Navin Fluorine International Limited (NSE: NAVINFLUOR) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Vishad Mafatlal — Executive Chairman of the Board
Nitin G. Kulkarni — Managing Director
Anish Ganatra — Chief Financial Officer
Analysts:
Pooja Swami — Analyst
Sanjay Jain — Analyst
nitesh — Analyst
Jason — Analyst
Rohit — Analyst
Surya — Analyst
Abhijit — Analyst
Vivek — Analyst
Arun Sri — Analyst
Sajan Kapoor — Analyst
Meera — Analyst
Archit Joshi — Analyst
Presentation:
operator
Good day and welcome to the Naveen Florian International Limited Q3 and 9 month FY26 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 call is being recorded. I now hand the conference over to Ms. Pooja Swami from MUFG. In time. IR. Thank you. And over to you ma’. Am. Thank you.
Pooja Swami — Analyst
Shruti. Good evening everyone and welcome to Q3 and 9 month FY26 earnings conference call of Naveen Flooring International Limited. Today on the call we have with us Mr. Vishad Masatlal, Chairman, Mr. Nitin Kulpaji, Managing Director and Mr. Anish Ganatra, Chief Financial Officer. This call will contain forward looking statements about the company which are completely based on beliefs, opinions and expectations. As of today, actual results may differ materially. These statements are not the guarantee of our future performance and involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on page number two of the investor presentation of the company which is uploaded on stock exchanges and on the company’s website.
With this, I hand over the call to Mr. Vishad Masatlal for his opening remarks. Thank you. And over to you sir.
Vishad Mafatlal — Executive Chairman of the Board
Thank you. Good evening ladies and gentlemen and welcome to Naveen Florine’s Q3 and nine month FY26 earnings call. I am joined today by our Managing Director Mr. Nitin Kulkarni, our CFO, Mr. Anish Ganatra and Ms. Payal Dawe from MUFG. In time, our Investment Relations advisor. The environment in which we operate continues to evolve shaped by global developments and macroeconomic trends. While these dynamics bring their share of challenges, they also create new opportunities. I am pleased to share that we have remained resilient and agile, consistently adapting our operations to sustain growth and deliver strong outcomes. Our growth has been made possible by the relentless dedication and tireless efforts of our teams.
Through focused teamwork, strong R and D initiatives and the adoption of right technologies, we have been able to navigate diverse global scenarios. Equally important are the deep relationships we have built with our partners which continue to strengthen our foundation. I want to express my heartfelt gratitude to every member of our team and all other stakeholders as their commitment has been driving force behind the performance we are witnessing today. I am pleased to highlight that our CGMP4 Phase 1 facility has as commissioned based on our timelines post successful validation of batches. We started commercial supplies during the quarter.
Our AHF project was also successfully commissioned recently and commercial supplies have started. We are pleased to inform you that all our ongoing capexs are progressing well. With continued positive pricing trends and ongoing capacity expansions, we are confident that the HPP business will continue to deliver sustainable growth. Our Specialty Chemicals division has achieved its highest ever quarterly revenue underscoring both strong execution and deeper partnerships. Meanwhile, the CDMO business continues to build momentum with strong order visibility across all our verticals. Momentum remains strong supported by clear order visibility, reinforcing confidence in our growth trajectory. We are also progressing well on the advanced material space and with initial evaluations for projects in the electronic chemical value chain.
Before I hand it over to Nitin for a detailed update on the business, I’d like to briefly talk about the current global developments and the impact of the Union budget. Both the EU Free Trade Agreement and the US Trade deals are good news for our industry. We expect these to support our bilateral trade. The government’s focus on strengthening domestic manufacturing is also very encouraging for the chemical sector. Further, we are encouraged by the launch of India Semiconductor Mission 2.0 which focuses on semiconductor manufacturing in India along with associated ecosystem of critical supplies including chemicals and gases.
This is a positive for our advanced material businesses. With these policy supports, we believe the Indian chemical industry is well placed to grow globally, adopt advanced technologies and contribute to higher quality exports under the make in India and Vixit Bharat 2047 Vision. Thank you once again for joining us today. And now I would like to hand over to NITIN to provide an update of our operating and business performance.
Nitin G. Kulkarni — Managing Director
Thanks Vishad Bhai Good evening. Thank you for joining us on the call today. We are happy to report a strong performance across all our business verticals for the quarter as well as for the nine months of FY26. For nine months FY26 our revenue grew by 44% to INR 2376 crores while quarterly revenue increased by 47% year on year to INR 892 crores. Our margins for the nine months stands at 32% compared to 21.5% in the previous year reflecting an expansion of 1047 basis points. This improvement has been driven by our focus to diversify our portfolio, expand our market presence, deepen strategic partnerships and enhance customer relationships.
