Jubilant Ingrevia Ltd (NSE: JUBLINGREA) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Pavleen Taneja — Head of Investor Relations
Shyam Bhartia — Chairman
Deepak Jain — Chief Executive Officer and Managing Director
Varun Gupta — President and Chief Financial Officer
Analysts:
Siddharth Gadekar — Analyst
Gaurav — Analyst
Tarang Agrawal — Analyst
Rohit Nagraj — Analyst
Unidentified Participant
Gokul Maheshwari — Analyst
Resham Jain — Analyst
Nitesh Dhoot — Analyst
Presentation:
Operator
The conference is now being ladies and gentlemen, good day and welcome to Jubilant Engraveya Conference Call. Please stay connected. The call will begin shortly. Participants will have been connected to Jubilant Ingraveya Conference Call. Please stay connected and the call will begin shortly hello. Ladies and gentlemen, good day and welcome to Jubilant Q3 and Nine Months FY ’25 Earnings Conference Call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Taneja, Head of Investor Relations at Jubilant and Limited. Thank you, and over to you, Mr Taneja.
Pavleen Taneja — Head of Investor Relations
Thank you, Neera. Good evening, everyone. Thank you for joining the quarter three of financial year 2025 earnings conference call of Jubiland Ingravey 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 Bharthia, Chairman; Mr Hari Bhatia, Co-Chairman; Mr Deepak Jain, CEO and Managing Director; Mr Varan Gupta, CFO, Ingraveya Limited; and Mr Arvind Chuckhani, Group CFO, Jubilin Bhatia Group. I now invite Mr Shyam Bharthia to share his comments.
Shyam Bhartia — Chairman
Thank you for. A very good evening to everyone. Thank you for joining us on the quarter three of the financial year 2025 earnings conference call of Jubilant Limited. We are pleased to announce significant year-on-year growth for this quarter attributed to enhanced performance of our Specialty Chemicals and nutrition businesses as well as to the benefits derived from cost-saving initiatives implemented in recent quarters. We are also glad to share that the Board has recommended an interim dividend of 250%, which equates to INR2.5 per equity share with a face value of INR1 each for FY ’25. This will result in cash outflow of INR39.8 crores. Let me share the overall market update with you all. Globally, chemicals market are witnessing gradual volume improvements. But pricing is staying muted in most segments and regions. We expect the volume growth momentum to continue into 2025, while the price recovery may still be slow. Pharmaceutical end-use market continues to see steady demand for bolstered by stable pricing and volume placements. Our pharma portfolio in the fine chemical business mirrors these trends. However, we continue to encounter challenges in the acetyle business due to low demand in paracetamol segment. The agrochemical sector has continued its upward momentum in this quarter, driven by positive volume growth on both year-on-year and quarter-on-quarter basis. However, average prices in the sector have remained flat indicating potential price stabilization. Nutrition market experienced a continued resurgence in-demand. Volumes remained stable with slight price increase during the quarter. Choline demand saw stronger growth in the faced pricing pressures from imports. Now let me talk about our business updates. In the Specialty Chemical business segment, we observed a notable year-on-year increase in volumes for the high-margin Fine Chemicals segment. The segment within fine chemicals experienced a significant year-over-year volume growth and stronger price improvements. Pyridine and segment also showed substantial year-on-year growth driven by higher volumes. Additionally, the CDMO business continues its traction with the increase in inquiries from customers in the pharmaceutical, agrochemical and semiconductor sectors. The Nutrition and Health Solutions business segment experienced continued year-on-year and quarter-on-quarter volume growth, primarily driven by significant volume increases in products. While neoceramide volumes remained stable, we also saw uptick in neocinamide prices last quarter the Chemicals Intermediates business segment, we observed year-on-year volume improvements driven by sales. Volumes were muted due to low demand in paracetamol segment for prices in this segment remained under pressure and impacted margins significantly. We are pleased to announce the commissioning of our new CGMP compliant vitamin B3 facility in, Gujarat. This facility will produce nutraceuticals and three active ingredients for human consumption in food and cosmetic segments. The production of these new grades of B3 will significantly boost our presence in the value-added products market, offering high-value and high-margin solutions. We are also proud to announce that Jubilant Ingravia Limited has received the prestigious Global lighthouse Network Award from World Economic Forum. This honor recognizes our manufacturing facility for its outstanding integration of fourth Industrial Revolution Technologies, making us the only chemical company worldwide in the 2024 cohort to achieve this distinction. Let me share a few details on our future outlooks. Anticipate continued improvement, continued upward momentum in and improvements in our overall business performance in the ensuing quarters. Driven by advancements in specialty Chemicals and Nutrition Health Solutions business segments. As well as through our continued efforts to manage the cost efficiently. In-line with recent quarters our primary focus remains on leveraging newly commissioned plants and enhancing operational efficiency to deliver improved sequential performance in Q4 of FY ’25. We are committed to our growth plans through our ambitious pinnacle 345 vision and we are on-track to achieve the same. So with this, now I hand it over to Deepak to discuss the business in detail. Thank you.
