Jubilant Ingrevia Ltd (NSE: JUBLINGREA) Q2 2025 Earnings Call dated Oct. 22, 2024
Corporate Participants:
Pavleen Taneja — Head, Investor Relations
Shyam S Bhartia — Chairman
Deepak Jain — Chief Executive Officer and Managing Director
Varun Gupta — President and Chief Financial Officer
Analysts:
Siddharth Gadekar — Analyst
Gokul Maheshwari — Analyst
Rohan Gupta — Analyst
Nitesh Dhoot — Analyst
Gaurav — Analyst
Malay Sameer — Analyst
Dhruv Muchhal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Jubilant Ingrevia’s Q2 FY ’25 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Pavleen Taneja, Head of Investor Relations at Jubilant Ingrevia Limited. Thank you, and over to you, Mr. Taneja.
Pavleen Taneja — Head, Investor Relations
Thank you, Dalvin. Good evening, everyone. Thank you for joining our quarter two of financial year 2025 earnings conference call of Jubilant Ingrevia Limited. I would like to remind you that some of the statements made on the call today could be forward-looking in nature and a detailed disclaimer in this regard has been included in the press release and results presentation that has been shared on our website.
On the call today, we have Mr. Shyam Bhartia, Chairman; Mr. Deepak Jain, CEO and Managing Director; Mr. Varun Gupta, CFO, Jubilant Ingrevia Limited; and Mr. Arvind Chokhany, Group CFO, Jubilant Bhartia Group.
I now invite Mr. Shyam Bhartia to share his comments. Over to you, sir.
Shyam S Bhartia — Chairman
Thank you for being. A very good evening to everyone. Thank you for joining us on the quarter two of the financial year 2025 earnings conference call of Jubilant Ingrevia Limited. We are pleased to announce a healthy quarter-on-quarter, year-on-year growth for the quarter, fueled by enhanced performance of our Specialty Chemicals and Nutrition & Health Solutions business, as well as the advantages gained from cost savings measures implemented over the last few quarters.
Let me share the overall market update with you all. Globally, chemical markets are gradually improving in 2024 with volume showing a marginal growth over last year and we are witnessing the same in our businesses. The pharmaceutical end-use segment continues to experience steady demand supported by stable pricing and volume placements. Our pharma portfolio in Fine Chemicals reflects the sentiments. We continue to face pressure in Acetyle business though due to low demand in the Paracetamol segment.
The agrochemical sector is beginning to show some signs of improvement. The excess inventory situation gradually resolving and the volumes recovering in Pyridine-based products. We are optimistic that steady recovery will continue over the coming quarters. The Nutrition segment, demand remained steady with Niacinamide volumes showing an upward trend and prices rising during the quarter. Meanwhile, the demand for Choline remained stable, although the pricing pressure continued due to high imports.
Let me talk about our business updates. In Specialty Chemicals business, we saw a notable increase in volumes of high-margin Fine Chemical business in both quarter-on-quarter year-on-year. The Pyridine & Picolines segment showed material year-on-year growth driven by higher volumes. The CDMO business continues to show good traction with customers across pharma, agrochemicals and semiconductor segments, although at early stage.
In Nutrition & Health Solutions, significant year-on-year and quarter-on-quarter growth was driven by increased volumes and prices of Niacinamide; margin growth was boosted by better product mix and higher share of volumes versus last quarter from human grade products. In Chemical Intermediates business, quarter-on-quarter growth was attributed to increase in volumes of Ethyl Acetate and Acetic Anhydride. However, year-on-year performance declined mainly due to lower prices.
We are excited to share that we have signed a five-year agreement with a multinational Agro-innovator to produce key intermediate for one of the strategic agrochemicals. Jubilant Ingrevia will manufacture the intermediate using the MNC’s proprietary technology. As a result of this contract, the company anticipates a significant increase in overall revenue share from its agrochemical CDMO business post commercial product, commencement of production. We are glad to announce that our inclusion in the prestigious Global Lighthouse Network, GLN of the World Economic Forum.
WEF has recognized Jubilant Ingrevia Limited, Bharuch manufacturing facility as a global manufacturing lighthouse, making us only the — making us only Indian company to achieve this distinction in this cohort. Over the last few years, we have made significant investments to digitally transform our plans and results are evident in the enhanced efficiency, environmental performance and safety basis. We are grateful to the WEF for their ongoing partnership in this journey.
Now let me share few details of our future outlook. We expect to see improvement in our overall business performance in FY ’25, particularly within Specialty Chemicals and Nutrition & Health Solutions business segments. Consistent with the last few quarters, our primary focus remains on customer centricity, utilizing the newly commissioned plants, enhancing operational efficiency, leading to further improvement in margins. We expect sequential improvement in the performance in Q3 and Q4 with H2 FY ’25 to be even better versus H1 FY ’25.
We are committed to our growth plans through our ambitious Pinnacle 345 vision of achieving 3 times revenue and 4 times EBITDA within five years.
With this, I now hand over to Deepak to discuss the business in detail and wishing all of you a very happy and prosperous Diwali. Thank you.
Deepak Jain — Chief Executive Officer and Managing Director
Thank you, Mr. Bhartia. A very good evening to all of you. At the outset, I would like to thank you all for joining us today for the quarter two of FY ’25 investor call of Jubilant Ingrevia Limited.