This approach has solidified our presence as a globally trusted provider of diverse fluorochemical solutions while fueling growth in competitive landscape. While focusing on this growth journey, we also kept ourselves nimble and disciplined by relentlessly focusing on maximizing operational efficiencies, strengthening R and D, enhancing technology platforms and optimizing supply chain. Talking about our business verticals, our HPP business delivered a strong and consistent performance during the quarter. Revenue for quarter three FY26 stood at rupees 412 crores registering a 35% year on year growth compared to 306 crores in quarter three FY25. The growth was driven by combination of higher realizations and improved volumes supported by constructive price environment.
We are pleased to inform you that AHF project has been successfully commissioned during Quarter 4 FY26. Additionally, the CapEx for incremental HFC capacity equivalent up to 15,000 metric tons per annum of R32 is progressing as planned and is expected to be commissioned in Quarter 3 FY27. Coming to our Specialty Chemical business, Quarter 3 FY26 reflects a strong quarter for this segment. Revenues increased to rupees 354 crores reflecting a 60% year on year growth over 221 crores in the quarter 3 FY25 making this the highest ever quarterly revenue for the specialty chemical vertical. The outlook remains strong and encouraging supported by strong order visibility for Q4 and beyond.
Our product pipeline continues to gain strength with scale up in existing molecules and several new molecule launches are lined up on the project front. The CHEMOS project is progressing well and is on track for completion in Quarter 1 FY27. Further, the debottlenecking of MPP capacity at our brash facilities expected to Commission in Quarter 3 FY27 which will further enhance our capabilities. Moving to our CDMO business, this segment continues to demonstrate strong momentum with improved visibility. Revenue for Quarter 3 FY26 stood at 127 crores growing 61% year on year from 79 crores in Quarter 3 FY25 driven by strong execution and customer traction during the quarter, we achieved a significant milestone with our European CDMO partner as we have successfully completed validation and commercial supplies as commenced from our CGMP4 facility.
This engagement provides strong revenue visibility over the next three years. We have also concluded supplies for material order from a major EU customer with discussions also underway for future supplies. Additionally, another scale up order from a large European customer is scheduled for quarter four FY26 deliveries on the advanced material space. We continue to progress on multiple projects to become part of the overall semiconductor and electronic value chain. We are evaluating all these opportunities and will update you in the near future. With that I will hand it over to Anish for financial update.
Anish Ganatra — Chief Financial Officer
Thank you Nitin Good evening everyone and welcome once again to our earnings call. I will now walk you through the company’s financial performance for Q3 and 9 months of FY26. Looking at our quarterly performance on a consolidated basis, our revenue for Q3 FY26 came in at 892 crores reflecting a growth of 47% year on year and 18% sequentially driven by strong contribution from all verticals. Operating EBITDA stood at 308 crores, up 109% year on year and 25% quarter on quarter. EBITDA margins improved to 34.5% compared to 24.3% in Q3FY25 and 32.5% in Q2FY26 driven by improved realization and operating efficiencies.
Operating TBD increased to 243 crores versus 98 crores in Q3FY25 and 179 crores in Q2FY26 marking a growth of 149% year on year growth and 36% sequential growth. Profit after tax for the quarter stood at 185 crores recording a growth of 122% year on year and 25% quarter on quarter. On a nine month basis our revenue was 2,376 crores compared to 1,648 crores in the same period last year, a growth of 44%. Notably, I would like to highlight that we have surpassed our full year revenue number of FY25. Within the first nine months of FY26.
Operating EBITDA reached 761 crores up 114% from 355 crores. In the nine month period ending for FY25. EBITDA margins improved to 32% versus 21.5% in the prior year. Same period profit after tax for nine months stood at 451 crores, 56% higher to full year FY25 PAT of 289 crores. As of 12-31-25 our net debt to equity ratio stood at 0.03x and net working capital was below 80 days of sales. This reflects a disciplined approach to access growth. Before I conclude my remarks, I would like to summarize with the key takeaways. 1. Our earning growth rate surpasses the growth rate in revenue resulting in operating leverage coming to play.
Growth reflects the performance across all verticals execution of wave one projects AHF CGMP4 concluded and commissioned during the quarter. With this wave one of CapEx projects concludes and wave two projects, namely the MPPD bottlenecking, the R32 expansion, HFC expansion and the CHEMOS project are on track for completion. As indicated, strong project pipeline across the verticals again continues to fuel opportunities for future growth. Financial framework remains conducive to growth. With that I conclude my remark and open the floor for questions.
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 start and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and do. Participants are requested to use answers while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Sanjay Jain from ICICI Securities. Please proceed.