Deepak Jain — Chief Executive Officer and Managing Director
Thank you. Thank you, Mr Bharthia. A very good evening to all of you. At the outset, I would like to thank you all for joining us today for the Q3 FY ’25 investor call of Jubil Indreway Limited. Let me first take you through the overall market overview for the 3rd-quarter. Pharmaceuticals, during the quarter, we experienced steady demand with clear volume visibility across pharma and use segments with notable growth in derivatives and stable prices with some areas seeking — seeing an uptick. However, paracetamol demand remained under pressure as customers run their plants below optimal capacity. In the agrochemical sector, global inventory destocking issues are diminishing and demand is gradually returning with the full volume recovery expected in coming quarters. Volumes in products are also recovering and future expansion in select agrochemical products will further boost demand. In Nutrition, we observed significant year-on-year and quarter-on-quarter volume increases for colon though pricing remained muted due to competition. Volumes remained stable, while prices saw some uptick. With the newly commissioned CGM plant, we are poised to increase traction in-human food and cosmetic grade products. As you know, we have rolled-out several new initiatives in the last few quarters in-line with our Pinnacle 345 growth roadmap that we announced a few months back. Let me share some key highlights to demonstrate the progress. Number-one, our product platforms continue to drive growth and leadership in-quarter three. And experienced significant year-on-year volume growth, but with prices also rising across several segments. In neocineamide, we maintained our top two leadership position in-feed grade with year-on-year growth in volumes and an uptick in prices, showing both year-on-year and quarter-on-quarter growth. In cholin chloride, we maintained our number-one position in the dry chloride market and recovered market-share with both quarter-on-quarter and year-on-year growth in volumes. Number two, we have increased our revenue-share of the Specialty and Nutrition business in the portfolio to 62%, up from 59% last quarter and its EBITDA share in the overall portfolio has grown to 87%, up from 73% last quarter. Our and Fine Chemicals and microbial segments are showing strong year-on-year revenue growth. Growth areas like digetin continued to gain traction with stronger year-on-year growth. In the semiconductor end-use segment too, we sent more new samples to our customers in-quarter three. Number three, in, we observed year-on-year volume growth in non-acetic and hytide products like ethyl acetate and. This positive impact of volume increase was offset by a slight dip in acetic and hytide volumes. However, prices remained under pressure across all products. Despite the market challenges, we have retained our market-share in acettic and hydride market, while increased shares in both ethyl acetate and acetal segments. Number four, we are increasing our revenue mix in the US, EU and Japan and continuously investing in-building capabilities in these regions. During the quarter, we increased our international revenue-share to 45% compared to 34% in the same-period last year, achieving an exports revenue growth of 47% year-on-year. Our US revenue doubled on year-on-year basis, while EU and Japan revenue grew by 43% year-on-year, thanks to our structured key account management programs. To further scale-up our international business, we are expanding our BD teams across US, Europe and Japan. Number five, our key efficiency initiatives have delivered substantial annualized savings of over INR120 crores from surge, lean B and energy-saving programs. We are now launching Phase-2 of our cost program and we hope to achieve even higher efficiencies in coming quarters, thus improving our margins further. Number six, on the capex front, we have commissioned our neocinamide facility for food, nutrition and cosmetic applications, marking a significant milestone in our journey. Already being one of the world’s largest producers of neocinamide, we aim to become global leader in vitamin B3 as we ramp-up the utilization of this new plant. This positions us amongst the select few capable of producing high-quality vitamin V3 for high-value, high-margin offerings, providing a strategic moat against industry volatility in feed-grade. Also, the capex for upgrading the existing agrochemical plant has commenced. This investment is aimed at establishing a dedicated facility to fulfill the five-year agreement, which we signed last quarter with a multinational agro innovator, producing a key intermediate for one of their strategic agrochemicals. We anticipate beginning deliveries from this plant towards the end-of-the next financial year. Likewise, our existing multipurpose plant in Gajola is being readied to serve the second agrochemical order we announced in the last quarter. We expect both these orders to add significantly to our revenue growth in coming years in specialty chemicals business. In coming quarters, we also plan to announce the launch of more capex projects in-line with our long-term growth strategy. Number seven, on sustainability front two, our core initiatives remain on-track to keep our leadership position intact. As we announced earlier, we hope to move more than 30% of our power requirements to renewables in FY ’26, which will not only contribute significantly to the reduction of Scope 2 emissions, but also reduce our power costs in coming quarters. Likewise, we have taken several other green initiatives, which will help have significant impact both environmentally and commercially. Let me now take you through the updates on all of our three businesses individually. Starting with Specialty Chemicals. During the quarter, the Specialty Chemicals segment revenue grew 28% year-on-year and 8% quarter-on-quarter basis on account of higher volumes coming from and portfolios. During the quarter, Specialty Chemicals achieved its highest-ever EBITDA of INR121 crore in a given quarter and also highest EBITDA margin of 26% in the last 14 quarters. EBITDA for Specialty Chemicals grew by 120% on year-on-year basis. Improvement in EBITDA was also witnessed on account of cost efficiencies gained from initiatives focused on enhancing productivity, yield, reducing energy costs through lean initiatives. The CDMO business continued to grow with capital expenditure initiated for the two contracts we talked about earlier. We also witnessed a growing number of inbound inquiries from the agro, pharma and semiconductor sectors. The high-margin fine chemical business volumes increased year-on-year and quarter-on-quarter with volumes rising significantly with improved pricing. In the Nutrition business, during the quarter, revenue for the business increased by 25% year-on-year, driven by higher sales volumes coming from and products. EBITDA for the quarter increased by 44% on a year-on-year basis, primarily due to higher year-on-year volumes and prices of neocinamide. On quarter-on-quarter basis, EBITDA remained stable due to the positive impact of neocinamide and volumes, but impact of higher neocinamide prices got offset slightly by dip in colon realizations. We witnessed increased neocinamide sales volume and pricing on year-on-year basis and marginal price increase of a quarter-on-quarter basis. We also observed improved demand for food gate products with both year-on-year and quarter-on-quarter growth. For products, volumes were strong both quarter-on-quarter and year-on-year basis, whereas pricing remained under pressure. With our new CGMP plant getting commissioned, we expect our revenue and margins to increase in coming quarters on the back of increased volumes of food and cosmetic grade vitamin B3. Our food grade colon chloride and products have started to get good traction in the market and we expect their volumes to grow in coming quarters. In Chemical Intermediates business, quarterly revenue and EBITDA declined due to continuing headwinds from the primary end-use markets for paracetamol impacting both volumes and pricing of and hydride. During the quarter, higher year-on-year and quarter-on-quarter volumes of ethyl acetate partly cushioned the impact of declining acettic and annitride volumes. We have taken a few strategic measures to counter the downward impact in this segment such as a higher share of domestic sales of acetic annitride to mitigate the impact of increased logistics costs associated with export sales. Secondly, improvement in our cost structure for key products. And thirdly, renewed push on non-acetic and high-tight portfolio in this segment such as acetate and acet LDI. With this, let me now hand over to Varun to discuss the overall financials of the company.
