Navin Fluorine International Limited (NSE: NAVINFLUOR) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Irfan Raeen
Vishad P. Mafatlal — Executive Chairman of the Board
Partha Roychowdhury — Chief Executive Officer
Nitin G. Kulkarni — Executive Director
Anish P. Ganatra — Chief Financial Officer
Analysts:
Unidentified Participant
Sanjay J — Analyst
Jason Soans — Analyst
Rohit Nagraj — Analyst
Ankur Periwal — Analyst
Krishan Parwani — Analyst
Nilesh Ghuge — Analyst
Arun Prasad — Analyst
Abhijit Akella — Analyst
Meet Vora — Analyst
Siddharth Kerkar — Analyst
Surya Narayan Patra — Analyst
Bhaskar Chakraborty — Analyst
Presentation:
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Ladies and gentlemen, good day and welcome to the Navin Florian International Limited Q1FY26 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 the conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Irfan rang from MUFG. In time ir. Thank you. And over to you sir.
Irfan Raeen
Thank you. Viren. Welcome to Q1FY26 earnings conference call of Naveen. Today on the call we have with us Mr. Vishad Mufatlal. Chairman, Mr. Nitin Kulkarni. Managing Director, Mr. Nitin. Mr. Anish Ganatra, Chief Financial Officer of Navin Florin International Limited. This call may contain forward looking statements about the company which are completely based upon beliefs, opinion and expectations. As of today, actual results may differ materially. These statements are not the guarantee of our future performance and involve risk and uncertainties that are difficult to predict. Our detailed safe harbor statement is given on the page number two of investor presentation of the company which is uploaded on stock exchanges and on company’s website.
With this I now hand over the call to Mr. Vishad Mufatlal for his opening remark. Over to you sir. Thank you.
Vishad P. Mafatlal — Executive Chairman of the Board
Good evening. Good evening ladies and gentlemen and welcome to Naveen Florine’s Q1FY26 earnings call. I am joined today by our MD Nitin Kulkarni, our CFO Anish Dhanasa and Ms. Payal Dawe from MUFG. In time, our Investment Relations advisor. It gives me great pleasure to share with you all that we have delivered yet another good quarter. A strong reflection of our strategic focus. FY26 commenced on an optimistic note marked by a successful completion of our 750 crore QIP. We are delighted to share that the offering received a positive response from investors. We extend our sincere gratitude to all participants for placing their trust in us and providing the capital to fuel our future growth.
In Q1FY26 our revenue rose by 39% to 725 crores. Operating EBITDA more than doubled reaching 207 crores. An increase of 106%. Our net profit grew by 129% coming in at 117 crores on a year. On year basis all three of our business divisions reported robust growth in Q1FY26. Setting a strong tone for the fiscal year ahead. With a solid order book in place, we remain optimistic about sustained momentum in the coming quarters in the HPP segment. We are happy to share that our R32 project was successfully commercialized in March 25 and is running at optimal capacities given the accelerating global demand for R32.
We are firming up our plans with international partners to further capitalize on this opportunity. Meanwhile, our AHF project continues to advance steadily with completion target for the end of Q2 FY26. As mentioned earlier, we have an exclusive tie up with Boost Chemtech Switzerland as a technology partner to commercialize our electronic grade HF in the specialty chemical segment. We are set to deliver supplies for three new molecules in Q2 FY26. Additionally, our fluoro Specialty project in Dahij which was launched in December 24 is expected to deliver a meaningful contribution this year. We have also announced a strategic partnership with Chemoz to manufacture their proprietary product option A two phase immersion cooling fluid project execution is already underway in our CDMO division.
The order book continues to show strong momentum. Our CGMP4 facility phase one expansion is progressing as planned with commercialization expected in Q3 FY26. The expansion initiatives across all three segments reflect our commitment to enhancing value, additional targeting, high margin opportunities and diversifying into emerging high growth sectors. We will continue to deepen our relationships with customers and suppliers while developing new relationships across different geographies and business verticals. Thank you once again for joining us today. With that, I would like to now hand over to Nitin to provide an update of our operating and business performance.
Nitin G. Kulkarni — Executive Director
Thank you Vishadde and good evening to everyone. We are pleased to share that our team delivered good results last quarter. Our priorities for FY 2526 also include the successful commissioning of AHS and CGMP4 projects, ramp up of recently commercialized assets, expansion of our specialty and CDMO portfolio and driving margin optimization through operational excellence. Let me brief you on the progress we have made in each vertical. Growth of revenue in HPP segment is driven by both increased demand and improved price realizations. The pricing landscape for refrigeration gases remains flat firm. The capacity we commercialize for R32 in March 2025 is at an optimal utilization.