Let me first take you through the overall market overview for the second quarter of this fiscal year. In pharmaceuticals, during the quarter, we observed steady demand and good visibility on volumes across segments, particularly in pyridine derivatives. Additionally, prices largely remained stable with slight increase in certain segments. However, demand driven by Paracetamol segment continued to face challenges as most customers operated their plants at suboptimal capacities.
In the Agrochemical sector, demand is slowly returning and issues related to global inventory destocking seem to be easing. However, we anticipate that full recovery will be gradual. Volumes for pyridine-based products are also showing signs of recovery. We expect that additional capacity in similar agrochemical products in the coming years will further boost pyridine demand.
In nutrition, we are seeing an increase in Niacinamide volume offtake with prices also experiencing a rise. Demand for choline remained stable, although pricing pressure from international competition persisted for most part of Q2. We are also making ongoing efforts to gradually enhance traction in products aimed at human consumption. We have rolled out several new initiatives in the last three quarters in line with our Pinnacle 345 growth roadmap that we announced a few months back.
Let me share a few key highlights to demonstrate the progress across those initiatives. Number one, our core product platform continued to drive growth and maintain our leadership position. We upheld our market share despite facing significant challenges in the Acetyl sector. We achieved significant volume growth in Pyridine & Picolines on a year-on-year basis, we e are now globally number one player in Pyridine & Picolines and the only scale non-Chinese player.
In Niacinamide, we retained our leadership position being the top two player in [Indecipherable]. We also achieved steady quarter-on-quarter growth in volumes along with marginal increase in prices. In Acetic Anhydride, we observed marginal quarter-on-quarter growth in volumes, although prices continue to remain under pressure. Despite the challenging circumstances, we managed to maintain our market share in FY ’25 in both Indian and European markets.
Number two, we continue to maintain our revenue share of the Specialty and Nutrition business to 59% and EBITDA share at 73% in the overall portfolio. Our Fine Chemicals microbials and nutrition products are showing strong year-on-year growth. Our new product lines in Di-ketene and Food Grade Choline Bitartrate are demonstrating strong momentum as well.
During the quarter, we secured orders in agrochemicals space with two large MNC Agro-innovators. On the first one, by securing one of the largest CDMO deals in the agrochemical sector in India, we will serve as a critical Agro intermediate supplier for a product from a multinational corporation. Our aim is to partner with the client to scale up production in a reliable, sustainable, cost efficient and quality assured manner. Furthermore, this partnership underscores our commitment to rapidly growing and investing in our CDMO business in the coming years.
On the second one, we also have received — we have also received a similar but relatively smaller CDMO order from another agrochemical innovator for a key intermediate of their new AI. The supplies are expected to start in early FY ’26 and we hope this intermediate will scale up significantly in coming years as our innovator customer grow the AI volumes going forward.
Our extensive customer engagement through roadshows continued in quarter two of FY ’25 also with successful events held in Japan, Europe, U.S., China and India. These efforts have generated significant interest in collaborating across the agro, pharma, nutrition and semiconductor spaces. We are already experiencing an increase in our export share dragging to 48% in Q2 FY ’25 compared to 38% in Q2 of FY ’24, thereby reducing our reliance on the domestic market. Our export grew by 30% year-over-year with the European Union and Japan driving this growth. With the China Plus One strategy gaining momentum, we are seeing a steady stream of inquiries from global clients. Many of these discussions are progressing into advanced stages and we are confident in our ability to meet their long-term needs in the future.
Number three, with our heightened emphasis on ESG, sustainability is central to our operations. As global leaders, particularly in Europe and the United States ramping up their efforts to cut Scope-3 emissions, Jubilant Ingrevia is dedicated to aligning with these goals and furthering our sustainability initiatives. In recognition of our ESG efforts, the WEF had honored our Bharuch manufacturing facility as a global manufacturing lighthouse, making us the only Indian company to achieve this distinction within the cohort and amongst the select few ones in chemicals industry globally.
Through this program, we implemented four IR technologies at our Bharuch site and reskilled many employees to prepare them for a digital future, utilizing over 30-plus integrated use cases that leverage artificial intelligence, machine learning, IoT-based digital trains and predictive platforms, we achieved a 60% reduction in overall process variability and significantly increased production volumes. This initiative also boosted workforce productivity by more than 20% and cut Scope-1 emissions by over 20%.
Number four, our long-term capex plans are on track with continued investments in new opportunities such as food and cosmetic-grade Niacinamide slated for commissioning in Q3 of FY ’25 and other multipurpose plants in the pipeline. In coming quarters, we will announce the launch of more capex projects in line with our long-term growth strategy.
Number five, we have further strengthened our leadership team by welcoming Mr. Varun Gupta as our new CFO; and Mr. Birajeev Singh as our new Supply Chain Head. Both Varun and Birajeev come with deep experience and expertise in their respective teams. With all the changes we have made in the organization, including in the top team in last one year, I’m glad to share that we now have one of the best and most energized teams at JVL to drive us towards our long-term Pinnacle 345 ambitions.