Varun Gupta — President and Chief Financial Officer
Thanks, Deepak. A very good evening to all of you. I would like to thank you all for joining us today for the quarter three of financial ’25 investor call of Jubilant Ingraveya Limited. The overall revenue during the quarter stood at INR1,057 crores as against INR966 crores in-quarter three financial year ’24. The revenue was higher mainly due to the higher year-over-year revenue from Specialty Chemicals and Nutrition and Health segments solutions business segments. The EBITDA for the quarter was INR148 crores, reflecting a 9% sequential increase and 42% rise on a year-on-year basis. The growth in EBITDA was primarily driven by margin improvements in the specialty chemicals a better mix along with the cost optimization initiatives. The net-debt of the company as on 31st December ’24 was INR684 crores and net debt-to-EBITDA ratio was 1.36 times on the basis of trailing-12 months EBITDA. During the quarter, we also optimized the overall finance cost and reduced it through combination of strategic initiatives. The capital expenditure incurred during the quarter was INR92 crores and YTD in the first-nine months is INR299 crores, which was primarily funded through internal accruals. Net working capital percentage to turnover for quarter three was at lower at 18.4% against 22% in the same year — in the last year same quarter. Number of days of working capital has reduced to 67 as against 80 days in-quarter three financial year ’24. Lastly, the PAT for the quarter was INR69 crores as against INR39 crores in-quarter three financial year ’24, witnessing an increase of 80% on year-on-year basis. Before we conclude our opening remarks, I would like to inform you that the company is organizing its Investor and Analyst Day in Mumbai on February 28, 2025. On behalf of the entire management team of Jubilant Ingravey Limited, I would like to invite you all to join us at the event. This will be an opportunity for you to meet in-person, interact with the entire leadership team of Jubilant Ingraveya Limited, where we will showcase organization’s future plans and highlight the key growth levers for the coming years. We will now be happy to address any questions that you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press R&1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press RN2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press R&1 to ask a question. The first question is from the line of from Equirus. Please go-ahead.
Siddharth Gadekar
Hi, sir, good evening. Sir, the first question is regarding the Specialty chemical business margin. So given the sharp improvement that we have seen in this quarter, how should we look at it on an annual basis because maybe this quarter there was some favorable product mix towards higher-value products. On an entire full-year basis, how should we think about the specialty chemical margins for FY ’25 and going ahead?
Deepak Jain
Yeah, Siddar, thank you. It’s a good question. As — so a few things I would say. Number-one, as we have been saying in the previous quarters as well, specialty chemical business is something which we have been continuously focusing on and there are multiple drivers which are helping us improve the overall growth as well as mix of the business. So like I said in my opening remarks also, the portfolio, of course, continues to do well on the back of the additional volumes we have gotten, which helps us in improving the efficiency and improve the cost structure. At the same time, the portfolio has started to grow and the utilization levels are growing and we are getting high-margin products there. And of course, we have the CDMO business, which is a high-margin business for us. So what happened in the last quarter was all three conversed and led to the kind of margin that we have delivered. Having said that, now obviously, last quarter was also a quarter where both and beta prices were on the higher side, which we understand and appreciate will or not remain at the same level all through the years and hence there will be some volatility. Even if I adjust for that, our expectation is that our specialty business should remain at least at 23% to 24% EBITDA margin versus the 26% that we have given in the last quarter. That is our expectation for steady-state.
Siddharth Gadekar
Okay. Sir, secondly, in the Chemical intermediate business, was there any inventory losses because our EBIT has come at INR9 crores, which is at a historic low levels?
Deepak Jain
No, there is no inventory loss, but unfortunately, that business is going through very tough times. And like the way I talked about, a bunch of positive forces on specialty. On chemical intermediates, there are a lot of negative forces. So what has happened is the biggest application of acetic anhydride is paracetamol in Indian market where we have almost 70%, 80% share. So paracetamol is going through tough times with almost 20% 25% lower volumes versus last year. Secondly, even internationally, Europe is a big market for us. And I think most of us know what’s happening in Europe. The growth has come down and as a result, we are losing some volumes there as well. Thirdly, the Red Sea crisis did not make life any easier with the higher logistics costs, the level of competitiveness and profitability both went down. And on-top of that, in the last quarter exchange rate also worked against us, both on US dollar and Europe. We import our raw materials for chemical intermediate business in US dollar, while export in euros to Europe. And both of those forces worked against us. So a combination of all those factors led to the lower-margin that you saw in the last quarter. And what we expect at this moment is that these forces are continuing at least for this quarter and then for perhaps another quarter or so. But gradually we expect the inventory that is there in the paracetamol market will clear up and volumes will start to come back. Agro, another use-case or application for anhydride will start to gradually show some uptick and then Europe hopefully will start showing growth as well. So — and then exchange rate has already started to normalize. As these forces — negative forces reverse one-by-one, we are hopeful that in the next couple of quarters, we will start to see at least some uptick from where we are in acetyl business.