Our HFO business is continue to operate as per our expectations. Our exclusive tie up with Boost Chemtech AG for high purity electronic grade HF is progressing well. We are making inroads through greater engagements with customers so as to access electronic grade market globally. Our specialty chemical division is operated at an optimal utilization level in the last quarter and for the coming quarter of the year too we have order visibility. In the last quarter we mentioned we had received validation from our Global partners for two fluoro intermediates for their new innovative AI in FY26. The initial supplies will commence in quarter two FY26.
Apart from this, we also expect supplies for one more fluoro molecule which will be delivered in the next quarter as well. Our CDMO division delivered good results last quarter. We have strong revenue visibility backed by robust order book for FY26. Further US and Europe regulatory approval for label extension of the molecule under the European MSA is very encouraging. We also received scale up order for another late stage molecule with EU Pharma major for Supply in Quarter 2 FY26. Looking ahead, we will be capitalizing on our robust relationship with global pharma innovators and we will continue to build a strong pipeline of early and listed molecules and leverage on our state of the art CGMP infrastructure and R and D capability.
We continue to invest in people and capability across all the verticals to further enhance our technology platform and manufacturing infrastructure. As we progress in in the next phase of growth, we shall remain focused on strengthening our existing verticals, expand our product portfolio and executing capital investment judiciously. On this note I would like to hand over to Anish to brief you on financial performance.
Anish P. Ganatra — Chief Financial Officer
Thank you Nitin Good evening all and.
Anish P. Ganatra — Chief Financial Officer
I welcome you all once again on the earnings call. Before we turn to our financial results, here’s a Brief on the July 25th QIT we raised 750 crore by allocating 162564 equity shares to qualified institutional buyers at 4680 each. The overwhelming subscription underscores strong investor confidence in Naveen Trolling’s business model. The proceeds from this fundraising will be deployed towards strengthening our balance sheet. Let me now walk you through our consolidated performance for the quarter ended 30 June 2025. We have recorded a revenue of 725 crores for the quarter reflecting a strong year on year growth of 39%.
Operating EBITDA for Q1FY26 was 207 crores with a growth of 106% compared to the same quarter last year. The operating EBITDA margin stood at a solid 28.5%, a growth of 935 basis points versus Q1 of last year. Operating CBP for the quarter was 141 crore reporting an increase of 143% profit after tax to that 117 crore in Q1FY26 compared to 51 crore in Q1FY25 registering an impressive growth of 129%. Operating cash flows for Q1FY26 is 231 crores. And net debt to equity stood at 0.34x refund rates. With that I would like to request if the call can open for any questions or interactions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of Sanjay J from ICICI Securities. Please go ahead.
Sanjay J
Yeah. Good evening sir. Thanks for taking my question. I got few of them. First on the R32. Vishad Bhai mentioned in the opening remark that we are in discussion with few international partners to extend the capacity. Now if I go by the quota determination formula given our R22 capacity around 10,000 metric tonnes and whatever we have sold during quota determination period of 24 to 26 it appears that we can go up to 26,27,000 metric ton or probably a little more than that. Are we looking to harness the entire opportunity Given that there is a strong demand for the product and the pricing much firmer than what we thought.
Anish P. Ganatra
Sangesh, you want me to take that.
Anish P. Ganatra
One by one or you want me to sort of.
Anish P. Ganatra
You want to finish your questions and then I can answer.
Sanjay J
Okay then I’ll ask the question. So that’s on the R32. Second on the Nectar performance. Again we mentioned that we are expecting a significant ramp up in the revenue this quarter. Have we received the PO and can you qualify that? Is it the 300 crore what we were expecting from the anchor customer going to deliver and that involves both the product or we are talking only the single product that’s on the nectar Third on the Capex plan. You Anisha, last quarter you mentioned that you would talk about more about Capex plan. We did mention 500 to 600 crore.
Now that we also have a cash on the book which I thought we would look more to expand aggressively. Can you share more on the capex plan for FY26 and 27? These are my questions.
Sanjay J
Thank you.
Anish P. Ganatra
Thanks Andres.
Anish P. Ganatra
So let me take this one by one.
Anish P. Ganatra
We are 32. Your workings are ballpark correct in terms of what numbers you have. I mean, will we be taking a right to our entitlement? I think the answer is a simple yes. The question is when will we do that? We will do that when we think.
Anish P. Ganatra
The discussions are more for with the large customers as we are making sure.
Anish P. Ganatra
That overall the product realization on the basket is in the interest of the company and to the interest of the shareholders.
Anish P. Ganatra
We feel that this is a product.
Anish P. Ganatra
To nurture and at the same time commercially manage the risks as we go into any expansion conversation.
Anish P. Ganatra
So that should answer your R32 question. Nectar. We have a firm order for the remainder period of the year and absolutely it will be ballpark in the number.
