Laxmi Organic Industries Ltd (NSE: LXCHEM) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Rajan Venkatesh — Managing Director & Chief Executive Officer
Mahadeo Karnik — Chief Financial Officer
Analysts:
Unidentified Participant
Tanay Shah — Analyst
Jainam Ghelani — Analyst
Rohit Nagraj — Analyst
Ankur Periwal — Analyst
Harshil Sethia — Analyst
Nitesh Dutt — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected to Lakshmi Organic Industries Limited. Please stay connected. The call will begin shortly. Ladies and gentlemen, good day and welcome to the Q3 and 9M FY26 earnings conference call of Lakshmi Organic Industries Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please please note that this conference is being recorded from the management we have with us Dr.
Rajan Venkatesh, MD and CEO and Mr. Mahadev Karnik, CFO. We will now begin the call with remarks from the management team followed by a question and answer session. Before we begin, I would like to point out that this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantee of the future performance of the company and involves risk and uncertainties that are difficult to predict. I now hand the call over to Dr.
Rajan Venkatesh, MD and CEO. Thank you and over to you sir.
Rajan Venkatesh — Managing Director & Chief Executive Officer
Thank you. Very good morning, good evening and good afternoon Namaskaram. From my side to wherever and whichever time zone you’re dialing in from to set the context again like I’ve usually done in the past, I would like to give just spend a small amount of time on what is the global macro, on the global chemical industry focus then on the trends, demand trend signals we are seeing from our key customer industries that we serve. Give you a bit of a glimpse about how the feedstocks have developed at least the key primary feedstocks that we tend to employ and and that impacts us and then give you a quick insight into how our performance has evolved into quarter three projects, key projects, how that is progressing and also in this time really focus on the self help measures that we continue to work ourselves upon in the current backdrop and also give you a quick update on our Lotte facility.
So let me start with the global chemical industry. Not surprisingly that continues to be challenging and what you see is clearly continued efforts in the global landscape towards cost optimization shutdowns, restructuring of subscale and non competitive assets and rerouting of supply chain links to the continuously evolving tariff situation that we are all grappling with. That being said, I would say in the past months and weeks the recent announced shutdowns in certain parts of the world, in this case Europe and specific measures in China in accordance with their anti involution policy reflect that actions are being taken to improve the situation.
The recently signed eu, India FTA upon actualization, because we all understand there is a certain time between that should also, at least in our lens, be a positive catalyst Coming to the Demand Signals Demand signals from key industry segments that we serve Packaging, inks and adhesives remain stable on a quarter on quarter basis. If you look at agrochemicals it remained moderate. On paints and coatings it continued to be weak to moderate because we serve a global customer base there, and on pharmaceuticals it remains stable. One of the key feedstocks and in this case acetic acid.
While many feedstocks have seen a deflationary price trend over the last quarters and in fact also over the last one or two years, calling out acetic acid, which is a key building block for us, over the calendar years of 2024 and 2025, acetic acid prices have dropped by greater than 20% only in December we are noticing this trend positively reversing and as you can imagine, while we are positively thrilled about it, but we are also monitoring this very granularly for our specialty business. If you look into our quarter three performance while maintaining market share, financials on a year on year basis continue to be impacted by three levers.
One is a market price moderation. This is something we have called out also in the past. I gave you an example of acetic acid as one key I would say example one time campaign product. This is link and this is what you will hear a little bit more about. This was the one time campaign product that we did in quarter three of the last financial year, which certainly did not repeat into this financial year. And as previously we had highlighted the agro product face out for which we were supplying an important intermediate in the essentials part of our basket.
The spread for our key product ethyl acetate continued to be subdued and our current focus in the essential segment remains achieving volume driven profitable growth both in the specialties and also essentials. Moving into quarter four and also into the next financial year, new capacities are coming up. So obviously as you can imagine, a core focus from our side would be really getting into a hunting mode with close proximity to many of our customers because that is the call of the hour at our Dahij facility which is the single largest capex that Lakshmi has embarked onto.