Siddharth Gadekar
Okay. Okay, got it. Sir, secondly, on this new vitamin B3 capacity, can you just talk about the realization difference between animal feed and the new grades of vitamin that we are looking to launch? And what would be the margin differential between these two grades?
Deepak Jain
See, see the cosmetic grade and food grade neocinamide and the product is there and we sell it even today from our existing plant, there is reasonable delta. Of course, I can’t give the precise numbers, but you can — you can assume the delta could be even up to 40% to 50% sometimes in the pricing. And obviously, there are incremental costs associated with that as well. But at an overall level, cosmetic and food grade products are higher-margin for us — significantly higher-margin for us versus what the feed grade is. Margin is just one part of it, Siddharth, but I think what it also does is as I think most of you know, there is more volatility in the feed grade product. The cosmetic and food grade products are more stable with secular growth in the demand and volumes. So it also brings more stability to our overall nutrition portfolio. And thirdly, it also gives us access to human-grade customers, which is a segment as I have announced in the previous quarters also, we are anyway focusing on with more-and-more products coming in the human — human-grade side.
Siddharth Gadekar
Yeah. So our mix used to be more tilted towards animal feed, like we had 70% 75% of our revenue is coming from animal feed. Now one or two years down the line, how should this mix look in the nutrition business?
Deepak Jain
In terms of volume, we hope that a human and cosmetic grade will get to at least 35% 40% and in terms of value, it will be much higher than that because these are high-value products.
Siddharth Gadekar
Sir, just one last question on the CDMO contract. So can you just give some color in terms of how should we think about the margin profile on the CDMO business mainly for those two contracts and by FY ’27, will we see a full ramp-up in both the contracts?
Deepak Jain
So the two contracts we announced in the last quarter are both agro contracts. So the CDMO margins for good products and also for us, as I think I have repeatedly said on several calls every quarter, we — our threshold is to get at least 20% plus EBITDA and 20% plus ROCE. Both those contracts will give us returns in-line with those internal benchmarks. And of course, we continue to work on the cost structure to see if we can get anything better. But those are more stable long-term contracts and we are hoping that they will overall help us increase the profitability of the business.
Siddharth Gadekar
And just lastly on the semiconductor side, have you seen any of more traction in terms of like are we close to make any announcements or it is still some time away
Deepak Jain
See, semiconductor, as I mentioned, it’s a — it’s a — it’s a journey we have taken only about 10 months back. We have gotten good traction. We have almost eight to 10 different products and RFPs, which we have been discussing with customers. On a few of them, we have sent the samples. We — we are hoping to get our first commercial order in FY ’26. But as I said in the past, because semiconductor chemicals are new to India and of course to us as well. Our customers will be slightly — slightly cautious in the beginning and will give only small volumes. And we expect that starting FY ’26, we will have a separate P&L for that business with commercial orders coming in and gradually we can ramp it up. But we’re looking at semiconductor as more of at least three-year journey in which we scale it up rather than getting any big bank opportunities in the near-future.
Operator
Thank you very much. So that’s to interrupt you. Can I request to come back?
Siddharth Gadekar
Yeah, I’m done. I’m good.
Operator
Thank you. Next question is from the line of Gaurav from Invesco. Please go-ahead.
Gaurav
Thanks for giving me an opportunity. I hope I’m audible.
Deepak Jain
Yeah.
Gaurav
Yeah. Thank you. So my first question is like a.
Operator
Got a sorry to interrupt. Your voice is coming in. Can you speak a little louder, please? I’m through the handset if I’m in request?
Gaurav
Yeah, I’m using handset. Is it better now? Is it better? Yeah, yeah. So we have seen consistent improvement in the numbers, EBITDA margin and all those things, right? So if you can help us understand that in the last one year, since we have announced this 345 journey, the capex that we have done, right, the agro plant in January 2024, the derivative plant, I think in March 2024, what would be the kind of utilization of those plants in these numbers, capacity — installed capacity versus capacity utilization? Any clarity on that, please?
Deepak Jain
Yeah, sure, Gaurav. So not just a couple of plants you talked about if you just go back 18 or 24 months now, I think there are at least five or six plants which we have commissioned. For most of them, we have reached at least 50% utilization levels. The agrochemical plant, of course, as I mentioned, I think on the last call also, we started the production, but then we got this big contract. So we are repurposing that plant and doing the modifications in that to be ready-to-serve that big contract by — by end of this calendar year or end of this next fiscal year, latest. But outside of that, all the other plants we put up are running at least 50% utilization levels.
Gaurav
That’s great. So building on this question only, just for an understanding purpose also considering long-term investment in the company. When we put up money in a capex that — then what do we expect in terms of the asset turnover ratio? Like for example, I think in last two, three years, we have invested substantial amount in the capex. So what would be the asset turnover ratio, like for example, INR1,000 crores or INR1,500 crores invested, then it can give us revenue of maybe whatever x number that you and has asset turnover ratio? Thank you very much. That’s the last question for you.
Deepak Jain
In steady-state, we expect specialty turnover to be at least 1.3x to 1.5 times and for our acetyl business in the range of 1.8x 2 times. Having said that and then most of the planning as well as deployment of this capex has been done keeping those kind of asset turnover in mind. Having said that, in the last 18 to 24 months as I think at least in 18 months and most of you know that, there has been reduction in prices across most segments. So obviously, what it has done is at least these ratios have come down slightly in that context. And how we are offsetting that part is by improving our cost structure, which is what I just announced in both Lean One and Lean 2.0 and obviously, in certain segments, as I mentioned, we can already see pricing coming back. So a combination of these two things will hopefully take us back to the original ratios on which the whole planning was done.