Anish P. Ganatra
That you talked about, give or take some points here or there.
Anish P. Ganatra
Right. But is it for a single product or both the products? I mean the question is the customer has actually asked us to prioritize the.
Anish P. Ganatra
New molecules earlier and as a result of that, as we speak now, we’re already under a modification process to make that product. So that will be our primary focus to deliver and we expect those deliveries to start within Q2 itself.
Sanjay J
Okay.
Anish P. Ganatra
And then as we come towards the end of the year, we go back to the original molecule. So it will deliver the, you know, what we have said, you know, half the part this year and part for next year.
Anish P. Ganatra
Yeah, that’s what we are on track for now.
Anish P. Ganatra
The CAPEX frame we had mentioned was.
Anish P. Ganatra
500 to 600 crores, as you rightly said with the fundraiser.
Anish P. Ganatra
I think it’s fair to assume that our CAPEX frame, and remember I’m Talking of the capex frame here, will be.
Anish P. Ganatra
Expanded to 700 to 1000 crores, which.
Anish P. Ganatra
Means that is my bandwidth to spend capex.
Anish P. Ganatra
Of course we will only do this for the right project, for the right value.
Anish P. Ganatra
So that is something that we are progressing in a very disciplined way. We have a couple of projects that we continue to mature and as time, as they mature to an investment decision, obviously we take it to the board and announce it to the market so that you have to be patient.
Sanjay J
And this 702,000 is what we are talking for FY26, right, Anisha? No, this is 26 and 27.
Anish P. Ganatra
I’m talking of a CAPEX statement as this is my. If you look at the financial framework, we talk about an impact to equity, we talk about what is the CAPEX rate. So this is to give you guys an indication that this is the kind of Capex Marine could undertake maintaining solid financial ratios while continuing to hold the strength and the flexibility in the balance sheet. But which projects I will not take in yet at this stage.
Sanjay J
No, no, that’s clear. We will wait for the board approval for more detail but this is helpful. Just one last question. We were talking of 25% margin guidance. We are at 28%. Do you want to re look at the guidance for FY26?
Anish P. Ganatra
So Sanjay, I don’t think there is a binary answer to that. But you know I think what might help us is to look at, you.
Anish P. Ganatra
Know we were in Q1 of FY25.
Anish P. Ganatra
At 19.5% and we are today at 28.5. So you’re talking roughly about 930 basis points is what we are talking about. If you look how that growth has come through, two thirds of that has come through operating leverage now and one third has come through pricing and environment.
Anish P. Ganatra
You know what one may call as that.
Anish P. Ganatra
Now obviously a lot of that contribution on the pricing side is coming from the strong R32 environment. For the ones that we are talking on out operating leverage and the efficiency that we are bringing into the system there is a lot of effort that.
Anish P. Ganatra
The team is continuing to do and.
Anish P. Ganatra
Will continue to do.
Anish P. Ganatra
We have always said that we will not leave any price on the table and the team will continue to work with said fast focus on manufacturing excellence, ensuring that assets are brought up in time, assets are operated to their optimal capacity and the cost saving focus continues.
Anish P. Ganatra
So while you know, I would say that, you know, I think there is reasonable confidence to say we’ll be north.
Anish P. Ganatra
Of 25, I don’t think we are at the stage where we would like to update the guidance today.
Anish P. Ganatra
Let this cement for a couple of.
Anish P. Ganatra
Quarters and then we can revisit this conversation.
Sanjay J
Got it. Danish, thanks for answering all those questions for patiently and best of luck for the coming quarters.
operator
Thank you. The next question is from the line of Jason Sones from IDBI Capital. Please go ahead.
Jason Soans
Yes sir. Thank you so much for taking my question. So just wanted to understand you know in terms of the actium recovery, last year was a pretty weak year for that and now just wanted your, you know, your take on how the recovery is taking place in terms of inventive rationalization. Is it done and you know, is it done what are the customers commentary? What are you hearing from the customers? Just wanted some color on that.
Anish P. Ganatra
So I think it is pretty consistent with what we always sort of communicated. See the inventory stacking issue is long gone. You know I think the Chinese intense.
Anish P. Ganatra
Competition which we’ve talked about before continues to remain pressure on pricing remains volume.
Anish P. Ganatra
Recovery in the second half we are definitely seeing that come through. You know in terms of the inquiries.
Anish P. Ganatra
And the fundraising, there is no doubt about that. We have a solid order book also.
Anish P. Ganatra
For the specialty of the ATM side. You know. But one has to remember this is.
Anish P. Ganatra
Not sort of, you know the conversation is not so much about hockey stick recovery. There will be slight recoveries on volume.