And number six, finally, on cost front, as I have announced in the previous quarters, we continue to make the organization leaner and agile with over INR120 crores per year of savings already mobilized. We have also been able to successfully manage our net working capital at optimal levels for last three quarters, driven by our inventory optimization and aggressively — aggressive DSO management.
Now let me take you through the updates on all of our key business segments individually. Specialty Chemicals. During the quarter, the Specialty Chemicals segment revenue grew by 13% on a year-on-year basis on account of higher volumes coming from, pyridine building block and derivatives.
EBITDA for Specialty Chemicals grew by 26% on a year-on-year basis on the back of increase in volumes of high-margin Fine Chemicals pyridine derivatives, both quarter-on-quarter and year-on-year, touching almost 20% EBITDA margin. Our CDMO business is on a robust growth plan underscored by the timing of a five-year $300 million-plus contract with a multinational Agro-innovator.
The Di-ketene plant operated at a healthy utilization level with good volume traction in the newly commissioned facility. The Paracetamol platform demonstrated strong market acceptance and experience both quarter-on-quarter and year-on-year growth. In Nutrition & Health Solutions business segment, during the quarter, revenue for the Nutrition business increased by 12% year-on-year, driven by higher sales volumes of both animal and human-grade Niacinamide along with elevated pricing.
EBITDA for the quarter increased by 29% year-over-year, primarily due to favorable shift in volume mix towards human-grade products as well as lean initiatives and optimized input costs. Overall, Niacinamide demand remained stable during the quarter, though pricing improved significantly during the quarter. Newly launched products, Food Grade Choline Chloride and Choline Bitartrate continued getting traction in the market. Our GMP-compliant facility for food and cosmetic-grade vitamin B3 is set to launch in Q3 FY ’25 and we are already seeing strong customer interest in booking advanced volumes.
In Chemical Intermediates Business segment, quarterly revenue increased by 5% on quarter-on-quarter basis due to improvement in volumes of Acetic Anhydride and Ethyl Acetate. EBITDA for the quarter improved by 13% on quarter-on-quarter basis, primarily due to marginal — marginally higher volume and cost-saving initiatives, although this was partially offset by rising ocean freight costs in other Acetyl business. We witnessed improved volumes of Ethyl Acetate and Acetic Anhydride, even though Acetic Anhydride volumes remain under pressure on account of lower demand from Paracetamol end-use [Phonetic].
Our market share for Acetic Anhydride in Europe remained firm, supported by the acquisition of new customers. We also maintained a dominant position in the domestic market for Acetic Anhydridee.
With this, let me now hand over to Varun to discuss the financials of the company. I wish you all a very Happy Diwali.
Varun Gupta — President and Chief Financial Officer
Thank you, Deepak. Season’s greetings and a very good evening to all of you. I would like to thank you all for joining us today for the quarter two of financial year ’25 investor call of Jubilant Ingrevia Limited. I’m excited to interact with all of you in my first investor call. The overall revenue during the quarter stood at INR1,045 crores as against INR1,020 crores in quarter two financial year ’24. The revenue was higher mainly due to higher year-on-year revenue from Specialty Chemicals and Nutrition & Health Solutions business segments.
The EBITDA for the quarter is INR135 crores, reflecting a 13% sequential increase quarter-on-quarter and 7% increase on a year-on-year basis. This growth was primarily driven by margin improvements in the Specialty Chemicals and Nutrition segments along with cost optimization initiatives. During the quarter, we also reduced our net debt when the net debt of the company as on 30th September ’24 was INR650 crores and net debt to EBITDA ratio was 1.4 times on the basis of trailing 12 months EBITDA.
The capex expenditure incurred during the quarter was INR91 crores and year-to-date for the first six months was INR207 crores, which was primarily funded through internal accruals. Net working capital percentage to turnover for quarter two 2025 was lower at 17.1% as against 24.3% in quarter two financial year ’24. Number of days of working capital has reduced to 63 as against 89 in the same quarter last year. The PAT for the quarter is INR59 crores as against INR57 crores in quarter two financial year ’24.
With this, I would like to conclude our opening remarks. We are now happy — we’ll now be happy to address any questions that you may have.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question is from the line of Siddharth Gadekar from Equirus. Please go ahead.
Siddharth Gadekar
Hi, sir. Congrats on the strong set of numbers and the contract win. Sir, could you provide some clarity on the $300 million contract like in terms of timelines when do we expect this contract to start?
Deepak Jain
Hi, Siddharth. Thank you. So that’s obviously one of the biggest events for us in this quarter. So as I already said, this is a $300 million-plus contract, which is over next five years. The commencement of production will probably start sometime late next calendar year because we need time to prepare our agrochemical plant to be able to produce this intermediate.
Siddharth Gadekar
Sir so how much incremental capex we would be doing in that plant and how much time will it take to ramp up the entire volume?
Deepak Jain
So I think as most of you already know, we have — we commissioned a new Agro intermediate and active plant in the early part of this year, this calendar year. So the plan is to do the modifications and expansion in that plant and we will require at least another INR300 crore-plus to do that over the next 12 months to 14 months for that plant to be ready to deliver on this contract.
Siddharth Gadekar
Sir, and lastly in terms of margins or ROCE, how should we look at this in terms of this contract?