Gaurav
Thanks or thanks a lot for all this clarity. One request, maybe if you can take it up and if you allow. But in the numbers that we report in the presentation specifically, if we don’t mention the capacity in terms of installed volume vis-a-vis the utilization. Is there any specific reason that we do not disclose, but we disclose the segment-wise revenue for sure, right, but not the installed capacity or against that the capacity utilization. And any specific reason of not reporting that?
Varun Gupta
Yeah. Varun here. See these are sensitive information, which is PV and material from the organization point-of-view. And detailing the capacity and the utilization is something very confidential and we’ll continue not to publish it.
Deepak Jain
Yeah. And just to add to Varun. The second thing is, see, you have to appreciate that many of our plants are multipurpose plants. So depending on which product we are producing at what what point in time, the capacity is quite fungible as well as dynamic. So for both these reasons, I think it’s — it’s very difficult for us to disclose that information.
Gaurav
Sure. Thanks a lot. I will come back-in queue. Thanks.
Operator
Thank you. Next question is from the line of Tarang from Old Rich Capital. Please go-ahead.
Tarang Agrawal
Hi, good evening and congrats on a strong set of numbers. Couple of questions. One on your Specialty Chemicals business. You know, what drove the growth of this — I mean which segment, which business segment drove the growth for Q3 of FY ’25?
Deepak Jain
Yeah. So Sarang, as I was saying in the beginning in response to the first question also, our specialty chemical business is a combination of three things, and its derivatives, and its derivatives and the CDMO business. So luckily for us, right now, all three are doing very well and all three are growing both in terms of volumes and in some pockets, we have seen the price increase as well. So there’s no particular factor, but it’s a combination of all those forces which will get to the growth.
Tarang Agrawal
Let me rephrase. I mean how much was pharmaceuticals as a percentage of your spec chem revenue in Q3 of FY ’24 and how much is it in Q3 of FY ’25?
Deepak Jain
See, I think I won’t give you the specific percentage, but your question is still pertinent. Pharma, as even Mr Bhatia said in the beginning, pharma segment is doing well and has been growing for us as well. Now at an overall portfolio level, pharma is roughly 30% to 35% of our business and same will translate into specialty chemicals as well. But what is happening is because in — across our portfolio, be it derivatives or derivatives and even CDMO products. We are — we have been focusing on pharma over the last couple of years. Gradually the level of penetration and share are both increasing and that is one of the key drivers. Having said that, we also have other sectors which we serve through our specialty Chemical division, the agrochemical, of course, where we have signed and announced these two big contracts, cosmetics and industrials as well. So the traction is across-the-board. Of course, in the last 18 months because pharma has been doing well, the overall share of pharma should have increased in specialty.
Tarang Agrawal
Got it. And one on bookkeeping. Sir, if I look at your segmental operating profitability, right, the EBITDA number that you published in your press release, there’s almost a INR25 crores to INR30 crore difference on a quarterly basis versus the operating EBITDA that gets published on the P&L. My sense is these are common costs. So would it from our modeling, right. So from our modeling perspective, is it fair to presume? Is it fair for us to consider a INR30 crores to INR35 crore number on a quarterly basis? And what would be the nature of these costs?
Deepak Jain
No, only. So Varun, you want to
Varun Gupta
I have Varun here, Tarant. The number is in the range of INR20 per quarter, which has unallocable to any specific and these are the corporate resources, which serve across all the three division — our segments.
Deepak Jain
Yeah. So I think Taran, so that number — and I think somebody had asked that question last quarter also, you can expect it to be around INR20 crore plus-minus. And we are of course, controlling it very tightly. For your modeling perspective, I’ll leave it to you how you want to allocate, but revenue-share will be probably the right methodology because that’s how at least we split over-time across the businesses.
Tarang Agrawal
Got it. And last, in your chemical intermediates business, I think the commentary on volumes has been strong across acetic, ethyl acetate and acetyl. I mean, this business, I think was at a INR50 crore quarterly operational profit number and obviously there are headwinds in the end-markets. But just to get a context of how — what is the price — I mean, how is the pricing environment in this business at the end of your products? And would INR50 crores to INR60 crores be a good baseline number of profitability to work with on a quarterly basis?
Deepak Jain
See, these are relatively commodity products, acety anhydride, ethyl acetate, acetylide, these are the three big products that we do in that segment. We have a couple of more products like propionic anhydride and others. These are volume — volume products. So that’s why the focus as well as commentary so much on the volumes, Tarang. The pricing in these segments is a combination of several factors, right? One is obviously the input raw materials. So for acetic and hydride as an example, what price acetic acid is trading at, that plays a critical role, but also the demand and supply dynamic in the end segments plays a very big role. For instance, as I said in the beginning, acetic anhydride right now, the pharmaceutical segment is going through tough times, the demand is 25% less and suddenly there is oversupply of aceric anhydride and hence it puts pressure on the pricing. So it’s from both sides from raw-material direction perspective as well as from the End-User or end application segment perspective. Right now, the prices are very low, of course, and they are putting pressure on our contribution margin as well. That’s the reality. And as I said in my opening remarks as well, we hope in next couple of quarters, gradually as demand comes back, we will see an uplift in both volumes and contribution margin. Now to your second question on what the baseline EBITDA should be in this business. What I can tell you is, we look at this business from a multiyear perspective. And if I look at the last 10 years, we have made good margins in this portfolio, which have averaged at around 10% plus/minus. And then I don’t see that changing going-forward as well and that will come with a combination of demand coming back as well as the continuing to improve our cost structure.
