
And in the Q3, sir, Q3 would be similar.
Anirudh Jhunjhunwala
I mean not much different, maybe a percentage higher than low. I don’t have the exact number offhand ready but it will be similar.
Dhiral Shah
The reason why we are not able to grow double digit on a low base.
Anirudh Jhunjhunwala
See while the base was low. But we must also understand that prior year the zinc sulphate market was not good. And the last financial was a better year. And the company had just started that time so we could take advantage of that current year the business has not grown as we would have expected on the volumes is because with the zinc prices going high, the pharma community is always a little more sensitive to the zinc prices. And because of sulfuric acid and zinc both going up, there is obviously a little slowness in demand. Basically this demand has to come, but it gets pushed.
So people tend to push away the use of micronutrients like zinc sulfate etc. They try to push it that look we instead of putting it now, we may put it after two to three months. So as and when this comes it will be a effect of a pent up demand Coming in. But for the time being we noticed that there was a slight, you know, slowness in the offtake.
Dhiral Shah
Okay. Okay. And so whatever expansion that we are doing on the Naidu Beta side of let’s say 5,000 tons. So this is on the zinc oxide side or zinc sulfate side.
Anirudh Jhunjhunwala
Currently it’s only planned for zinc oxide.
Dhiral Shah
Okay, so what is the utilization of zinc? Sulfur is on date, sir. Maybe nine month basis.
Anirudh Jhunjhunwala
Currently we must be utilized about 60%.
Dhiral Shah
Okay. And sir, you also mentioned that we are investing on the solar power, you know, to increase our renewable, you know, portion to the overall power cost. So what kind of saving that we might see in the coming years and what is the investment that we are doing on the solar?
Anuj Jhunjhunwala
So we’ve invested about two and a. Half crores or so in the first phase of solar power generation. This solar power generation is expected to commence this month and we will be going in for future expansion of our solar power generation in both Nairupeta and in the Dahej plant.
Dhiral Shah
Okay, so what kind of saving we are expecting from this? How much? This will cater to our power requirement on the renewable side.
Anuj Jhunjhunwala
So our renewable power, you know, the share of renewable power, our target is to go up to about 55 to 60% in four years time. And with phased investments over the next three to four years time, we feel this can be done. And in terms of the saving, I. Would say based on our understanding and our workings, the IRR of a solar. Power plant basis, the current power cost, etc. That we have is close to about 18 to 20%. So I would say it’s a decent investment. If you look at it from, you know, from a return on investment perspective where the return on investment is about 18 to 20% per annum. So it’s a decent saving I would say.
Dhiral Shah
Okay, and so what was the contribution on the export side on an end month basis as well as in Q3?
Anuj Jhunjhunwala
So export share is about 13 to. 14% on, I would say give or take a percent on a three month and a nine month basis. And as we’ve guided earlier, you know exports will be in the range of 10 to 15%. Yes. The base gets higher. So the volume number in exports increases. But we don’t expect this export share to become 25, 30% in the near future.
Dhiral Shah
Okay. Okay. So that’s it from my side. Thank you so much, sir.
Anuj Jhunjhunwala
Thank you.
operator
Thank you. Our next question comes from the line of Kaushal Sharma from Equinox Capital Venture Private Limited. Please go ahead.
Kaushal Sharma
Hello, am I audible. Hello?
Anirudh Jhunjhunwala
Yes we can hear you.
Kaushal Sharma
Yeah, yeah, I just have one follow up question on your solar project. Like you have put one solar project, so what kind of margin improvement from this project and the capex and the size of the project in the Phase 1 and, and we are also putting another Phase 2 project. What amount of CAPEX is required and how would they impact on a very bigger margin? So could you please explain it?
Anuj Jhunjhunwala
I think I just answered this question. That the first phase capex was under 2.5 crores and we expect that the return on investment on these projects is about 80 to 20%. So I think the incremental profitability per year should be about 60 to 70 lakhs per year over the next four years, each year. So this will be the, you know, incremental profitability because of the solar project. I think I just answered this question in detail before this.
Kaushal Sharma
Okay sir, thank you.
operator
Thank you. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. Participants who wish to ask a question may press star and one on the Touchstone telephone. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Anirudh Jhunjhunwala
Thank you. Thank you to all the participants who have participated in today’s Earning Calls conference. I hope we have been able to answer most of your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or you would like to know something more, please reach out to our investor relation managers at Validum Advisors. They would be most pleased to answer you. Thank you and thank you once again for joining us today. Have a good day. Thank you.
operator
Thank you. On behalf of Philip Capital Private client group. That concludes this conference. Thank you for joining us and you may now disconnect your lines.