Deepak Jain
See, I think I have said that in the past also every decision we take at Ingrevia from investment perspective, the minimum threshold for us is 20% EBITDA and 20% ROCE. So we have applied the same filters and same screens as we finalize the commercial construct of this contract as well.
Siddharth Gadekar
Sir, and in terms of the value chain, can you just give us some understanding like how many steps would we be doing for the customer or it would be a basic pyridine derivative that we would be supplying?
Deepak Jain
Siddharth, I unfortunately cannot disclose too much, but what I can say is it’s in one of our core chemistries and number two, it will be a fairly advanced intermediate, so complex one.
Siddharth Gadekar
Got it. So just one more last question on the second contract that we had just spoken about, where we said supplies will start from next year. Can you give some color in terms of how much revenue can we expect from that contract?
Deepak Jain
So again, I won’t be able to give precise numbers. That one is also, I think more than the revenue, the more important thing is it’s for a molecule or AI, which is — which is a proprietary one and which has not been launched by the innovator. So they have engaged us at a fairly early stage and even the initial volumes will be quite significant running into hundreds of tons. And it’s a — it’s going to be high-margin one for us as well. And the supplies of this one will start in the early part of next financial year. So this will come earlier than the bigger one that we talked about.
Siddharth Gadekar
So for this, we won’t have to do any capex. Is that understanding correct?
Deepak Jain
Some marginal improvements in one of our existing plants, but no major capex.
Siddharth Gadekar
Okay. Thank you. I’ll get back in the question queue.
Operator
Thank you. We have the next question from the line of Gokul Maheshwari from Awriga Capital. Please go ahead.
Gokul Maheshwari
Yeah, hi, thank you for the opportunity. Deepak, you mentioned in your opening comments that you are also working on certain newer projects in the horizon, by which you will announce in due course, but if you could just give an overview of what areas are you may be looking in terms of these capex projects?
Deepak Jain
So I think as we announced in the Q4 of last fiscal year investor call, our Pinnacle 345 strategy has the aspiration of taking our revenue 3 times of our size in next five years. As part of that, we have worked out bottom-up plans across different business units and then the capex that I talked about for future are aligned with that strategy.
Broadly speaking, most of the new incremental capex, I think not broadly. In fact, I have said that in the call — in these calls in the past, almost 100% of all incremental capex is going to go into specialty chemicals and specialty part of Nutrition segment in future. And if I just talk about the specific areas, obviously, I can’t shed too much details, but most of it will go to serve our CDMO business, both on the Agro and pharma side, our Fine Chemicals portfolio through multipurpose plants, our Specialty, Nutrition products, particularly on the human and cosmetic-grade side. So those are the areas where we’ll be investing further going forward.
Gokul Maheshwari
Okay. And my second question is, if you could just comment on — while you mentioned that there is stability and very decent growth in the pharma side, could you elaborate a bit more on where are we on the agrochem side in terms of your interactions with the customers? Is the destocking done or is prices bottomed or moving, what are you picking up while interacting with your clients?
Deepak Jain
Yes. So I think I would maintain what I said on the previous call also, Gokul. Agrochemical sector, in our view from a demand perspective, we think that the destocking problem is largely over and we can see volumes coming back and you can also see our results where pyridine, which grows — almost 50% of our pyridine portfolio is built around agrochemicals. We are seeing volumes coming back there. So for us, that’s the first indicator and we can already see that growth coming back.
On the pricing side also, while the broader market still have softer pricing. At least in our segments, there are pockets where we have already started to see prices also moving up, even though I think it may take some more time for the broader market to improve. But by and large speaking, at least we are seeing good traction both from volume and pricing perspective in our core segments.
Gokul Maheshwari
And just on this part, is China still a headache for us, in the sense that are they producing as aggressively as what has been in the case of the last 12 months, 18 months?
Deepak Jain
See the — I think if you look at even the import prices from China, they seem to have bottomed out and have seen largely a flat trend on pricing over the last few months and even uptick in certain product segments. That’s number one.
Number two, despite China being aggressive over the last one, one and a half years, I think as I mentioned in my opening remarks, the China Plus One trend is playing out very strongly with a lot of innovators and our customers speaking to us as us being their potentially Indian supplier from a reliability perspective.
And third, I think the biggest proof of this trend is the new contracts that we have signed on the CDMO side. Both of them are in agro and that’s despite the fact what is — that the market has been down over the last six, eight weeks.
Gokul Maheshwari
Great, great. Thank you and all the best.
Deepak Jain
Thank you.
Operator
Thank you. The next question is from the line of Rohan Gupta from Nuvama Institutional Equities. Please go ahead.
Rohan Gupta
Yeah, hi, sir. Good evening and thanks for the opportunity. And first of all, congratulations on winning dual contracts in CDMO.
Deepak Jain
Thank you, Rohan.
Rohan Gupta
Sir, on the second contract, though I don’t want to get into too much of the specifics of the contract, but if you can sir share that it’s a roughly $300 million kind of contract, which you have mentioned in the PPT. What this $300 million means and what over a period of time. Second, you mentioned that in your earlier remarks that this contract is actually, I mean, for the new AI getting associated with the innovator at an early stage of COVID development. If you can elaborate a little bit that the product has yet not been commercialized, is still in the phase of commercialization, Phase 1, Phase 2, what stage it is with the innovator and where and what product or at what stage of N-1 or final AI what we are making for the customer.