Sanjay Jain
Yeah, thanks. Good evening and thanks for taking my question and congratulations for a very good set of numbers. I got few questions here. First from the Naveen Fluorine Advanced Science. It appears to be doing significantly better. Sequentially the revenue console managed standalone stands at 322 crore versus 196 crore. So there is a growth of 126 crore sequentially. Can you help us understand what segment is driving such a sharp improvement? And we have three large projects within it. HFO dedicated plant and MVP3. Where are we in the utilization cycle for all these projects? Thank you.
Anish Ganatra
Okay, you want me to take this or you want to just put your questions first?
Sanjay Jain
No, let me finish this and then probably I’ll go for the others.
Anish Ganatra
Okay, so Naveen Chlorine Advanced Science is again you’re absolutely right. Sequentially the growth is solid but it’s also something that one would expect to see because as we’ve indicated in the past there has been a pipeline of projects in the specialty vertical and including the Nectar ramp up. So those two are playing out very well in Naveen Florine Advanced Sciences which is what you see in the numbers. I would like to also put this thing in which is, you know, specialty vertical. For this quarter is reported a number of 350 crore which in some sense sets up a solid run rate of what we should expect the specialty business to deliver going forward.
And of course there will be further drivers of growth with the wave to CAPEX that we’ve announced.
Sanjay Jain
Yeah, got it. And utilization for all the three projects.
Anish Ganatra
Utilization for, you know the MPP one is solid for the full year. We expect to almost Hit the parallel utilization for MPP2 is about, you know, 80%, 70%, you know, around in that range. But we expect that to pick up in the coming year and utilization for nectar is again as we’ve always said this year we would hit roughly 50% of the par. So we are on track for that.
Sanjay Jain
And dedicated plant.
Anish Ganatra
Dedicated plant. I told you about 70%.
Sanjay Jain
Okay, 70%. Also there is still headroom to grow from here. For Naveen Advanced Sciences that implies.
Anish Ganatra
Indeed, indeed. I mean for Naveen Advanced Sciences with the AHF commissioning you will further see growth coming in from there in the vertical as well. And also what we’ve announced on MPP debottlenecking that will also give further growth coming into the future. So in a sense, you know, last quarter when we announced the debottlenecking project we very clearly said that, you know, we are coming to a point in the specialty business where our strategy of working closely with the global innovators is paying off. And which is why we announced the debottle making project because we were seeing that, you know, the capacity addition would be at value accretive, you know.
Sanjay Jain
Got it, got it. But if I look at the commentary from other chemical company, everybody is struggling from ACTIM cycle not picking up probably as everybody thought. That’s not really hurting us. Are we doing anything different in ACT chemical or just a base effect or there is mix between ACT Chemical and non chemical?
Anish Ganatra
You’ve got to go back to a commentary a couple of quarters ago where we said that we had started working proactively with the global majors to be their technology partners in their supply chain and not just relationship which is transactional. Right. And I think that along with the combined effort of our RD manufacturing teams and the business teams is actually playing out in what you see in the numbers.
Sanjay Jain
Yeah, got it. But it is largely active driven. Right. As of now within the specialty.
Anish Ganatra
Yes, indeed. Indeed, indeed, indeed.
Sanjay Jain
Got it. The second question on the margin and AHF were put together now that AHF plant has commissioned, we will sell more, we will buy less which should be margin accretive and we are already at 34.5%. How should we think about this?
Anish Ganatra
So I think you are right on the first part of the statement. Sell more and you know, buy less. There is absolutely no doubt and as you know, you know we always see AHF as a mother plant. Right. So we are, you know the, the HFC capacity that we’ve announced obviously will sort of come into play in utilizing some of that added capacity and we will be out also in the trade market. There’s no doubt about that. But I think the bigger game here is how do we use the new AHF capacity to advance our vertical that we are incubating.
You know the advanced materials vertical. And there as Nitin mentioned, there are several projects that we are working actively on and hopefully some of them should kind of move into traction in the near future. We’ll keep you guys updated and on the margin. Anish, on the margin I think you know we have always said 25. I think it’s now safe to think of Naveen as a 30% annual number but let’s not kind of hold that on a quarterly sort of treadmill run rate. Yeah. So it will be an annualized number that we are looking at 30% give or take plus minus 200 basis points.
But that’s where we would be this year. Clearly as you will see the numbers and the math will be in front of you that we would be hitting or crossing the 30% number. Yeah.
Sanjay Jain
One last question from my side. I know there are other in the queue on the ahf. We rightly said there is an electronic and semiconductor opportunity there but why not solar? I think we have been downplaying solar while solar production in India is picking up so strongly and there are larger players who are entering and that requires a good amount of EHF and another purity of semiconductor. But not even the normal HF works there somewhere in between. But why are we not playing that?
Anish Ganatra
So Sanjay, as you said we never said we are not playing into it. I think what we are saying and this is really important to understand that solar is a part of journey to get to electronics grade and that’s what we will do. We will get electronics grade but it does not exclude solar. There will be solar and there will be electronic grade. But we want to bake this capex in a manner that we are able to access electronic grade. Yeah. So that’s why it’s taking some time but hopefully not too long.