As we had called out in the past, the phase one is already online, we are already supplying customers from that and the project remains especially for the phase two on course and our priority remains bringing the phase two, completing it by the end of quarter four. The Fluoro intermediates operation at Rote remain on track and we are I think in a good space to achieve what we have called out in the past in our first year of operations from our LOTI setup. We continue as I said on self help measures. This is very very important given the continuing landscape backdrop on the chemical industry by focusing on productivity.
This is something we started quite some time back and that is again something we continue to focus upon. Commercial excellence, execution excellence. This is also driven by executing these projects that we have laid out the CAPEX for in time, within budget and within scope, cost discipline and needless to say, last but not the least but sometimes the most important part the new growth projects and focusing on the new product development and the cycle especially for our specialty part of the vertical. We also affirmed that our LOTTE facility operates in compliance with all applicable Indian requirements and there has been no discharge of hazardous effluence into the environment where we operate.
We remain steadfast in our commitment to transparency and continue to actively engage with all relevant stakeholders. Again, that being said, our Fluoro intermediates operation and route remains on track and we continue to operate that. So with that I will hand it over to my dear friend Madhav who will take us through how the financials have evolved.
Mahadeo Karnik — Chief Financial Officer
Thank you Rajan. So good afternoon all. I’m taking you through now slide by slide. I’m currently on page 22. So if you look at our revenues for the quarter have decreased by nearly 9% quarter on quarter versus previous year. Our EBITDA is at nearly 50 crores which is 33% downfall versus previous year. And and our PAT is at 25 crores versus 29.3 in previous year. Key highlight to this is three things. Continuing pressure in the sprays of ethyl acetates. There is a product mix difference between essential and specialty. This time because of the decline in specialty business the percentage has gone down.
And also from this quarter we will see the impact of incremental cost of Lotte as well as part of the DH facilities going up. So that comes in our P and L. These results also include one time gain which we have called it out specifically from our notes in the published accounts for favorable litigation settlement for billing and transmission charges of 407 million as the labor codes were also announced in November. So we have taken a provision of 38 million for the same. And there is ongoing supply chain redesign project which has costed us nearly 9 million.
So these are the one timers that we have. If you look at essential business, the revenue has declined by 6%. But the volume remains same. Mainly this revenue is impacted by the acetic acid feedstock prices. In case of specialty, the revenue has declined by 30%. As Rajan called out, there is a price moderation which is causing 12% one time campaign product in FY25 which caused around a decline of nearly 5 to 6%. And phase out of agrochemical intermediate which is around 10%. So these are the key components of the decline for specialty. If you look at our cost components, our employee cost is at 46 crore versus previous year of 34 crores.
In previous year of 34 crore mainly there was a reversal of ESOP of nearly 4 crores. And also it has the impact of additional headcounts at low tier and age of 4 crores. And also it has an impact of annual increments. But if you look at the other expenses line there is the decline by nearly 5 crores. Mainly on account of freight management and all other expenses to be in control. So overall our adjusted EBITDA is at 14 crores. There is a one time gain of 36 crore. Which again I want to reiterate is that there is a reversal from operations for the billing charges and transmission losses on account of the supreme court favorable order of 407 million.
And offset by the employee cost due to one time labor cost, labor code cost which is 38 million and other expenses for cost of supply chain of 9 million. So that’s it from my side. Tanay, over to you.
Tanay Shah — Analyst
We can start the Q and A session.
Questions and Answers:
operator
Okay, thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of JNM Gilani from Swan Investments. Please go ahead.
Jainam Ghelani
Hi sir. Thank you for this opportunity. My first question is mainly on the ethyl acetate spreads. So what are they currently and how do we foresee them going in Q4 as well as FY27. FY27.
Rajan Venkatesh
So again thank you for the question, Renam. So first is let me start with acetic acid because that’s the key. I would say mover and shaker when you talk about ethyl acetate. Spreads right while ethyl acetate spreads apart from acetic acid also got ethanol as the key raw material going into that product. The acetic acid is where the root cause I would say stemmed from. And as I called it out in my opening remarks, acetic acid has dropped almost more than 20% over the last two years. And we saw acetic acid prices sort of on the lower end in the last few months which actually plateaued I would say at about $323 $30.