Deepak Jain
So Rohan, I think you have mixed up the two different orders. So let me just talk about each one of them one by one, so that there is absolute level of clarity. The first one I talked about is the big one, which is $300 million-plus spread over next five years. That is not the new AI. This is an existing AI and we are doing an advanced intermediate for that AI. And it’s a — it’s a big contract. And as I said, we will need to make our agro intermediate and AI plant ready over the next 12 months for us to be able to deliver on this contract and the commercial production will commence sometime second half or later part of next calendar year. So that’s one.
The second one is the new AI, which is a relatively smaller order that we have gotten. It’s for an AI which has — which is not launched yet. So the innovator has gotten us involved in the early stage, but they expect the volumes to run into hundreds of tons even in — at the time of launch. We are expecting the supplies to commence in the early part of FY ’26, which is the April, May timeframe, which is when the product will be launched. We’ll be making intermediates for this as well. And this also is a multistep process. We will be doing one of the intermediates in that value chain.
Rohan Gupta
Yes, sir. Thank you for the clarifying. I was talking about the second contract only, not the first one. So when you say sir, the early stage of the product innovation or the — and so the product has yet to be launched by the customers, right? I mean, or and whether we are replacing an intermediate manufacturing to whom we are replacing, whether the customer earlier was making it by himself or buying this intermediate from China, what we are [Indecipherable]?
Deepak Jain
No, so Rohan, this product is not — the final AI is not commercialized AI.
Rohan Gupta
Okay.
Deepak Jain
The customer will be — obviously, they were in the process of doing the development of the product so far and hence all the steps they were developing internally. They have now gotten us involved where one of the intermediates which has linkage back to one of the platforms that we have in our portfolio, that’s why they have gotten us involved on this product.
Rohan Gupta
Okay, sir. That clarifies. Thank you so much, sir.
Deepak Jain
Okay. Thank you, Rohan.
Operator
Thank you. The next question is from the line of Nitesh Dhoot from Dolat Capital. Please go ahead.
Nitesh Dhoot
Hello. Yeah. Hi, good evening team and thank you so much for the opportunity. My first question is on the Specialty Chemicals revenue. What I see is the revenues are of INR50 crores year-on-year for Q2. And as the PPT mentions that there is a significant volume growth on a year-on-year basis. So how much of this growth is coming from Pyridine and how much from Di-ketene, and where would we be in terms of utilization, some capacity utilizations for both Pyridine and Di-ketene?
Deepak Jain
So thank you, Nitesh. So obviously, the — as you can see in our results, the Specialty Chemicals revenue have grown year-on-year by almost 13%. What I can tell you is in terms of volume, the growth has been much higher than the 13%. Obviously, as all of you know, versus last year, the prices have come down. So that shaped up part of our overall growth. The growth in terms of volume is close to 25% in this portfolio for us. And it is — it is a broad-based growth within our specialty portfolio. So the Pyridine building blocks has grown, Pyridine derivatives has grown, Di-ketene derivatives have also grown. So it is more — microbial has also grown. So it’s across segments.
In terms of your second part of your question, the utilization levels on — and Di-ketene I think I had answered that in the previous quarter also and broadly, the answer is same. We have done two phases of expansion in Di-ketene. The Phase-1 happened almost one and a half, two years back. There our plants are running at 75% plus utilization levels. The second phase expansion happened in the early part of this calendar year around March where we launched two more products. Of the two products, one — for one, the utilization levels are already close to 70%. For the second one, we have supplied samples from the new plant to a few big customers and they are just in the final stages of approving the samples. As soon as that happens, we expect even the second plant to take to 50% plus utilization, hopefully within this or later by next quarter.
Nitesh Dhoot
Thanks, sir. And in terms of the Pyridine capacity utilization.
Deepak Jain
Pyridine capacity utilization is the question?
Nitesh Dhoot
Yes, sir?
Deepak Jain
So, Pyridine we have mentioned in the past, we have 48,000 tons of capacity for Pyridine & Picolines and we are running it at close to 75% to 80%.
Nitesh Dhoot
And so secondly, on the capacity utilization on Acetic Anhydride on the 2 lakh tons — 1,000 tons capacity and also in the food grade acetic acid, if you can help elaborate.
Deepak Jain
Yeah. So Acetic Anhydride, you’re right, we have almost 190,000 tons of capacity — 2 lakh tons of capacity. We are running Acetic Anhydride at around 70% plus utilization across our plants. Obviously, as I mentioned in my opening remarks, there is some pressure on anhydride business, particularly driven by lower paracetamol volumes and production, we are hoping as the markets improve, we’ll be able to take that utilization level up. But despite that, if you see quarter-on-quarter, in our broader Acetyl portfolio, there has been increase in volumes.
Nitesh Dhoot
Sure. And sir, on the choline chloride business, what I understand it’s largely domestic market-oriented products there. So what’s the strategy in terms of the pharma, the food grade, etc., that you’ve mentioned?
Deepak Jain
So I think that’s not — you talk about Niacinamide or Choline, because Choline doesn’t —
Nitesh Dhoot
From the choline chloride.