Sanjay Jain
Yeah, got it, got it. And this, this client is supposed to. Come in when the the boost technology related client.
Anish Ganatra
So like I said before, bush or no bush we will move and that’s what we are doing. We’re actively working on this and you should see something hopefully in the coming.
Sanjay Jain
Quarters and any, Anything on the BF3 for a semiconductor application it’s part of the equation.
Anish Ganatra
So as we get into electronic grade you have high purity of all the chemical gases. We are going to play on our strengths of fluorination and get into downstream Higher purity gases of which of course bf3 is one of them as well.
Sanjay Jain
Very clear. Anish, thanks. Thanks for taking all this course questions so patiently and best of luck for the coming quarters.
operator
Thank you. The next question is from the line of nitesh from Anandrati. Please proceed.
nitesh
Yeah. Hi team. Thank you. Congratulations on a good set of numbers again, you know, on the console minus standalone, that is a subsidiary EBITDA margin in the last couple of quarters ever since the specialty molecules started ramping up, that has surged to 45% from you know, from around 28% there. Gross margin in this period has increased by about 400 dips only since, you know, there is hardly any OPEX increase in the last, you know, couple of quarters, you know, I mean the EBITDA on the incremental revenue seems to be north of 65% there. So could you kindly give us some color here? I mean if this is a sustainable margin profile of the specialty molecules here or there is something more to this search.
Anish Ganatra
So Nitish, thanks but I don’t think The EBITDA is 65% north. I think there is some. You’re looking at some numbers but in principle you’re directionally. The comment is correct that you know, the margins in the subsidiary are looking better and so is nfil. Also what one has to remember, see we’ve always communicated this very strongly in the investor community and to you guys is that our priority has always remained on manufacturing excellence as number one priority. We are consistently driving economies and removing inefficiencies in the system. And that’s why you see a solid control on cost.
That’s why you see a solid control on innovation in terms of trying to bring in better processes, improved processes, higher yields and lower losses. So some of this you will naturally see. One has to remember also that NFASL is not a listed entity. So it doesn’t have the same overhead structure as nfil which is a listed entity. But there is a proper transfer pricing arm’s length association between these two companies to transfer the cost between the two sort of entities. So there isn’t anything that you’re seeing unusual there. Perhaps it was something that one would expect and you know, in a scenario where we are you always and like we said, even last quarter quarter, you know, you will see operating leverage play out very nicely in the mean.
Yeah.
nitesh
Sure sir. So, okay, so the second one is on the refrigerant bit. So has there been a change in the exports to domestic mix on the R32 side? And you Know the reasons, maybe you know, that you can attribute that, you know. And how much has been our 32 utilization in Q3? Any significant increase sequentially that you might be seeing.
Anish Ganatra
So R32 utilization has been 100%. Of course in this quarter we’ve taken a shutdown for Argo 1, which is the usual shutdown, planned shutdown, you know, for catalyst changeover. But you know, the mix between export domestics is actually not materially different from what it used to be. Of course as we are preparing for the new capacity to come on stream, we are also looking at expanding our market reach which also is happening simultaneously. So a lot of this you will see moving part because we’ve got to make sure that we are able to place the new upcoming portfolio as well.
And there are certain sort of accesses that we are looking to get globally on R32 as well.
nitesh
Sure. So just one last maybe before I get back into the queue. So you know, with the Chemos project on track for completion in Q1, you know, could you give us a sense of the revenue ramp up, you know, over there, I mean, over FY27 to 29. So FY27 is a partial and you know, I mean how the margins should be thought about relative to the overall business, like you know, without getting into specific numbers there.
Anish Ganatra
So like I said, the Chemos initial, the project is an initial capacity to drive an accelerated adoption of the product in the market. You know, as we’ve said previously, we are under a confidential agreement to not talk about the quantities or the revenue associated with that. But the size of the Capex should give you a decent feel. This Capex as it sort of progresses to access the overall market of liquid cooling, you know, will sort of come into fruit two years. Once it starts off, that’s when we will start to talk of how and what sort of a bigger CAPEX looks like, you know, and at that stage we can possibly talk a little bit more on the future outlook of the revenues, etc.
But just to give you a sense, the liquid cooling market I believe is close to about $3 billion potential. And you know, two phase cooling is one part of the solution, critical and necessary part of the solution to support the data center growth in the world driven by AI. Yeah.
nitesh
Thanks a lot for answering my questions. Wish you all the best for the future. Thanks.
operator
Thank you. The next question is from the lineup. Jason from IDVI Capital, please receive.