Anish P. Ganatra
And most of that could be eroded with pricing pressures. So it’s pretty much sort of flattish to slightly up kind of conversation we are talking about for Naveen. You should kind of see the way I would put it is we are bringing up the whole new capacity here.
Anish P. Ganatra
On the so you know Sanjay just asked a question on nectar and that.
Anish P. Ganatra
Itself is a Y on Y increase.
Anish P. Ganatra
If you start to think about the.
Anish P. Ganatra
Numbers for marine and that is protected under a long term contact order.
Sanjay J
Okay, sure. Thank you so much for that sir. And next question just pertains to the CDMO space where you basically target pharma. So just wanted to understand sir, when you’re targeting advanced intermediates there in the CDMO business, the grams business, so how do you target molecules? Which areas or which therapies are a forte Just wanted to understand from that sense like how do you target molecules to scale up.
Anish P. Ganatra
So the way you should look at our CVMO business is about capabilities and platforms and technological sort of it’s a service play that we are in that space.
Anish P. Ganatra
You know our strength comes from handling complex chemistries and complex synthesis. Right.
Anish P. Ganatra
In fact if you remember a couple.
Anish P. Ganatra
Of I think it was last year when we refined cdmo the vision engine has molecular the idea being that we can play across all the sort of innovator molecule compositions in this space. And then our focus here on growth has been quite sort of balanced. We’ve changed the strategy as we talked earlier also to balance late stage and commercial with early stage molecules. Right. And that is yielding very good positive results.
Anish P. Ganatra
And we turning on label extension is very, very encouraging.
Anish P. Ganatra
We already have a solid order book from FY26. In fact I could almost say for calendar year 26 and you know also the order for a new late stage molecule from a EU major is also.
Anish P. Ganatra
Working in the right direction from a strategic point of view. Simultaneously we are also working with a.
Anish P. Ganatra
New EU.
Anish P. Ganatra
For another molecule which is in the late stage commercial stage. Yeah.
Jason Soans
Okay. So overall outlook sir does look positive on the CDMO front.
Anish P. Ganatra
It looks positive. I think we have progressed towards the aspirational number that we said for FY27.
Jason Soans
Sure, sure sir. And so lastly just wanted to understand in terms of the ref gas of course you know pricing trajectory has been on an uptrend, you know QoQ probably it has been around 20% levels. So just. Sir, if you could give us some color on in the growth, you know how much is volume led, how much is pricing led? Would that be possible? Just some color on that.
Anish P. Ganatra
So I’ll tell you. You know typically for us being in the business, we don’t speculate.
Anish P. Ganatra
That we.
Anish P. Ganatra
Will play and make sure the product is placed for value wherever it is place. So whatever scenario we are operating in, our thinking will always be around the.
Anish P. Ganatra
Fact that, you know, make sure that you produce the product.
Anish P. Ganatra
There is a strong demand tailwind here.
Anish P. Ganatra
And the focus of the management is to ensure that on a basket level you place the product in different geographies aligned with the strategic priorities so that.
Anish P. Ganatra
Overall realizations are better you. But we don’t second guess on pricing. It’s too difficult.
Jason Soans
Okay sir, thanks.
Jason Soans
Thanks for taking my question.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to one or two per participant. Should you have a follow up question, we would request you to rejoin the queue. The next question is from the line of Rohit Nagaraj from BNK Securities. Please go ahead.
Rohit Nagraj
Thanks for the opportunity and congrats. A very strong set of numbers. So first question is on the specialty chemicals front. So last couple of quarters. The commentary is that at least the PPT we are optimally utilizing the bahej and capacity. And in your opening remarks you said that there is a strong demand momentum backed by firm pos. So. And we don’t have any material capex which is planned for this. So how these two things are gelling together that there is a demand that capacities are optimally utilized. So is there any incremental upside from the further optimization of these capacities or our period of execution will be shorter for any incremental capacity that we require based on the epos.
Thank you.
Anish P. Ganatra
So again last time we had talked.
Anish P. Ganatra
About saying that you know we are at 80, 85% of the capacity and that is more in context of the age. You know typically the way we operate.
Anish P. Ganatra
This business is we operate it looking.
Anish P. Ganatra
At our plans, both MPP plants in Bahid as well as in sewers and.
Anish P. Ganatra
Combine and optimize those in terms of.
Anish P. Ganatra
How we match it with products.
Anish P. Ganatra
Right. So is there an opportunity to grow from the baseline itself?
Anish P. Ganatra
Absolutely. This Quarter, if we look at it, the haze Is operated at 70% sort of, you know, and I’m talking this more in terms of par because I’m sure you understand, understand that from an.
Anish P. Ganatra
MPP point of view, every molecule has.
Anish P. Ganatra
A different life cycle, time, etc. So it’s difficult to give you one standard thing in terms of diets. But in terms of power, if you look at it, we’ve done about 70% at the Zahed plant. There is room to grow, no doubt about it.