Deepak Jain
So choline doesn’t go in pharma grade. Choline, we have two parts of choline business. One is the animal feed grade choline, which is the dye CC and liquid CC, choline chloride, which we do largely in domestic market, but we also supply to some of the neighboring international markets. That business volume-wise is holding up, but there is some pressure on pricing because of the imports. So we are working through our cost structure and other areas to be able to maintain our market share there. We are the biggest player in the domestic market there.
This is the second part of choline where as I announced in the previous two calls, we have launched food grade and human nutrition grade choline product, choline chloride and choline bitartrate. Those products are — we have started to seed the market. We are getting very good traction with most of our customers. Many of the customers have now visited our plants as well and they have done the audit. So we are hoping that the volumes will start picking up in that segment in coming months.
Nitesh Dhoot
Sure. Thank you so much for the answers. Thanks a lot.
Deepak Jain
Yeah.
Operator
Thank you. The next question is from the line of Gaurav [Phonetic] from Invesco Enterprises. Please go ahead.
Gaurav
Hi, thanks for the opportunity and congratulations on a good set of numbers. I hope I am audible, right?
Deepak Jain
Yes, Gaurav.
Gaurav
Yeah. Thanks a lot. Sir, my question is on our vision to grow our revenue to 3 times and EBITDA to 4 times in five-year time horizon. So I just want to understand what would be the base year of when we are evaluating that from this number that we want to take to the 3 times of the revenue, what is the — is it the FY ’24 or is it the current financial year FY ’25 is the base year?
Deepak Jain
No, the base year and somebody else also had asked this question in the last call. So the base year for revenue is FY ’24, which is let’s say INR4,000 — INR4,200 crore of revenue and the lending year is FY ’29. But so all the bottom-up estimates and planning was done, keeping those numbers in mind. Having said that, as I explained in the — in the previous investor call also, obviously, there were certain assumptions we have made at that time when we did this exercise in January, February timeframe on pricing as well as market recovery, particularly on the agrochemical side.
Given that there is some uncertainty and lag on that recovery, obviously, there could be couple of quarters of our timeline tweaking to this, but by and large, we stick to the overall vision we have crafted under Pinnacle 345.
Gaurav
That’s great. So within this — within this just for an understanding purpose, since we are — mainly our revenue comes in three segments, Specialty Chemicals, Nutrition & Health Solutions and the third one that is the Chemical Intermediates, which is a significant portion of our revenue, but in terms of the EBITDA, this is not so great as compared to the Specialty Chemicals and Nutrition & Health Solutions, right?
So whatever proportion of revenue was there in FY ’24 vis-a-vis what we envisage as per our Pinnacle 345 strategy, what would be the ratio of these three segments when we [Indecipherable] to achieve it a turnover of maybe approximately INR12,000 crore after five years or so. Is it going to the same proportion or proportion is going to be changing or I mean to say the mix is going to change?
Deepak Jain
No, so Gaurav, I think you have seen the number part, you should also revisit the slide which we put in our presentation behind Pinnacle 345. What it clearly states is the overall direction is to increase the share of specialty and nutrition in our business and that is something which we explicitly if you see even today’s investor presentation, we have laid out what percentage of EBITDA is coming from nutrition and specialty and that is close to 73% now. The plan as well as expectation is that that will continue to grow.
Today, Acetyl constitutes roughly 35% to 40% of my revenue and almost 25% of EBITDA. The relative share of Acetyl in the overall portfolio will continue to come down as specialty and nutrition portfolio grow on the back of all the investments we have done in last three years and what we will continue to do even in future as per the plans I described in response to one of the questions which came earlier.
Gaurav
No, I got that and I was going to the presentation also, but when we are modeling or when we are expecting that in terms of the percentage of the mix, right, you have clearly mentioned that 60% of the revenue between these two segments and EBITDA somewhere around 73% kind of EBITDA that is coming as of now. But over a period of time, three, four, five years, this revenue mix, I’m not focusing — because EBITDA you have already given that 4 times you want to increase vis-a-vis FY ’24, right? So what is going to be the mix change there, from 60% as of now, is it going to be 65%, 70%, 75% though your energy is more concentrated towards increasing the share?
Deepak Jain
Gaurav, I won’t be able to give precise numbers as I should not. But yeah, it will be north of 75% for sure for specialty plus nutrition together.
Gaurav
Thank you. And the last one, if you may allow me to achieve the strategy, any impact going to be in terms of our debt numbers like for incremental capex, is it going to be funded from the internal accruals or external debt would be required to be taken up?
Deepak Jain
Yes. So I think again I explained that in last two calls and then we maintained that. And you can see even in our quarterly results last three quarters, we have been able to manage our debt within, in fact, lower than what it was four quarters back, despite the fact that we have been continuously investing. So what it means is, by and large, our intent is to fund as much of incremental capex as possible from our internal accruals, which we have already — and as well as the efficiency initiatives that we have taken. So that we are going to continue.
We are expecting at least INR600 crores to INR800 crore of incremental capex every year for next few years, next three years at least. And we feel a major proportion of that we can fund through internal accruals as well as the EBITDA, which we hope to get on the back of all these investments. If at all, we need to, we will need to increase our debt level marginally only, but that also we want to keep within — right now we are at INR650 crore INR700 crore as Varun explained but in no scenario, we want it to go beyond INR900 crores INR1,000 crore and keeping our coverage ratio well under 1.4, which is what we have internally set as a benchmark.