Tarang Agrawal
Sure. Just last, I mean, the current spreads would be what, 30% 40% away from what the normal spreads in this business are generally?
Deepak Jain
Current EBITDA margin you’re talking about?
Tarang Agrawal
Spreads, spreads contribution.
Deepak Jain
You mean contribution? No, sorry, I can’t give that number, but if I wish I were making 30% 40% contribution margin in this business, our numbers would have been much higher at an overall level.
Rohit Nagraj
Okay, sure. Thank you
Operator
Thank you very much. I request to all the participants kindly restrict to two questions per participant. The next question is from the line of Rohit Nagraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Thanks for the opportunity and congrats on good set of numbers. First question is on the food grade, given that we have recently commissioned the plant for food as well as cosmetic grade. From a human consumption perspective, do we need any USFD approvals? And just a little bit on the market for human-grade in terms of the opportunity size, whether it’s a domestic or international market and who will be the current competitors in the global market? And how do we foresee to expand this particular portfolio maybe over the next three to five years? Thank you. Lot of questions inside, but if you could give probably…
Deepak Jain
Good. Rohit, let me just try to address them one-by-one. So first of all, to your question on US-FDA, I think you might remember we got US-FDA approval on our plant last year and the new facility is an extension of the existing facility. So technically speaking, the plant is already USFD approved. Having said that, of course, as we start the production and send the product to different markets, we do expect at some point in time, there will be another round of USFDA. I’m hoping it will be at least couple of years away, but the plant has been created and constructed with all the practices that we demonstrated last year when we got 0483 in our existing plant as well. So we are — we’re not worried about it. Even if it happens, it’s just a milestone and we’ll get done with it. Number two, in terms of the demand, it’s a global product. So the market is also global. There are customers in India as well for their India business as well as their international business. So we hope to serve both domestic markets and international markets. In fact, there will be more — there should be more volumes internationally than in domestic market, but there are customers in India as well who will be using the product to produce their end-products and send them outside of India as well. Third, in terms of what kind of demand we can expect, this plant is about 4,500, 5,000 tonnes between cosmetic grade and food grade and has the fungibility to produce both kinds of products products depending on what demand we are seeing at any given point, we will keep the plant production planning dynamic. But the expectation is and given the strong traction we are getting from the customers. And as I said in the beginning, we are already selling some of these products from our existing plants also. So we already have access to the customers and we are talking to some of the big customers. Our hope is that we will fill-up the capacity of this plant in next 12 to 18 months once it has stabilized. I hope I’ve answered all the questions you asked.
Rohit Nagraj
Yes, sir. And just one last clarification. In terms of competition, are there any global players who are currently serving this market?
Deepak Jain
Yeah. So I think there are global players in the three segments. It’s the same set of competitors we compete against for feed as well. So — but we have taken share, right? In-feed grade, we are number two globally. And our aspiration is with now this food and cosmetic grade coming in there also we become a leading player globally and improve our market-share.
Rohit Nagraj
Perfect. That’s very helpful. Second question is on the CDMO contract, which we have signed, the $300 million, you gave a lot of information last — during the last call. Just from last call to now, in terms of the project milestones and maybe towards the end of commercialization by end of FY ’25, what could be the milestones that we are looking at? So have we done the product in the R&D pilot stage and we are just waiting for the plant to get ready and approved? And just one consequent question to that. In terms of the $300 million of total opportunity size, will it be linearly spread over a five-year period or probably it will be relatively lower in the first couple of years and then rest of the years it will be linear. Thank you.
Deepak Jain
Yeah. So Rohit, I had talked about both these last quarter. First, the correction, it’s not end of FY ’25, it is end of FY ’26 commissioning. So we expect to commission it by December or January timeframe. Now coming to your question on how we are doing on the milestones. So I’m happy to tell and it’s there in my opening remarks as well. The plant is on-track. We are — we are tracking it very tightly given the quantum of this contract and the importance of it both for our customer and for ourselves on a weekly basis. It’s absolutely on-track. There is no division and we are meeting all the milestones which we had defined till month four of this project since the start of signing. Number two, in terms of the revenue trajectory, it’s a — it’s a contract in which from month one, we are expected to hit certain rate, but within first few months itself, we are expected to get to the steady-state revenue trajectory. So it’s not a linear trajectory, except for the first few months when which we will need to stabilize and stabilize the plant as well as capacity, it should start firing at the expected annualized run-rate within the first year.
Rohit Nagraj
Fair enough. That’s it from my side. All the best and thank you.
Deepak Jain
Thank you.
Operator
Thank you. Next question is from Pratik from Mandan. Please go-ahead.
Unidentified Participant
Yeah, hi. Sir, just one small question. Could you call-out the cost-savings from 2.0, the Lean 2.0? I think lean 2.1 was around INR120 crores if I’m not wrong. Could you call-out what kind of savings can we expect?
Varun Gupta
Okay
Unidentified Participant
Hello.
Varun Gupta
Hi, Varun here. So yes, Lean 2.0 will be, of course, more than Lean 1.0 savings where we have, say, more than 100 in the first round. Second round will be at least double-digit higher than the second —
Deepak Jain
Than the first one.
Unidentified Participant
So when you say double-digit, you mean growth on that 120 or whatever. And do you wish to retain this or in terms of or let’s say, pass-on for more business or reinvest for more opportunities? How should I think about this?
Deepak Jain
What do you think,? What do you think is the answer to the question?