Jason
Yes sir. Thanks for taking my question. First question just pertains to, I mean you’ve been saying that for the AHS plant, we’ll basically look at increasing or basically keeping our realization highest. Increasing the realization per kilogram. Now, I just wanted to just confirm how much of the 40,000 will be used captively and how much will be sold externally.
Anish Ganatra
So I think the answer there, no, is sort of implicit in your question. In a sense, you know, if I have to get more realization, I have to keep consuming captively more and more. The trick is the trick and the business strategy is to consume it into more and more niche chemistries and advanced planes, you know.
Jason
Okay, so. But do we have any, any ballpark target in mind for a proportion.
Anish Ganatra
So. So like I’ve said before, you know, this is a license to grow capacity. Yeah. Or license to dream capacity. And in a sense, by putting this capacity, we are signaling that we will continue to develop chemistry and capability in downstream applications to grow this. Now how and what frankly we’ve talked about in all the verticals, including, you know, the play that I’ve talked about in advanced materials where we said we will go on the back of fluorinated chemistry. So it’s very easy for you guys to figure out what that market size is and what the potential is, particularly given the trust that the, you know, Indian government is now putting on semiconductor manufacturing and data centers in India along with the right sort of incentive structures.
Yeah. So I think over there, again, at this stage, all I would say license to operate. I mean, think of it this way, Jason. We wouldn’t have been able to DO or Access32 opportunity if we didn’t have.
Jason
The HF, you know. Right, sir. Right, sir. Sure. Yeah. And so just about this cooling liquid market, you said it’s the total market of $3 billion, is that right?
Anish Ganatra
Yeah, I think the 3 billion is the potential market size. Yeah.
Jason
Yeah. But it’s on a global scale, that’s what you’re saying, right?
Anish Ganatra
Yeah, yeah. Global scale.
Jason
Yes, global scale. Sure. Sir, just wanted to know in the.
operator
Mr. Jason, may we request you to join the question queue as there are other several participants waiting for the turn.
Jason
Okay, sure.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to 2. For participants. The next question is from the line of Rohit from 361. Captain, please proceed.
Rohit
Thanks for the opportunity and congrats on a very strong set of numbers. First question on the Nectar project. So you alluded that for this year we are on track of utilizing the capacity, half of the capacity. Are we also on track to utilize the other half in FY27. Just your broader perspective on the same. Thank you.
Anish Ganatra
So we are working to secure the other half. If not other half, we should be pretty close. That’s what our agent.
Rohit
Yeah, that’s helpful. And second question. In terms of the nine month task, cost has been largely flattish. I understand that you know we have been optimizing across the board. What is the sense in terms of from here on will there be a natural inflation adjusted growth in the staff cost?
Anish Ganatra
So I think there will be two things playing out as you look into the forward. You will see that the PAR numbers we’ve indicated for various projects will give you a certain growth rate that is implicit in Naveen’s performance as we reported today. And you will see that that will also entail that we will be taking certain calls on capability enhancement across the organization. So you will see a combination. But I think a safe bet is to look at what we are saying. Seven, 8% of revenue as our employee cost. We were historically at a two digit number but I think we’ve now contained it to where we should be in terms of comparison to peers or where we think it’s appropriate.
And that’s what I would do if I was to model in your place.
Rohit
Sure. Just one last clarification on a sequential basis where we stand today in this quarter. Are we also expecting on all the three segments? We are fairly confident of growth.
Anish Ganatra
So absolutely. I mean like we said before, all three verticals are performed and all three verticals continue to demonstrate the capability to access the opportunity. Some of that is clearly visible in the capex as we’ve already announced and which we will continue to do as we progress our projects in a disciplined manner. And with CDMO obviously you know the. With every month going by we are getting closer and we are inching closer to our aspirational number of hundred million.
Rohit
Perfect. That’s helpful and all the best.
Anish Ganatra
Thank you.
operator
Thank you. The next question is from the line of Surya from Philip Capital. Please proceed.
Surya
Yeah, thanks for the opportunity and congrats on the great set of numbers. First question is on the the CGMP4 plan. Based on what that we have commercialized. So since that is a dedicated unit for the the known partner. When do you expect the optimal utilization of the plant cell?
Anish Ganatra
Within the year.
Surya
Okay.
Anish Ganatra
In FY27 you will see full optimum utilization.
Surya
Okay. That is one.
Anish Ganatra
You heard mine. Sorry, I was a bit soft. You heard no, no, no, no.
Surya
Yeah, yeah, yeah. So. So within a year that you mentioned, is that right?
Anish Ganatra
Yeah, yeah. Correct.
Surya
Okay. Second, was that the kind of a positive surprise Obviously because of the kind of subsidiaries contributing incrementally as well as the Akim contributing the speciality contributing all that. So but any, any element of quarter specific contribution that whether we are seeing either in terms of revenue or in terms of margin.