Anish P. Ganatra
But also remember, when you look at.
Anish P. Ganatra
Marine again, I will re emphasize the fact that the growth coming in this.
Anish P. Ganatra
Year will also from the large solar.
Anish P. Ganatra
Specialty that we have put in which was the 540 odd crores of investment. You know, half of that power is going to be a new revenue coming in, materially coming in this year.
Rohit Nagraj
Right? Yes, yes, I got this. And just again on the second half of the 530crores project where we will have to find the new customers. So how are we progressing that? And.
Anish P. Ganatra
It’S already in play and we are reasonably confident of getting the full power by FY27.
Jason Soans
Perfect. That answers my question. All the best.
operator
Thank you. The next question is from the line of Ankur Periwal from Athrus Capital. Please go ahead.
Ankur Periwal
Yeah, I heard. Congratulations on strong set of numbers. I hope. I understand.
Anish P. Ganatra
Please go ahead.
Anish P. Ganatra
Yeah, we can hear you.
Ankur Periwal
Okay, so first question on the CapEx guidance that you shared around 700 to 1,000 crores on an annual basis. Just trying to understand a common end application perspective. Are we also including pharma here from an expansion perspective or is it largely specialty rep? And.
Anish P. Ganatra
Okay, so Ankur, as we said before, you know, we are also, apart from the three verticals, we are also incubating advanced materials. Right. So the CapEx, the CapEx allocation that we are talking about, we don’t do this by vertical, to be honest. We do it in a, you know, sort of a very disciplined way. You know, first that it has to align with our strategic plan. If you decided to play that in a product play or if we decided to enter in a new vertical, there.
Anish P. Ganatra
Will be preference to allocate Capex over there.
Anish P. Ganatra
Obviously the next thing are the economics in the commercials around this.
Anish P. Ganatra
Right. So we try to bring the best.
Anish P. Ganatra
From what is good for the company in the long term and for the shareholders in the long term. We don’t sort of free allocate the capex, which is the idea of giving.
Anish P. Ganatra
A capex way, you know, with the capex range is Agnostic. It is reflecting the strength of my balance sheet over the next couple of years that this is a range of capex I can sort of incur without having to worry about any intervention.
Ankur Periwal
Sure.
Ankur Periwal
And yeah, yeah, yeah, makes sense. So just a follow up on that from a. You know, you, you did mention Oracle planning to expand into electronic chemicals as well as the advanced material there. And when you say that this. Yeah, no, I’ll repeat.
Ankur Periwal
So you did mention of, you know.
Ankur Periwal
Expansion into electronic chemicals, advanced materials etc. Are there any active dialogues going on right now or these are more work in progress?
Anish P. Ganatra
Absolutely, absolutely.
Anish P. Ganatra
There is a lot of work happening in that space.
Anish P. Ganatra
You know, the exclusive arrangement we announced.
Anish P. Ganatra
With DCC in the last quarter was a step in that direction.
Anish P. Ganatra
The Chemos advanced materials is also in the same direction. Additionally to that, there are several other conversations both in the semicon space as well as in the applications that are available for hive, you know, high value environments like data centers, etc. You know, those are, those are pretty much ongoing we are establishing within Vishalpai.
Anish P. Ganatra
At the end of this conversation, but.
Anish P. Ganatra
Continuously meeting new customers on this front and we’re seeing how best to sort of access the growth over there in a meaningful way.
Nitin G. Kulkarni
Just to add, you know, on what Anish said just now, you know, so in this advanced material segment also it is going to be product as well as the service play and you know, the development environment, the analytical infrastructure, the skill set, you know, to bring, you know, the product, you know, from the early stage development, you know, to the levels and then, you know, to reach, you know, to the new standards of this requirement of this industry. So you know, fortunately we have developed, you know, that infrastructure skill set by partnering, you know, with the right stakeholders in this journey for both product as well as service play.
And so this is just beyond, you know, the electronic grid. So we are really looking at the basket of products which normally requires to be, you know, showcased, you know, in this industry to become a significant player. And electronic grade HF is just, you know, the stepping stone. And based on that, you know, we are also revolving the other product portfolio and a lot of developments are happening on that front also. So please consider, you know, this electronic grid, you know, as the starting point with couple of other products which are crossed, you know, either, you know, the development stage and you know, in the pilotation stage.
And again the end use industry is same as Anish was saying. So our focus is how we can expand our product portfolio in data center, you know, high end data centers even in semicon you know we are looking at the niche, you know in the photoresist type of, you know, the applications. So you know this is end of the day, you know the high value environment, you know, which you know we are going to, which we are targeting with the skill sets and the infrastructure which we have developed.
Ankur Periwal
That’s helpful.