Unidentified Participant
I think you should reinvest in the business and grow the business more.
Deepak Jain
Absolutely right. You answered it.
Unidentified Participant
Okay.
Varun Gupta
I guess you will see more of it in 20 years when you will come and visit. Yeah,
Unidentified Participant
Looking-forward.
Varun Gupta
So all these questions will be answered visibly and that on the 28th in our Investor Analyst Day. So I’ll humbly request you guys to hold this till the next three weeks finger cross and we should be able to answer it much more depth on that day.
Unidentified Participant
Got it. And if I may squeeze in one small question. I think this question was asked. It was basically the spreads on the intermediary business. How far are they today from the mean? And I’m just trying to get a sense of the profitability, right, because look, you called out that Q4 is better than Q3 in the initial remarks as well as in the press release. And in the same breath, you also said that you are not seeing the — you’re not seeing any improvement in the Chemical intermediately business, which means that we see further strengthening in the other two businesses. So I’m just trying to understand from a, let’s say, next three, four quarters perspective, when do we see normalization of this business coming back given that you have a multi-decorative view?
Deepak Jain
Pratik, I don’t know where you picked-up that Q4 is better. I think in my view, Q4 is very similar to Q3 for this — I’m talking about chemical intermediates business
Unidentified Participant
Only because overall. Yeah, yeah, that’s correct. Yeah, yeah.
Deepak Jain
Right? So chemical intermediates, I would say will take at least couple of quarters for paracetamol problems to get behind us as well as some of the cost initiatives we are working on and hopefully some growth coming back-in Europe. For rest of the business, yes, of course, we continue to improve. As you can see the last four quarters trajectory. Our cost initiatives now lean 2.2 that you asked, all of that incrementally should keep adding to the overall portfolio performance.
Unidentified Participant
And in that case, is there a — I mean, maybe this is a question for February 28th and I’ll ask it at that point of time. Thanks, Deepak. All the best.
Deepak Jain
Thank you. Thank you, Prade.
Operator
Thank you. Next question is from the line of Gakul Maheshwari from Mauriza Capital Advisors. Please go-ahead.
Gokul Maheshwari
Yeah. Thank you for the opportunity. So you’ve taken — mentioned about cost measurements which you’ve taken in the chemical intermediaries business. So can you sort of explain whether you are now cost comparative versus your peers are within — in India or also in terms in the region, are you the lowest-cost producer for this product?
Deepak Jain
Say Gookul, and I don’t know whether you cover the commodity products or not more broadly. There is nothing called best-in-class in commodity chemicals because it’s a dynamic thing. I like the way we are working on our cost structure continuously, I’m sure our competitors are doing the same. Having said that, we, of course, have a very competitive cost structure. That’s the reason why we have been able to build almost 70% to 80% market-share in Indian market and almost 15% to 20% market-share in Europe. Despite the fact, particularly if I take Europe as an example, we import some of the raw materials, process them and send back into Europe, right? So logistics in a — in a commodity business can play a huge role in normal times despite doing all of that in the supply-chain, we have been able to compete and gain market-share in Europe. So yes, the short answer is we — we are one of the lowest-cost producers, whether we have the lowest-cost or not, that depends on what point of time you’re talking — talking about. In and hydride, definitely there are bunch of initiatives we are doing across the conversion cost. In fact, the lighthouse award we got from WEF has — the acetic and hytide plant was one of the plants which was covered in that assessment and some of the digital usage, automation, supply-chain optimization and a bunch of other things that we are doing has helped us in keeping the cost structure low. We are replicating the same across all of our products, including the ones which are there in acetyle business or chemical intermediates business.
Gokul Maheshwari
On your power cost for the nine months, that power and fuel cost has come down from INR404 crores to INR359 crores. Is this — is this — what is the reason for this drop-in power cost?
Deepak Jain
Yes, of course, there has been a bunch of initiative our operations team has been driving on the power cost. And what I can assure you and with the announcements we have already done of moving to renewable, that will only come down further from here and that’s part of Lean 2.2.
Gokul Maheshwari
Okay, great. Just lastly a data point, what would be the expected capex plan for FY ’25 and ’26?
Deepak Jain
See, ’25 we have already announced in the beginning and that’s a continuation of the original INR2,000 crore that we had announced almost three years back now. So we are on-track and by end of FY ’25, we will be more or less at par with the INR2,000 crore number we had envisaged a couple of months here and there. For FY ’26, we are going through the planning process and the budgeting process, which we will have clarity on by March-end. So at that time, we can tell. But as I have said, at the time of announcing our Pinnacle 345 strategy also, we do have intention to invest further in the — in the plants as well as other areas of our business given the growth aspirations we have. So we’ll more or less continue with the similar kind of run-rate capex year-on-year as we have done in the last three years. Ideally, the exact numbers will work-out and come back.
Gokul Maheshwari
Great, great. Thank you and all the best.
Deepak Jain
Thank you.
Operator
Thank you very much. Next question is from the line of Resham Jain from DSP Asset Managers. Please go-ahead.
Resham Jain
Hi, good evening and congratulations on good sequential improvement. So I have two questions. First one is on pyridine and its derivatives. Last year, we saw like globally Jubilant being the only one except Chinese player producing pyridine and its derivatives. Is the status same currently and because of the same, initially, I think there was an assumption that some of the customers might have built a higher inventory, because they were aware that some of the capacities were going out of production and all. But are you seeing any advantage of that coming in?