And since then we have certainly seen that this has been seems to be, I would say a floor on the basis of which some of the key producers that are serving the Indian market from China and also ASEAN have proactively taken certain capacity offline but also have chosen to improve the price points both domestically and also into the Indian market. So as we speak now, acetic acid prices have rebounded. We are close to and that’s what we are seeing in December. They are closer to the 360, 370, 380 levels. But that being said, you also have Chinese New Year coming around the corner.
So post Chinese New Year you will also see capacities coming back online. So we anticipate that we do not expect to go back to the pain points that these producers experienced in the past. And somewhere it will be the new reality will be between what we experienced between now, between the 330 to the 380 is what we anticipate. As you can then also imagine the spreads of ethyl acetate because on the back of feedstocks has also improved. And where we were really at a pain points of 90 to $100 over acetic acid and ethanol, we are now inching towards the $130 range.
Jainam Ghelani
Does that mean that the worse in terms of acetic acid is behind us and from Q4 onwards we should see improvement in the profitability on the essential price.
Rajan Venkatesh
What this implies certainly is price points of 320, 330 for acetic acid was not sustainable for the producers. And here I am talking about leading producers like the likes of ineos, Shanghai, Hawaii and also Celanese. So that seems to be the key takeaway at this point of time. So we are certainly expecting things to be not going back to that level now, whether it remains at 370, 380 or moderates lower to the midpoint of 350, 360 post Chinese New Year is something we need to diligently monitor.
Jainam Ghelani
And sir, I think in Q4 you mentioned that our Bahej Phase 2 should come online. So almost 1000 crores of capex should be over. So how do we see that ramping up over FY27, FY28?
Rajan Venkatesh
So the Haish like we have also called out in the past was done in two phases. The phase one was already operational in the end of quarter two, quarter three and that ramp up is happening as we speak. But the big chunk, and again don’t forget that the H capex is a 710 crore capex. It’s not a thousand crore. 710 crores and a big chunk of the diketene ketene verbund and the downstream derivatives will get mechanical completions will happen towards the end of quarter four. So FY27 would be the first year you will have also a sampling period because a big chunk of that capex, these are Dike 18 derivatives.
These are specialty in nature. There is also a product of anhydride that we are going to produce there. So all of this require customer qualification. So FY27 will be the first year of qualification plus ramp up. And FY28 is where we will try to further fast track the ramp up.
Jainam Ghelani
Okay, okay. Okay. So we can expect basically revenues from H2, FY27 from the Diketen space.
Rajan Venkatesh
If we are able to get all the qualifications done. I think that should be. That is the focus that we are working towards.
Jainam Ghelani
Okay. And so in the third quarter our specialty segment just saw 12% to 13% EBITDA margins. So how do we see that recovering over the year? And other than the phase out of the product, what was the reason for the drop?
Rajan Venkatesh
The specialty. So again, can you just repeat your question?
Jainam Ghelani
No.
Rajan Venkatesh
Can you just repeat your question please?
Jainam Ghelani
So in the specialty segment we saw ebitda margins of 12 to 13% in Q3. So other than the agro product that phased out, what was the reason for the drop and when do we see the margins to recover to almost 20 to 22% which was our earlier. Outcome.
Rajan Venkatesh
So as we explained also you know, if you first and foremost we have put a slide which goes to show what has been our journey in the specialties and specifically the daiki teams. We came in where we started with about FY17. We were at about 250 crores and we today we closed out last financial year at close to 950 crores. Even if you see in the last few years we have actually delivered EBITDA in the range of 20 to 25% in our specialty basket, which is primarily daikin the trigger for us to invest in the capex at the hedge and to double our capability was that we were already maxed out with our capacity at our existing sites.
We have the largest portfolio in the Daiktein space globally and we are serving a varied range of industries and we believe we have a good cost position to build upon that. So that was the first thesis of which we have done. What we saw this year happening was what we have called out also in the past. We had one product which was almost 10% contributing 10% of our revenues, which was the intermediate going into the agro space that got phased out. In fact, in the discussion with that customer, they were anticipating that still to continue, but that did not manifest into this financial year.