Ankur Periwal
Yeah.
Ankur Periwal
So just one small question on the CDMO side. Congratulations for the new molecules, especially the late stage one wherein we are making further improves. How do you see the mix between late stage and the early stage one spanning out as we look at our $100 million target there?
Anish P. Ganatra
So Ankur, I mean you know in terms of the number of molecules know I think we’ve always said that our idea will be that at any given point in time we will have about 40, 50% of early stage and 60 to 50% of late stage. Of course you know in terms of value the late stages will start, late stage commercial will start to occupy a bigger volume because that’s the game. Right. But the portfolio will always be balanced because you know we sort of mature this business. The idea is that you early stage at some point so we will make sure that the balance is kind of maintained.
In fact even for this quarter. That’s the kind of ratio.
Ankur Periwal
That’S helpful. Thank you and all the best.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to one or two per participant. Should you have a follow up question we would request you to rejoin the queue. The next question is from the line of Krishan Parvani from GM Financial. Please go ahead.
Krishan Parwani
Yes. Hi sir, Congress on very strong set of numbers. Two from my side. First on CDMO when will phase two of CVNP for capex of 128 crore beginning? And which customer will it be for any of the EU majors or US major that you have mentioned in the presentation?
Anish P. Ganatra
Yeah, what’s the second question?
Krishan Parwani
So which customer will it be for any of the EU majors or US.
Krishan Parwani
Majors that you have mentioned in presentation?
Anish P. Ganatra
Thanks for that. So CDMO, you know the phase two 128 will basically be preserved or as soon as we have greater visibility on.
Anish P. Ganatra
Any of the customers. That’s the capacity we are building in a scalable and modular form. From the way we look at currency it looks very high possibility on the EU majors product. But it’s early days when we get to that we will sort of certainly look at. Our idea about these CDMO business is.
Anish P. Ganatra
Actually to make sure that you Know, whenever the capacity utilization of the plant.
Anish P. Ganatra
Hits 60% or more, it starts triggering the thoughts of the next CAPEX investment because you always want to need that sort of headroom to continue to grow.
Krishan Parwani
Understood. Very well explained, sir. And second question is on the the AHF part. So given you are expecting commercialization of.
Krishan Parwani
When do you expect merchant sales of.
Krishan Parwani
Let’S say diluted HF first and probably the solar and electronic grade I think.
Anish P. Ganatra
So merchant sales, some of that will start actually this year itself. Solar and high purity, you know, let the bush can move, get done. We are currently detailed engineering stage, you know, when that sort of gets done and we start putting in more Capex, obviously that will come in. Our focus will be mainly in the electronic space as opposed to the solar space.
Krishan Parwani
Okay.
Anish P. Ganatra
That in most of the places we will be owning the niche products using our previous something that is towards getting commoditized. So you know, a good example of that is the Chemos announcement that we did from. That’s the kind of niche applications we are going to be working on and we are progressing some of the discussions around itself and hence I kind of specifically called out the fact that the.
Anish P. Ganatra
Focus is on electronics application rather than solar.
Krishan Parwani
Noted sir. Thank you so much for answering my question. Wish you all the best.
Anish P. Ganatra
Thank you.
operator
The next question is from the line of Nilesh Guge from HPFC Securities. Please go ahead.
Nilesh Ghuge
Yeah, thank you sir. So my question is on the Chemos project. The project is expected to commission in just one year time. So at what stage the project is currently and once it’s commissioned so how quickly we can the optimum level and what kind of a revenue you potentially see from this.
Anish P. Ganatra
So again Nilesh, I think we take.
Anish P. Ganatra
The last question first because that’s the.
Anish P. Ganatra
Most cds, you know, we are not allowed to talk on the revenue asset terms or capacity under the commercial arrangement with Chemos. We’ve already clarified that previously so I will not take that date again. The other sort of point about where are we today? The work is going on, project is already underway, the teams are working together, people engineering is being progressed on that and we are on track for the first quarter of FY27 is when we said we will start commercial production, that’s when we will start. This is, I mean from the size of the CapEx, we know that at this point capacity plan to help accelerate the adoption and therefore achieving optimum will be very quick.
Nilesh Ghuge
Okay.
operator
Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in the Conference. Please limit your questions to one or two per participant. Do we have a follow up question? We would request you to rejoin this. The next question is from the line of Arun Prasad from Aventus Park. Please go ahead.
Arun Prasad
Good evening everyone and thanks for the opportunity. So my first question is on the, on the Nectar project that the dedicated capacity, we said that we have very firm order for the Canadian 26. And this volumes represent what kind of capacity utilization for the dedicated portion.
Arun Prasad
Okay, so I mean, yeah, you’re right. We have firm orders for the dedicated capacity. For the dedicated capacity we represent 100%.