Deepak Jain
Yeah. Hi, Risham. Good question. And the short answer is yes. The inventory was built only for the first-six months. The plant closed down in September — in the US, the US when I’m talking about in September of 2023. We started seeing traction on or OEMs volumes in FY ’25 itself, I am — I think I have said that in the previous quarters and we maintained that we were hoping to get almost 70% plus of the incremental volumes, which Watlas was serving from that plant and we have achieved that objective. So — and that is reflected in the volume increase in our trading business as well. So now we are hoping even the second plant will close-down, which we are hearing will happen in 2025. Once that happens, we hope to get more. But there is some uncertainty associated with that right now on the timeline
Resham Jain
Understood. And the second one is on the front, I think you did remarkably well. I think you have 5,000 ton capacity right now in terms of its derivatives. Given that you must be utilizing fully and the margins are also relatively much better, are you planning to further expand capacity of Teen and its derivatives?
Deepak Jain
Yes. The answer to this question is also yes,. We have as you know, we have — we’ve expanded in two phases so-far. The Phase-1 products were done almost two years back, Phase-2 was launched last year. I think for both phases, we are running the plant at a reasonably high-capacity. Of course, there is some variation quarter-on-quarter based on when the products are used in their end applications. But by and large speaking, it’s tracking in the right direction. And with some of the commitments we have gotten for our Phase-2 products in recent months, we are in fact thinking about debottlenecking those plants and already increasing the capacity. That’s one. And second, as I have said in the past, there is a Phase-3 also planned for products for which our team is working on the capex proposal, which we hope to get approved in coming months and start the commissioning — start the construction of those plants.
Resham Jain
Understood. Okay. Thank you. That’s it. All the best.
Deepak Jain
Thank you.
Operator
Thank you. Next question is from the line of Nitesh from Dolat Capital. Please go-ahead,
Nitesh Dhoot
Hi. Hi, team. Thank you for the opportunity. So sir, as you elaborated that in case of specialty chemicals in Q3, there was a product mix improvement in favor of derivatives, plus there was a price improvement and also an increase in the derivatives revenue. So all put together, there was an increase in revenue by around INR35 crores. So by any chance, is there a sequential decline in the volume of the building block? And if yes, what would be the reason behind this in?
Deepak Jain
You mean previous quarter or future quarters you’re talking about?
Nitesh Dhoot
No, I’m just comparing Q3 with Q2. So there is a sequential INR35 crore increase in revenue and the reasons that you elaborated increase in revenue from the derivatives and from and some bit of price improvement. So I’m just wondering if there was an — there was a decline sequentially in the volume of the building block.
Deepak Jain
I see we have almost — well, you mean the base periodine you’re talking about?
Nitesh Dhoot
Yes, yes, yes, yes.
Deepak Jain
See the volumes, we are running our plants almost at full capacity. So there could be marginal ups and downs because of, let’s say, dispatch issues or production issues. But directionally, I’m telling you like we are — in fact, we took a capex to debottleneck capacity because we want more because of the reasons that asked. We are getting traction. We are the only non-Chinese scale players left in the world. So all the incremental and beta demand or demand is coming to us. So we are running our plant at full capacity. There could be marginal ups and downs, but there is no secular decline, so to say, in the demand or volumes of our building blocks in and beta value chain.
Nitesh Dhoot
All right. All right. And sir, just one more question. So now that we’ve reached high utilizations in dietine, how much is it contributing to the total revenue? I mean, say INR470 crores of total spectrum revenue in Q3, what would be the contribution of the equity and derivatives there? And secondly, what are the margins that we are making there? I mean, you’re not able to give the exact numbers there, I’m sure, but whether it’s higher or lower than the Q3 overall spec chem margins
Deepak Jain
The diketin is still a growing portfolio in our business. So you rightly said it, we don’t disclose the specific numbers, but it is a meaningful part of our specialty chemical overall business. Of course, you have to keep in mind that we have been doing pyridine and its derivative for 30 years. So that takes lion’s share today, but — and started only two years back. So it will require at least a few years to have something which is reasonably big, but it is moving in the right direction. And as I said, at least the plants we have created are running at reasonably high-capacity. In terms of margin profile, I think the answer is similar. It’s tracking in the right direction and is like if the overall margin is 26% for that segment, then cannot be very low. So you have to look at it from that perspective. But overall, we are tracking well and in steady-state, which we hope to receive — achieve very soon in, it should have — the margins which is the specialty segment should have, which is at least 20% plus.
Nitesh Dhoot
All right. So just one last, if I may. I think I missed this point on the new capacity. So how do we see the ramp-up happening over there and in the context that, I mean how would be the product approval cycles given that it’s a food grade again? So how much time do we see or how much time would we need to ramp this capacity up to full utilizations?
Deepak Jain
See the plant has just commissioned last week and we are hoping within next few months or couple of months, it will stabilize and will start from a production perspective, we’ll take care of all the teening issues. From a demand perspective, as I said, we are already in touch with most of our customers. The approval process was started almost six months back based because we were doing some of these products already. So none of that will come in the way of selling the product. Obviously, still it takes some time to fill-up the capacity and that’s what I said early-on. We expect to fill-up the capacity in 12 to 18 months.
Nitesh Dhoot
Perfect, sir. Thanks a lot and all the best.
Deepak Jain
Thank you thank you.
Operator
Thank you very much. I now hand the conference over to Mr Taneja for closing comments.
Pavleen Taneja
We thank you all for joining this call today. We hope we have been able to answer your queries. For further clarification, I would request you to get-in touch with me separately. And thank you once again for your interest in Jubilin Ingravey Limited. Have a good day.
Deepak Jain
Thank you. Thank you, everyone.
Varun Gupta
Thanks everyone.
Operator
Thank you very much. On behalf of Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.