The second lens, what we have also called out is when you have feedstocks and it is not only acetic acid, if you speak to multiple even aromatics value chain, you have seen feedstocks dropping double digit. So even while you are selling specialties and positioning specialties, I think one cannot simply wish away that you will not have an impact on product pricing. So that is the lens where we are and clearly the chug rate remains as we are also ramping up. And again, don’t forget that we also have our Lotte facility that has come online and that Lotte facility primarily is linked to our specialty portfolio on fluorination.
So you also have the cost and all the capitalization and cost coming in from there. So those have been the factors. Our focus still remains the same that we want. We have a clear right to win into our Dikey 10 derivatives space. And once the HIJ facility is up and running, we will leverage both Mahat plus the H and ramp this up into 2027 as I just explained, and moving more important to 2028 and beyond. That is the way we view it. And that is where also gradually we will see the improvements into the basket.
Jainam Ghelani
So is it safe to say that Q3 was one of the worst quarters that was and all the problems are gone.
Rajan Venkatesh
At this point of time? I think we will have to navigate it. Quarter on quarter chemicals is challenging. I do not want to wish that away. At least on the upstream feedstock lens we certainly see that things seem to be rebounding, but I would still take it quarter on quarter.
Jainam Ghelani
So do we see any improvement in Q4 as of now in our performance?
Rajan Venkatesh
I would take it quarter on quarter. As I said, we have already. I have already shared very transparently with you the movements that we have seen in our essentials basket and Then we will need to move accordingly.
Jainam Ghelani
Okay, that’s from my side. Thank you. Thank you.
operator
Thank you. Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and one on a Touchstone telephone. The next question comes from the line of Rohit Nagaraj from 361 Capital. Please go ahead.
Rohit Nagraj
Thanks for the opportunity. Two questions, one company specific. During this quarter did we see any secondary impact from the US tariffs? Given that some of the intermediates that we supply to the domestic players who are manufacturing and selling the final product to the US market. So was there any impact or was there any such situation which we faced? If you can just give a broader picture on the same. Thank you.
Rajan Venkatesh
So Rohit, as we have shared in the previous call, Lakshmi’s exposure to the US market is only 10% of our top line revenues. That is 300 crores of that 300 crores. Only about 10% of that was truly impacted by the tariff topics. So it is not as material. But certainly our customers whom we supply their products then potentially are also impacted. So yes, there is, I would say at a company level, not a direct large material impact. But if you talk about the value chain, there is a certain impact.
Rohit Nagraj
Sure, but it’s not material to quantify or to hurt us significantly or it hasn’t hurt us significantly during pre Q.
Rajan Venkatesh
No, that has not been the material impact into quarter three. The U.S. part has not been the material impact.
Rohit Nagraj
Right. Thanks. Second general question, given that you’ve also worked in Europe earlier, so I mean given the EU FTA that we have signed recently, in terms of the domestic India, you know, imports tariffs to the US to the EU has been about 30%. But on the contrary, the EU tariffs, import tariffs towards India were 22%. So there is a differential in terms of the duty structure. So will this have any material impact in terms of higher material flowing from EU to India or just a perspective in terms of the quality of material which is coming from EU to India and the material which is going from India to a broader perspective would be.
Thank you,
Rajan Venkatesh
Rohit. I think it will all depend on value chain. So for example, if we talk about value chains which are linked to natural gas in some form, I think as what is public information out there, certainly natural gas in Europe is 4x or 3x of that. What is cost competitively in North America? So for them to move products like example methanol, ammonia into India, I see that as difficult. Now in specialties there could be opportunities. In my thesis, I would say with also the Restructuring that is happening broadly now in the European chemical industry. I would see more opportunities of Indian companies actually exporting into Europe.
That’s the way I would view it from this point of time, Rohit.
Rohit Nagraj
But is it safe to assume that the products which are coming from Europe to India, either they are kind of proprietary, patented or super specialty products and there are not no material manufacturers in the domestic market due to which this flow has been there. So there will not be any material impact on the industry, as you rightly pointed out. In terms of the more opportunities coming through the fta.