Anish Ganatra
No, I think. See one thing I know I hear you say surprise but frankly all of this is in line with the Capexes and the powers we’ve announced. We’ve always said in fact last year I remember Nitin and I explicitly mentioned that as we got into FY26 the first half of this year was going to look at like the last half of last year. Right. And so this is in line with what we’ve always been working towards, you know. And so therefore not something that has happened by accident, something that we’ve driven to. And one thing also the only exceptional item that you talked about is the exceptional item we reported in the numbers which is as a result of the new.
Surya
Yeah, yeah. Just one more point on the edge thing. So see that is obviously we are targeting for the new age industries application. So if you can give some more sense about like whether the product for with how many customer that we have validated whether the customers are the local Indian ones or it is the even external market that we have validated our product for the new age industry application. So if you give some sense on that, it would be really helpful.
Anish Ganatra
There are several projects we are working on and these are with a wide range of customers, largely global spread across different geographies and they are in different stages. But I’m sure Surya you will understand there’s a lot of commercial sensitivity to these conversations. But I think I have indicated sufficient in terms of saying that this will be from downstream chlorinated chemistries and they will be niche place we do not want to get into. Me too kind of.
Surya
My just point that whether we are targeting the evolving semiconductor industry in India or something like that, that is a kind of opportunity for the new age industry or it is even the global market that we are trying to tap.
Anish Ganatra
It will be new age across the world, including India. No doubt about it. Yeah.
Surya
Great sir, Congratulations. Thank you.
operator
Thank you. The next question is from the line of Abhijit from Kotak securities. Please proceed.
Abhijit
Yeah, thank you so much. The gross margins. So despite a sharply higher salience of specialty chemicals this quarter, the gross margins are still you know, remain stable or moved up a little bit sequentially. So is this coming primarily because of maybe higher realizations in HPP or a better mix regional mix in hpp. What might the reason be there?
Anish Ganatra
Yeah. So you’re looking at your console minus standalone and you’re talking of nfsl. You’re talking nfr. Can you make that comment?
Abhijit
No, I was looking at the console gross margins.
Anish Ganatra
Yes. Gross margin captures both. You know, it captures the pricing and the realizations that we’ve had on the HFC and HPP front. It captures also the optimization and manufacturing excellence piece I spoke shortly ago about into the specialty, into HDP as well, frankly. And also it captures the increased mix coming from cdmo. So there’s a. It’s all three verticals actually contributing. Well, you know, and as we talk to our customers, see even in the specialty vertical, the agrochem players are projecting a good outlook for volume growth in the coming year. Now, pricing pressure we’ve always seen said will remain part of this business.
If you remember my early commentary, I told you how this shifts from being a, you know, lift shift adopt model to a lift SHIFT adapt embed model. And that’s, that’s what, you know, your, the power of the integrated teams comes into play there, you know, where you can bring R and D manufacturing business teams into defining how you can add value as a solution provider to your customers. Yeah.
Abhijit
Sure. Thank you. Just to clarify my question, maybe little more detail. So on a sequential basis, when I Look at it, 2Q versus 3Q HPT revenues and CDMO revenues are almost stable sequentially. Specialty chemicals is the one that’s driven pretty much all the growth. And some would have expected that the gross margins on specialty chemicals might have been lower compared to the rest of the portfolio. Yet we see the gross margins are pretty much stable at the console level, 58.8 versus 58.7. So I was just trying to understand whether there’s been a margin improvement in any of these, in any of the three verticals.
And if so, what can be driving that?
Anish Ganatra
The margin improvement has been. And CDMO has been in hpp. Specialty is remained largely flat. But obviously what you’re seeing is, you know, the operating leverage is also playing a big, big role in the earnings growth.
Abhijit
And that, that one has to remember, yeah, gross margins. So I guess that didn’t count up. Yeah. Okay, so margins have improved in both CDMO as well as HPP. Got it. And just on the domestic sales of R32, are the margins superior to the international field?
Anish Ganatra
No, not necessarily. I mean, we are having a good average realization across both markets. But I believe exports tends to be better than domestic.
Abhijit
Okay, got it. Thank you so much. All the best.
operator
Thank you. The next question is from the line of Vivek from Morgan Stanley. Please proceed.
Vivek
Hi sir. Congratulations on fantastic numbers. Just on the margin front, given that all your manufacturing initiatives and the excellence that you’ve done are sustainable, are there any factors that you’re monitoring that could pose some sort of risk to these margins beyond the pricing volatility that you previously flagged?
Nitin G. Kulkarni
No. So you’re right. So the only issue, and I’m sure you guys know it, sulfur keeps increasing, the price of fluorspower is increasing. So there are input costs that are going higher, you know, and therefore obviously that’s something that we monitor very closely and we work in to make sure that, you know, our pricing decisions reflect this accurately.
Vivek
Sure sir.
operator
Thank you. The next question is on the line of Arun Sri Vendors Bath. Please proceed.