Arun Prasad
Which is 50% of our overall capacity. And which is why we said that half of the pad will come this year and the full part will be achieved next year.
Arun Prasad
So the firm order that we are talking about as a percentage of say the dedicated capacity, what would be that indicator utilization?
Anish P. Ganatra
100% of the dedicated 100%.
Arun Prasad
Oh, okay.
Anish P. Ganatra
And that is always the plan, Arun.
Anish P. Ganatra
You know, the plan was that in the first year we would run the dedicated capacity to its feet. That’s how the landfill happened. And in the second year, year we would sort of take the capacity for.
Anish P. Ganatra
Our own captive thing with the first year also producing some extra material to complete the validations for the captive portion.
Arun Prasad
Second, on Fermion, we think that for our calendar year 26 delivery, that how much of that is dependent or connected to our phase one startup? And if phase one of CGMP4 gets delayed, we will be slipping up on the delivery on this.
Anish P. Ganatra
So I don’t know why you say.
Anish P. Ganatra
Phase one is getting delayed, but you know how much of that is, you know, so you know the way this works, with permission, again, commercially, this is 3% of their value.
Anish P. Ganatra
Right.
Anish P. Ganatra
We are working very, very closely with them on the project. They are with us on the ground monitoring the project along with us all the time. So if there was any doubt in anyone’s mind of a slippage, you wouldn’t have the orders in your hand.
Arun Prasad
I was just wondering, you know, what can lead us to kind of miss this.
Anish P. Ganatra
We’re not emphasizing anything. We’re not emphasizing anything. So there is enough room, we have room for carry on even today.
Anish P. Ganatra
And this will be the stage at.
Anish P. Ganatra
Which we are in the cdm. And we said this before, you know, from just, from the Phase 1, 2 and 3, we can do revenues up to 55, $16 million. So that’s not a problem with Phase 3, Phase 4 coming in Phase 1, we are on track for that. So there is room to, there is flexibility within the asset to manage any unforeseeable event so to say. But not that we are expecting any.
Arun Prasad
Good to hear Anishpan. No issues.
operator
I’m sorry to interrupt. May I request you to join the as there are several participants. Thank you. The next question is from the line of Abhijit Akela from Kotak Securities. Please go ahead.
Abhijit Akella
Yeah.
Abhijit Akella
Greeting.
Abhijit Akella
Thank you. Just one question on the specialty chemical quarterly revenues. So 219 this crores this quarter seems to be you know, somewhat lower than I think 257 or so last quarter. Sorry, 259 last quarter. So if you could please yourself as to understand what’s what the reason for that is.
Anish P. Ganatra
Are you comparing Q on Q? Is it?
Abhijit Akella
Yeah. March data versus June.
Abhijit Akella
Yeah, I think.
Anish P. Ganatra
Yeah. That’s what you’re doing.
Anish P. Ganatra
So these are campaign driven.
Anish P. Ganatra
I mean as you are aware the.
Anish P. Ganatra
Campaigns are what drives the full utilization. Like I said last quarter we had 80, 85% utilization. This quarter we are talking about 70% utilization. So I wouldn’t read anything beyond that. You should look at this from a full year point of view and even in the environment should be. You know, we feel that we are in a very good place one because of the base floor order book that we have and plus the new capacity that is coming in that will drive.
Anish P. Ganatra
Decent growth in the spectrum and you.
Anish P. Ganatra
Can consider year and years.
Abhijit Akella
Okay, thank you. And the other one I just had was on the seasonality of the HPP vertical. Just given that you know R32 is a newer product for us and going into maybe some newer areas, geographies, etc. So if you could please just understand is this a good number, the one Q number to sort of assume for the less for the remaining quarters of the year or could there be some seasonality?
Anish P. Ganatra
I mean there is, you know, if you know how these products get sold today there’s more export versus domestic demand on this. So there is a good sort of balance of both when you look at the overall portfolio and I think the run rate that you’re seeing in this quarter is a good run rate to hold.
Abhijit Akella
Okay, understood. Thank you so much. All the best.
operator
Thank you. The next question is from the line of Meet Vora from MK Global. Please go ahead.
Meet Vora
Yeah, thanks for taking my question. So the first question was on R32. What I understand is that we have done the earlier expansion at significantly lower Capex because maybe we have converted some existing assets. Like we have expanded around 5000 tonnes at 80 crores capex. Now if we plan to expand it Further, just wanted to understand whether the CAPEX would be relatively large compared to our previous expansion and also by what time should our capacity come on stream if we want it to be considered fully for the quota calculation or quota consideration.
Anish P. Ganatra
So for me just kind of struggling with your comparison on the earlier capacity. Both our R32 clients are working in the same wave of capex.