Rajan Venkatesh
Again you see, India remains a net import even if you look at all key building blocks, be it propylene oxide, be it mdi, tdi. So I would say those would be some of the commodities that could come in. But I would more focus on the specialty part where certainly Europe still has a right to win in certain of these value chains. So it’s going to be really in my lens, to summarize this, a very value chain approach where Europe certainly continues to have a right to win. And same way again from an India lens, where India then has a right to win.
Rohit Nagraj
Perfect. That explains. Thanks a lot and all the best. Thanks a lot and all the best.
Rajan Venkatesh
Thank you.
operator
Thank you. Thank you. A reminder to all participants, request your questions to two per participant. For more questions, please rejoin the queue. The next question comes from the line of Ankur Periwa from Access Bank. Please go ahead.
Ankur Periwal
Thanks for the opportunity. I hope I’m audible. The voice is equal to just double checking. Okay. Yeah, okay. So the first question on the essentials part, now you rightly mentioned, you know. The pricing decline in acetic acid and the resultant contraction in spreads. Just wanted to understand two things here. One, from a volume growth perspective, do we have adequate capacity, surplus capacity now to ramp up. Or how should one look at it?
Rajan Venkatesh
Ankur, like we have also said in the past, we were running our assets broadly at significant high operation rates, both on the essential side and also the specialty sides. And that was one of the triggers that we chose to expand our footprint. So if you remember from the previous claims that we have made, we basically announced the establishment of a world scale ethyl acetate facility that would come up in our Lotus site. And that is what we are diligently working towards. Our phase one, which has started up at the hedge, is one of our essentials product.
So from our existing capacity we are fully utilized and it is going to be really the growth coming from the newer capacity which is going to move the needle positively. Our Operational excellence journey that we started in 2023 actually yielded significant double digit output from our existing asset base in Mahad with limited to no capex. But you know, you can only juice that out so much.
Ankur Periwal
Sure. And this is a 70,000 ton capacity that you are referring to, if I’m not wrong. And by when do we expect, let’s say a full ramp up of this capacity? Historically we have seen a quicker ramp up whenever there has been a capacity addition. But given the macro. What are you talking about?
Rajan Venkatesh
So again sir, if you look at our essentials basket, 70% of our essentials business primarily is in domestic. And while we all talk about the macro for chemicals globally, India in that sense still is a positive outlier because you do continue to see demand growth in India, whereas in other geographies that is certainly not the case. So given that has been our pivot in the essential side, I think we remain confident and also with the cost position that we are establishing that we will diligently move that into once the asset is ready into FY27, we will diligently move that into the market.
Ankur Periwal
And on the pricing you expect it to largely stable between 322 to 370, $380.
Rajan Venkatesh
You are referring to acetic acid, Is it acetic acid?
Ankur Periwal
Yes sir.
Rajan Venkatesh
Yeah. So acetic acid again I wish we knew everything, how things would evolve. If I have to take a sidestep, who expected gold to move the way it did. But that being said, what seems to be clearly evident is the price levels where acetic acid drop to in the last weeks and months of close to 32330 certainly do not seem to be sustainable for the acetic acid producers. And that is where my expectation is. At least in the short to midterm it might not come back to that levels. That being said, other things could play.
But from today’s perspective that is where we expect somewhere between upward of 314 to that 360, 370 level is where it might float.
Ankur Periwal
Sure, that’s helpful. Secondly, on the specialty intermediate part, last year we were around 9.5 billion INR of revenues. This time, you know, on YTD basis we are up to 5.6, 5.71. What is the breakup between the petrochemical business and the. And second, while pricing is one part which we highlighted in terms of decline, how has been the volumetric growth or degrowth here on nine months?
Rajan Venkatesh
So let me take the first element, the fluorination. Our focus was to be closer to about the 70 to 80 crores of top line. And I think we are chugging towards closer to be in that range. So that’s the first positive thing because that’s been an area which has been of heightened force focus for us to establish that setup and actually deliver revenues and profitability from that setup. That’s the first part to your answer to your question, Ankur. When we look at the specialty base, what one needs to rebate certainly is the fact that close to about 10% of that 950 crores that we clocked in the last financial year was just shy of 10% is what was attributed from the agro intermediate which was phased out.