Arun Sri
Good evening. Thanks for the opportunity. Anish bhai, my first question is once again on this specialty chemicals, sequentially we have delivered roughly 120, 130 crores. Is it safe to assume that largely this is coming from the nectar.
Anish Ganatra
Mostly this is coming from a combination of nectar and other products in the pipeline where we have scale up orders. So it’s a combination of the two. A good proportion of course is the nectar project where we concluded a campaign. Yeah.
Arun Sri
And X nectar growth is from a catalog sale or from other legacy assets.
Anish Ganatra
So I don’t do anything that catalog here. I’m basically doing it as a service provider for the large majors anyway.
Arun Sri
Okay, so this is largely from the large molecules that we are doing also.
Anish Ganatra
Yeah, because you remember we had always talked about the fact that every quarter our intent is to do one or two molecules in N Chem. So that pipeline which was anyway strong and being built up is starting to sort of, you know, yield results. Right.
Arun Sri
And when you said that agrochemicals, the volume outlook looks very good and given that we have good capacity left, would we be seeking more volumes of the expense of margins because we are anyway good in margins at the console levels. Should we expect that we picking large market share in the volume to gain volume market share.
Anish Ganatra
So Arun, first I just want to, if I said it, I’ll stand corrected. I said the outlook looks better because if you look at it, the AC chem sector has gone through some rough weather over the last two years. Right. So the next year seems to be an outlook where people are saying there will be a volume uptick. Now how much that is? Frankly I Don’t know at this stage is the pricing pressure always going to be in the ad chem business? It is always going to be there. You know, I don’t think that shift we have to all make in our minds and like I said that as Naveen we were possibly an early recognizer to that trend where we started to change the way we looked at our customers, driving a portfolio based conversation for focusing more on driving process improvements, etc.
And therefore then becoming a long term solution provider to our customers rather than just a mere supply chain contractor. So I think that is intact and I don’t think that strategy will change, frankly.
Arun Sri
Understood. And then when you earlier said that you should look at the margins at 30% plus or minus 200 from current levels at a downside risk, we are looking at the 400 bits reduction in the margins. And if at all that scenario were to play out, which products of segment would drive this down according to you?
Anish Ganatra
I’m afraid it’s not as linear as what you say. See the current margins are a reflection of the product mix in the current quarter. Now yes, if I had my wishful thinking that the product mix would be the same, the campaigns would be the same, the cost structures would be the same, I would be exactly where you are. But that’s not how life is. So we have a campaign driven mechanism where some products yield better margin, some product yields slightly lesser margins. So what I’m saying here is that on an annualized basis we should look at Naveen to hit roughly 30, 30% as EBITDA margins plus minus, give or take, whatever percentage points.
Yeah, but we should be nearer that number on an annualized basis. Yeah. And in the longer term, but not sort of, you know, quarterly run rates, etc. So that’s all I’m saying.
Arun Sri
You know, I understood Danish, perhaps I’ll put it differently. Which segment you think is for the, the risk of, you know, seeing margin reduction or which products that, I mean, where you see more. Probably we are seeing the best of the pricing and probably we should be watching out for. That’s what I, that’s a, that’s where I’m coming from.
Anish Ganatra
I don’t think that’s the right way to look at it now because see we’ve got three diversified businesses, three businesses with different, different market dynamics playing into it, you know, and within those businesses different campaigns yield different market margins. Yeah. So you know, are we kind of going to say that one margin goes up or down, this a product mix payment? So that will continue to be unfortunately, the reality, I mean, you know, that’s all I can say.
Arun Sri
Okay.
Anish Ganatra
Okay.
Arun Sri
Understood. Understood. My. My second question is.
operator
Maybe request you to join the question queue again.
Anish Ganatra
Sorry, just while we are doing that, I think it was Abhijit, you know, who had asked the question on R32 realizations. I just kind corrected. You know, our export realizations are better than the domestic ones. But I’ll just put that on the table. Yeah.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to one per participant. The next question is from the line of Sajan Kapoor from Antitrusty. Please proceed.
Sajan Kapoor
Yeah, thanks for the opportunity. I’ve only got one question, sir. Naveen has built a solid track record in high value fluorochemicals over the decades. And then also in crams or cdmo. In your view, what separates the specialty.
Anish Ganatra
Chemical companies that kind of consistently grow and maintain leadership from those that remain subscale or lose relevance? In other words, you know, if a well capitalized competent new entrant attempts to build a thousand crore specialty stroke CDMO business over time, where might they struggle the most and why?
Sajan Kapoor
Thank you.
Anish Ganatra
I think we could run a class on this. But that’s not the intent. You know, we are focused on ourselves, to be honest. And we are focused on growing in a disciplined manner. You know. And frankly we’ve put in a lot of effort over the last year and a half, two years to get this model right, you know, and get it to a level where we can plug it, play it so that you know, eventually the growth opportunities can be secured.