Meet Vora
No, I. What I’m trying to understand is if we expand further the next level of Capex will be more green filled in nature versus what we have done previously.
Anish P. Ganatra
No, no, both are same. It’s all. We have not done any conversion from anything to anything. It’s basically.
Anish P. Ganatra
So we don’t think that I. I don’t know where you’re getting. You know, it’s.
Anish P. Ganatra
It’s kind of.
Anish P. Ganatra
It’s not a question even in our.
Anish P. Ganatra
Mind to be honest.
Meet Vora
Okay. And sir, just wanted to understand.
operator
I would request you to please rejoin. Thank you. The next question is from the line of Siddharth Karakar from Inquiry Securities. Please go ahead.
Siddharth Kerkar
Hi sir, can you just give a sense on the realizations between electronic grade HF and the current HF that we.
Siddharth Kerkar
Would be selling in the external market and what would be the margin difference between these two products?
Anish P. Ganatra
So that is a great question.
Anish P. Ganatra
Unfortunately we will not share specific numbers on it. But rest assured that our whole idea of going into electronic grade is to get into more and more niche applications. As you get into niche applications with greater level of chemistry and synthesis you.
Anish P. Ganatra
Are going to get into a higher realization per kilogram of hf. And that is the driver.
Anish P. Ganatra
Which is why we very clearly taken a call to stay away from engine. That’s not much.
Siddharth Kerkar
All right, thank you so much.
operator
Thank you. The next question is from the line of Surya Narayanpatra from Philip Capital India. Please go ahead.
Surya Narayan Patra
Yeah, thanks for the opportunity sir and congrats to the great set of number. My first question is on the speciality chemical side, the three molecules, what we are talking about starting from the next quarter. Could you give some more color to it, sir? What is the nature of the product and in terms of size, scale and all those kind of things?
Anish P. Ganatra
Yes, so firstly those are actually in this quarter, the quarter that we are currently talking in.
Anish P. Ganatra
So it’s in Q2 quarter as opposed to Q3. I’ll just clarify that. The other thing is there are three molecules but two of them are large enough or have the large enough potential to be calling out at us for investment, you know, so. But that we have to wait and develop. We are starting the Supplies now. And as that matures and develops and we know what the. You know we can see the size of the opportunity materializing. We’ll definitely look at expansion.
Surya Narayan Patra
Okay.
Surya Narayan Patra
It is for an existing patented molecule kind of thing or it could be a generic opportunity, hence ramp up, could be quick. How should one think that way?
Anish P. Ganatra
But this is all for a new AI.
Anish P. Ganatra
We are talking for a new.
Surya Narayan Patra
Okay, just one class.
Surya Narayan Patra
Okay.
Surya Narayan Patra
One clarification about the HA project. Sir, what is the service angle that you have mentioned about this hf? Yeah.
Anish P. Ganatra
Sorry, can you just elaborate a little bit more so we can relate to it?
Surya Narayan Patra
No, in fact in the opening remark Nitin sir mentioned about a service angle apart from the product angle for the HA project.
Anish P. Ganatra
What that means is if you look.
Anish P. Ganatra
At our approach, we have got approach.
Anish P. Ganatra
Where we do a product play and then we do partnerships and service with large majors like Chemos.
Anish P. Ganatra
And the likes.
Anish P. Ganatra
That we are talking about now in the area where we got the technological.
Anish P. Ganatra
Capability we’ve got the ability of where it adjacent to our own capability. Plus we’ve got the capability to place the market and call the markets. And we will do that, you know in the area where we think the best value for shareholders is accessing through a partnership lens. That’s what we will do through a partnership lens. So that’s what he meant by product.
Surya Narayan Patra
Okay, and how much of that would be.
operator
Request you to please rejoin the queue. Thank you. The next question is from the line of Bhaskar Chakraborty from Jeffries. Please go ahead.
Bhaskar Chakraborty
Thank you very much. I wanted to ask that US has announced 25% tariff in India plus some additional penalty because of links with Russia. So how does that impact on exports to unaware and exports into us.
Anish P. Ganatra
So Dr.
Anish P. Ganatra
Your voice was a bit.
Anish P. Ganatra
Disturbance in the audio but I’m taking or asking about the tariff question. I mean that’s really hot on the press, right? I mean so you picked up the question as it’s coming. But you know you’ve got to think of Naveen in two ways that we are.
Anish P. Ganatra
Where are we exposed to the US market directly?
Anish P. Ganatra
You know so it you know, in a sense, you know we’ve got an exposure to some of our refrigerant gases which we are covered under ad duty. So there is not much of an impact there. The other.
Anish P. Ganatra
Somebody.
Anish P. Ganatra
Some background noise from somewhere. The other thing to remember is where we do have a contract and supplies under existing long term.