So you need to baseline that at least for this financial year versus the previous financial year. And coupled with the element of the fact that you’ve had the moderation on the feed stocks, on volumes. If you look at the diketaine for Bund, we continue to be well utilized because the way we steer that portfolio it is not unlikely. And unlike an essentials where you have acetic acid and ethyl acetate in the specialty basket, this diketene as a starting raw material and then we have a plethora of downstream products that we can leverage that into with the asset based flexibility that we have in our grid at Mahad.
And that will also be established at the H.
Ankur Periwal
Sure. So given that.
operator
Mr. Perryman, we request you that you return the question queue for the follow up question. Thank you. The next question comes from the line of Harshal Satya from Singularity AMC please.
Harshil Sethia
Hi sir. The acidic I said price is moving up is because of the trade rebates which has been removed in China.
Rajan Venkatesh
No, no Harshil, no, that has got nothing to do with the trade rebates. That was done for certain of the agro products not on acetic acid.
Harshil Sethia
Okay, so secondly, you said that there was a molecule ramp up which was going to start from Q3 in the specialty segment. So what is the update over there?
Rajan Venkatesh
No, what we had called out Herschel in the past is the product that the agro product that got phased out for which we were supplying the intermediate, that we had already a backup plan for that and that product basically is in the qualification phase and we will see sales from that manifesting in quarter four. But obviously that is going to be the first quarter and then the ramp up would happen into FY27. As we have also explained in the past, it is not a one to one substitute in volumes or profitability. But that is what we have referred to in the Past Harshil, if that is what you are alluding towards.
Harshil Sethia
Okay. And sir, lastly this new product will be from our.
Rajan Venkatesh
Sorry, can you just repeat the question? Harsha,
Harshil Sethia
the new product will be from Mahad or Dahesh.
Rajan Venkatesh
So this would be from our Mahad setup because as we said, right? So where we were producing the previous product, we had already mapped out alternatives because we knew eventually it would happen. And so we were looking at. We already had mapped out alternatives so it would be at our Mahat setup.
Harshil Sethia
Okay, thanks.
operator
Thank you. The next question comes from the line of Nitesh Dud from Hana Zati Institute. Please go ahead. Please go ahead.
Nitesh Dutt
Good afternoon. Just to check on your comments on the anti involution and the likely Chinese shutdowns. So almost 5 million tons of acetic acid capacity is getting added over 26, 28 period. So while recently there has been an uptick on the acidic acid prices, given some maintenance, shutdowns, etc. But what is your thought of the overall medium term supply demand dynamic?
Rajan Venkatesh
So nitesh supply demand dynamic continues to be long. What we are observing at is again typically what you would see in a commodity business is where are you on a cost curve. So at the price point that acetic acid reached, which was close to the 320, $330, you could certainly see that most producers were struggling to make money. And hence you had some of the major multinational producers in Asia taking shutdowns or extending their shutdowns to that effect. You had also some of the Chinese capacity which was going offline. So while yes, on the capacity supply demand dynamics it is long, but at these price points you are also seeing it is not sustainable to operate despite the fact you have capacity.
Nitesh Dutt
Sure. So my second question is on the dicotine derivatives. So how much is the spend there on the Capex at the age for dicotine? I mean if you could just give us some sense of whether you would be doubling your capacity or anything on that side and you know, how is the business expected to grow there? So you know, any contracts that we might be having on this side, any visibility that might be having good share.
Rajan Venkatesh
So Nitesh as we have shared in the past of the 710 crores for the Dahij capex, close to 65% is dedicated to the specialties, which in this case is the diketene and diketein derivatives. So that is your first part of the question with the diketene business. I think that remains something which is close to our heart. That is Something we understand very, very well. And that is where we have decided consciously to expand our footprint. As we have also discussed in the past, with the current capacity expansions globally, we will be number three. We already today have the largest portfolio, 50 plus products of Dike 18 derivatives in our portfolio.
And to sort of conclude there are already ongoing, we have had recent wins and there are also ongoing conversations with customers. Needless to say, customers are also viewing us positively because we become very uniquely positioned that we are the only fully integrated supplier from India or even globally to that extent to a certain level across two sites.