Gaurav
Thanks a lot. I will come back in queue. Thanks.
Operator
Thank you. The next question is from the line of Malay Sameer from Breakthroughs in Stock Market. Please go ahead.
Malay Sameer
Hi, Deepak. Congratulations for the two orders that you’ve got for CDMO. Very impressive. I just want to pick your mind on the BIOSECURE regulation that is expected to be coming in by 2034. We hear that there could be a very big swing away from China to the countries that can supply and fill in that gap. Now that we are becoming one of the world’s largest suppliers and we have a full backward integration chain. Do you think these orders that are coming in right now are just the tip of an iceberg?
Deepak Jain
No, no, Malay, that’s a very good question. First let me let me answer your question at a slightly macro level based on all the — all the interactions I’ve had with the customers as I mentioned in the past and then you can see in our IR presentation also. We have been doing several roadshows. We have done seven of them and we have met some 120, 130 customers and not just at the buyer level, but at a CXO level, many of these meetings. So obviously, we gather a lot of insights and understanding of how the customers are thinking about their future supply chain.
And the consistent thing, which I have heard in all these meetings is that everyone wants to diversify and add more reliable scaled suppliers in India to derisk from China. And that is what I said in my opening remarks as China Plus One strategy, which I think most of us have now heard several times, but I can tell you not even a single customer did not talk about it. So everyone is just talking about it, thinking about it proactively, some are of course at advanced stages, some are still thinking about it, but sooner or later, it was anyway supposed to happen.
Now with the BIOSECURE Act and obviously, with the expected results of U.S. elections, there is a — there is a feeling that it will become increasingly difficult for customers to rely only on Chinese suppliers. And hence, at least I expect this trend to only accelerate from here and leading to more and more outsourcing of manufacturing, not just in pharma but also in agrochemicals, cosmetics, semiconductor spaces to India.
And hence, coming to now second part of your question, I see these two contracts that’s only tip of the iceberg in terms of the number of such opportunities we expect to catch and realize in the coming years. Obviously, the size of those opportunities could be different depending on which customer and which molecule you’re talking about. The first one that I described is a big opportunity in agro and it’s one of the biggest contracts even in the Indian agrochemical industry. So those ones are rare in my view.
So in terms of numbers, I definitely to give you a sense, out of these 120 plus customer meetings, we have already created a pipeline of almost 100 plus opportunities. Now the size of those opportunities vary and obviously not all of them is going to convert, but we have created an internal funnel which we are working on and hoping that as some of these duty structures and China Plus One strategy play out, we will be able to convert many more contracts in the coming quarters and years.
Malay Sameer
Yeah. So that’s very encouraging. So I was thinking aloud that if a large player is shifting away from China to India, they would look at a full backward integrated chain. And as you just said in the presentation that we are such a large player, not just in India, but of course, India too, but we are a very large player globally. So wouldn’t that make us the first choice in India for those people to transition away from China?
Deepak Jain
No, Malay, so we cannot generalize that. Of course, the chemistries and product platforms which we have and there are seven or eight of them and you can see it in our presentation, IR presentation also. Anything which is falling in those value chains, obviously, we will be the natural and first contender to grab those opportunities. We still need to be competitive, responsive, agile, all of that will still be required, but we will obviously have natural advantage there. Likewise, some of our peer companies in India who are present and deep in other value chains, they will have an advantage over us in those chemistries. So we cannot generalize it. It is dependent on the chemistry.
I think the second part of it is of course all these companies while diversifying their value chains outside of China, they are having a very strong focus on ESG as well. And that is something where we score over many of our Indian peers are absolutely hands down because if you see our ESG journey, we started way back in 2001, we are number two in EcoVadis and [Indecipherable] ranking for several years now. Every year, we are taking several new initiatives and many of them we have announced in our presentations as well. So that advantage is going to have a huge — a huge area or advantage — that advantage is going to give us an edge versus our peers.
On top of that, now if I take the recent WEF green lighthouse recognition that our plant had that just established — establishes us as one of the not only just cost effected, backward integrated and environmentally focused player, but also a digitally advanced player or peer in the Indian agro — in the Indian chemical industry. So if you put all of those elements together, our backward integration, the different product platforms, cost competitiveness, environmental focus or ESG focus, digitally-enabled plant and on top of that willingness to invest capex ahead of revenue, it makes us a very solid contender for all these opportunities which is coming — which are coming India’s way in next few years.
Malay Sameer
Yeah. So Deepak, like for the first order that you announced, you’re saying that it will come somewhere late in calendar ’26 because we are investing into the peripheral —
Deepak Jain
Sorry, calendar ’25 not calendar ’26.
Malay Sameer
Okay. Because we are investing in the peripheral equipment, etc. So is it okay to assume that the future orders that will come to us will be executed with a much shorter time lag than receiving the orders compared to what we’ve done in the first two orders?