Sajan Kapoor
Yeah.
Anish Ganatra
But maybe we can certainly leave that for a separate conversation in a separate forum. Maybe.
Sajan Kapoor
Sure, sure, sure. I’ll request one then. Thank you so much. Thank you.
operator
Thank you. The next question is from the line of Meera from Anvil. Well, please proceed.
Meera
Yes sir. Thanks for the opportunity. Just one quick question, sir. With respect to this EU deal where India and EU has entered into an fta. Is there any raw material which we are currently importing from EU where the duties are probably higher and which is the eventually could help us in bringing down our raw material cost. Because when I see our annual report, I think last year we imported close to around 350 crores of imports. So that is A and B, with this B, how we become more opportunity in terms of getting more business from those geographies where the recent appreciation of Chinese currency and this removal of trade tariffs can enable us to better strengthen our position into Those markets your use.
Yes, thank you.
Anish Ganatra
So I mean in terms of RM imports from US or eu, very limited if at all, you know, I mean eu, we possibly do something in Turkey, but nothing beyond that. Right, so. So it’s not that. In regard to your second question on whether these trade deals are positive and offer an opportunity, I think they definitely do. You know, I mean there is an absolute leverage that it provides us, you know, in terms of making us relatively competitive versus our peers in the region. So there is no doubt about that. And I think beyond just the pricing side, one should look at these trade deals to effectively ease between geographies and I think that’s the bigger value in the long term.
Meera
Correct. And so one more thing is, is it possible to share like last year we did something around 23, 23 crores of CA and in nine months also the amount was equivalent to that. So have our exports to the EU gone up in between these years like FY25 and nine months of FY26? Can you share your views here?
Anish Ganatra
I think you will definitely find exports going up because you know, if you’re growing at the rate that we are, every geography will supply more. And also we will expand into newer geographies. But our growth engine and as you know, you know in this industry we are, it’s an infrastructure led growth. So every time we announce a capex, we indicate the path, you know, you guys know the customer. So it’s pretty easy to figure out where the material is going and how it’s going. But definitely there would be increase because you know, we’ve added the nectar plant as we were talking earlier on the call and a lot of those supplies get into eu.
So you will definitely find those scenarios changing. Yeah.
Meera
Thank you so much.
Anish Ganatra
Thanks.
operator
Thank you. The next question is from the line of Archit Joshi from Nirvama. Please proceed.
Archit Joshi
Hi, good evening sir and thanks a lot for the opportunity and congrats on a great set of numbers. So just one question on cdmo, I think the MSC that you signed with the first EU major, the final product of which continues to access newer geographies with, with approvals in countries like China, is as recent as a week ago. Now should that warrant for our market share to increase over a midterm time frame or the projections made for the final product are something that already are baked into what we expect as CGMP4 ramps up. One smaller, different question to that, we have also spoken of another EU major where possibly future shipments can also ramp up and help us get closer to the $100 million mark in CDMO.
Any developments that you would like to give us qualitatively to understand this better the path of CDMO growth in the future. Thank you.
Anish Ganatra
Sure, sure, Archit. I mean, I think CDMO is seeing some significant and good tailwinds. Yeah, I mean the cdmo, as you talked about the MSA with the European major, you know, where the molecule is continuously seeing, you know, product extensions and expansions, you know, you will see that we will be in a position to fully utilize our capacity in the coming year itself, you know, which is a dedicated plan for that. And also as we mentioned in our commentary and this, you know, with cbmo, I think now we have a solid balance of early and late stage to commercial molecules.
You know, if I remember correctly, it’s largely 50, 50 split, which is a great place to be in because, you know, every latent commercial state molecule that we are working on has the potential to quickly convert into revenues depending on readouts, etc. But I think with, with the balanced portfolio that we have and the growth in the underlying European msa, you know, we are inching closer and closer to that aspirational number, you know.
Archit Joshi
Sure. The second part of my question about the readout, I think you briefly touched upon that. Would there be anything more that you would like to know about it, given where are we headed to? Is there a solid expectation coming on that account as well? Which will probably be another feather in our cap, you know, second CBMO contract. So all yours on that, sir.
Anish Ganatra
Yeah. So again, like I said, you know, the balance molecules that we are talking about, latent commercial, including the EU major you’re talking about, there is more than one molecule that we are expecting a readout coming in the year and therefore, you know, there’s a good, good potential to access that growth opportunity. There’s no doubt about that.
Archit Joshi
All the best for that and the rest of the coming quarters. Thank you.
operator
Thank you. Thanks Sh. That was the last question. On behalf of Naveen Florin International limited that concludes this conference. Thank you for joining us and you may now disconnect your line.
Anish Ganatra
Thank you.