Nitesh Dutt
Sure. Thanks for this. Just one last if I may squeeze in on the. On the fluorocam project we had indicated that you know we would be doing close to about 84 stop line in FY26. So any sense of, you know, where, where we would be on, you know in the nine month period, there.
Rajan Venkatesh
We are, we are on track on that one nitesh. And that, that, that is what is continuing to give us confidence as we move across.
Nitesh Dutt
Great sir, thanks a lot for answering all my questions and all the best.
Rajan Venkatesh
Thank you.
operator
Thank you. The next question comes from the line of Chetan Doshi, an individual investor. Please go ahead. Please go ahead.
Unidentified Participant
Thank you very much for giving me the chance. So first question is that in the result you have mentioned that depreciation is there is a change in the method of calculation. So need to say that there is a actual loss of 2,2 million if you incorrect as per the near method. And second question is regarding the Hitchachi joint venture. There is no mention in the presentation as to what is happening on that project.
Mahadeo Karnik
So let me clarify on depreciation first. So we were at WDV method of depreciation up to last year and when we benchmarked across the industry we see that all our peers are at, you know, straight line method. So we adopted that method. So there is definitely an impact to the extent what we have mentioned in the financials. So I will ask Rajan to so.
Rajan Venkatesh
On the Hitachi topic, Chetan, I think we remain excited and we remain on track. So no new news to share beyond what we have shared in the previous con call and we remain on track. Now we are more in the execution mode and again just to clarify, it is not a joint venture. Basically Hitachi becomes our lead partner. We the IP and know how is owned by Lakshmi and that is the way to view this. And it is not an exclusive relationship. It is not exclusive. No, it is not exclusive.
Unidentified Participant
One last question is that you have mentioned that first phase of DAGH is already we have started the operations. So what is the current volume? What we have done in this last quarter from Dahash.
Rajan Venkatesh
So the Dahaj investment chetan is linked to a multi year contract that we have with one of our customers who have also established they are downstream product in the hedge. So our ramp up is in sync with theirs. So they are also in a ramp up phase. So I think it’s still early days but we have already got qualified and we have already started supplying them.
Unidentified Participant
So what is the volume?
Rajan Venkatesh
I would like to keep that confidential at this point of time because it is also impacting how our customer is being viewed. So please respect that us on that. Topic,
Unidentified Participant
how much you expect in the next quarter?
Rajan Venkatesh
No, this is again it’s a multi year contract and this is again the entire CAPEX is on the base of a clear contractual take or pay analysis that has been established in close collaboration with our customers. I would not break it down into quarters, kindly would seek your understanding on that.
Unidentified Participant
Thank you. Thank you very much.
operator
Thank you. As there are no further questions from the participants I now hand the conference over to the management for closing comments. Thank you. And over to you sir.
Rajan Venkatesh
Thank you all for investing your valuable time for the con call today. So let me conclude by the following. Chemical industry like we spoke about continues to be challenging but we are seeing signs some early green shoots which is impacting I would say structurally how things are evolving globally in the chemical space and also some of the key actions taken by China. Key industries that we serve continue to I would be stable to a moderate to growth mode that is positive for us with the new capacities coming. While we have seen continued deflationary impacts on key raw materials, in certain cases we are seeing that pivoting positively.
So we will need to see how sustainable that remains both our businesses. Clearly our strategy is in place, projects are coming on track, on time and within budget. Our fluorination setup also remains on track. We are focusing continuously on our self help measures, focusing on productivity, commercial excellence, execution excellence, cost discipline and growth projects. And last but not the least, we like to reaffirm again that our Lotte facility operates in compliance with all applicable Indian requirements and there has been no discharge to the environment. And we remain steadfast in our commitment to transparency and continue to actively engage with all relevant stakeholders.
And to conclude, while this year and quarter remain challenging, as Team Lakshmi we remained committed to geared to win and geared for growth. I am deeply grateful to all members of Team Lakshmi and its stakeholders for their continued engagement. Thank you all. Have a wonderful day ahead.
operator
Thank you. On behalf of Organic Industries Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your line. Thank you.