Deepak Jain
No, Malay, we have two examples right here. One, we are going to execute within four months to six months from now, another one, which will take at least 12 months. So what I’m trying to say is every order by definition, CDMO, C stands for customized and customized means you have to have a customized set of facility depending on the nature of chemistry, the complexity of the molecules. So obviously, if there is a molecule which falls in our chemistry and can be fitted into one of our existing plants, the timeline for that will be much shorter, let’s say, three to six months. And then that’s why we are creating a multipurpose plant ahead of time here so that we are ready with excess capacity and we can fix some of these molecules into those plants.
Obviously, if there is a bigger molecule which requires a specific kind of technology or process setup, the timelines and then we have to create a new plant or make significant changes to an existing plant, the timeline for that will be at least 12 months. So at this stage, it’s very difficult to give you timeline in a generic way. It will be customized to every order. But what I can assure and tell you is, internally, our projects team, our design team, our operations team, we are gearing ourselves to ensure that we are agile to the customer — even our R&D team, we are agile and in responding to our customers and deliver as quickly as possible because it’s not — it’s important not just for my P&L and balance sheet, it’s important for my customers’ P&L even more because they wanted the product yesterday and they are coming to us now because of this pressure coming to them and with the BIOSECURE Act which you talked about, there is a huge amount of urgency in their minds to move quickly.
Malay Sameer
Thank you so much, Deepak. Thank you for taking all my questions.
Deepak Jain
Thank you, Malay.
Operator
Thank you. We have the next question from the line of Dhruv Muchhal from HDFC Asset Management. Please go ahead.
Dhruv Muchhal
Yeah, thank you so much. And apologies if this is a repeat. If you can please help us some more granularity on the capex plans that you have INR600 crores to INR800 crores per annum over the next three, four years. I understand largely this will be in Specialty and Nutrition, but some more granularity, where do they go? Is it agro, is it pharma? Is it — I’m not sure, Pyridine, what areas are you looking at?
Deepak Jain
Yeah. So, Dhruv, I think for the capex, there were questions in the previous three calls also. So the Wave 1 of our capex plan we had announced almost two and a half years back of INR2,000 crore. And at that time, we had announced a bunch of projects, 65% to 70% of that capex was supposed to go into specialty and the specialty part of our nutrition portfolio, which we have by and large stuck to. And as I speak, this fiscal year with almost INR1,300 crores INR1,400 crore of investment, which had already happened in the last two years, we are going through the last leg of initial or wait ones say INR2,000 crore that we had announced two and a half years back.
So this year with couple of projects already in play between our boiler in Bharuch and the cosmetic and food grade Niacinamide plant and then a few other debottlenecking and expansion plants, we will exhaust the Wave 1 INR2,000 crore capex. So that’s Wave 1. But in order to deliver on our Pinnacle 345 aspiration in FY ’29 or near about that time, we will need to take a wave through capex of INR2,000 crore INR2,500 crore over the next three years, which will be roughly, let’s say, INR700 crore, INR800 crores that I was saying earlier.
What I can tell you is almost — not almost, 100% of that will be geared towards opportunities which are falling in specialty and nutrition side of the portfolio. Obviously, a lot of those opportunities which will also be driven by what kind of CDMO and other contracts that we get from the customer because many of these will be multipurpose plants where we can absorb any customized requirement which comes from our customers. But the focus would be on CDMO opportunities in agro, in pharma, in semiconductors, the fine chemical derivatives in our Pyridine and Di-ketene value chain, the human and high-value animal, food and nutrition grade products in our nutrition portfolio.
So those are the opportunities which we are looking at as we draw the plans, investment plans for — is the second wave of INR2,000 crore, INR2,500 crore of capex over the next few years.
Dhruv Muchhal
Got it. So primarily in the Specialty segment, the investments will be targeted towards the CDMO segment, be it pharma, agro or fine chem or semis. That is the fair understanding, is it?
Deepak Jain
CDMO and fine chemical derivatives. We — as you know, we are world number one in Pyridine and Di-ketene also. We have aspiration to become a global leader. So — and we do those derivatives and this is a — this is our core portfolio. So we will be creating multipurpose plants to serve our Pyridine and Di-ketene derivative portfolio to expand it in coming years. So CDMO and Fine Chemicals are the two major parts within specialty.
Dhruv Muchhal
Got it. And quickly on the first CDMO INR300 million contract, just trying to understand the nature because there are various terms with the industry uses for contracts. Is this take or pay? Is it a flat, I mean equal revenue over the years, over the five years? And how is the margin structure? Once this comes, how does your specialty margins like — how does your specialty segment margins look like say FY ’27 when the full benefits probably starts to flow in?
Deepak Jain
No Dhruv, I cannot disclose all the details for obvious reasons, but it is a classic CDMO contract where there is an obligation on both sides, the buyer and the seller. It’s a five-year contract with even split of revenues over the five years. And on the margin and ROCE as I already answered in response to, I think somebody asked one of the questions in the earlier part of this call, our internal threshold is 20% EBITDA and 20% plus ROCE. So this contract clauses [Phonetic] the threshold on those benchmarks.
Dhruv Muchhal
Got it. Perfect. Thank you and all the best. Thanks.
Deepak Jain
Thank you.
Operator
Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Shyam S Bhartia
We thank you all for joining this call today. We hope we have been able to answer your queries. For further clarification, we would request you to contact me and thank you once again for your interest in Jubilant Ingrevia Limited.
Operator
[Operator Closing Remarks]