Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
NOCIL Limited (NSE: NOCIL) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
V.S. Anand — Managing Director
P. Srinivasan — President of Finance and Chief Financial Officer
Analysts:
Nirav Jimudia — Analyst
Aditya Khetan — Analyst
Nitesh Dhoot — Analyst
Harshil Parekh — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the NoSail Limited Q4FY26 conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. 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 touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V S Lanan, Managing Director from Nosail Limited. Thank you. And over to you sir.
V.S. Anand — Managing Director
Thank you Ikra. And good morning to everyone. I’d like to start by expressing my appreciation for your presence today. Joining me are Mr. P. Srinivasan, our Chief Financial Officer and our Investor Relations advisors from sga. I hope you have all received our investor presentation. If not, it’s available on both the stock exchanges and our company’s website. Let me begin by providing an overview of the company’s performance for quarter four financial year 26. During the quarter, revenue from operations stood at rupees 330 crores reflecting a sequential growth of 5% volumes continued their upward trajectory, registering a 7% sequential increase.
Domestic volumes witnessed a single digit growth primarily driven by improved demand following the implementation of GST 2.0. Volumes in international markets also posted a steady single digit growth underpinned by our ability to convert our long standing engagements into concrete business gains while further deepening and strengthening customer partnerships. Moving on to the full year performance. Financial year 26 can broadly be divided into two distinct arcs on a year on year basis, the first half saw a volume degrowth of 5%.
However, the second half witnessed a strong 12% volume growth supported by a GST 2.0 led demand uptick. This helped the company deliver an Overall volume growth of 3% for the full year. We expect this positive momentum to sustain in the coming quarters. On the pricing front, realizations continue to be under pressure in the quarter due to the ongoing dumping of lower priced imports. In this evolving global environment, we remain focused, maintaining an optimal balance between price and volume. With respect to the antidumping petitions filed with the Government of India, the Directorate General of Trade Remedies DGTR recommended positive final findings in respect of the antioxidant TDQ and sulfonamides covering CBS and NS in March 2026.
The same is subject to central government approvals. I would like to provide an update on the CAPEX front. The TDQ Capex at the HAG which was announced on 26th March 2024 has been completed and we have commenced trial production. After trial run, samples will be sent to customers for approval. As mentioned earlier, the total CAPEX incurred will be less than rupees 250 crores. Additionally, in line with our overall growth plans, capacity utilization and market demand, we announced another capex of rupees 130 crores on 16th March 2026 which is expected to be completed by H1 financial year 28.
This capex is for setting up a comprehensive integrated facility in the specialty portion of our rubber chemicals business during the year. I would like to acknowledge the efforts of our teams in driving initiatives across our eight strategic levers which are aimed at strengthening resilience and building sustainable long term growth for the company. As an example, under our Excellence lever, we continue to implement a series of operational and efficiency improvement initiatives across the organization which have started yielding positive results.
We believe there remains further scope to build on these improvements and this will continue to be an important area of focus in the coming year. As we speak today, the geopolitical developments in the Middle east continue to create uncertainty across global energy, feedstock and logistics markets. For the chemical industry globally, the impact is being felt primarily through volatility in crude, linked raw materials, freight costs, shipping availability and transit timelines. While the situation remains dynamic, we have been proactively monitoring developments and working closely with our suppliers, logistics partners and customers to ensure continuity and reliability of supply.
Our teams have responded with agility through calibrated inventory planning, diversified sourcing wherever feasible and tighter coordination across the supply chain. In response to the significant increase in raw material prices during the quarter, we revised our price upwards for the non contractual part of our business and from the present quarter for the contractual business. At this stage we see this more as a volatility and cost management challenge rather than a structural demand issue. The global tire and rubber value chain continues to remain operational and resilient, although near term fluctuations in input cost logistics may continue depending on how the geopolitical situation evolves over the last few years, including through the pandemic and subsequent global supply disruptions, we have built stronger operational resilience and customer engagement capabilities.
We believe these capabilities position us relatively well to navigate the current environment in a balanced and disciplined manner. Our teams are closely monitoring developments and working proactively with suppliers, logistics partners and customers to ensure dependable servicing and continuity. At nosil, our approach remains balanced and disciplined, focusing on safe operations, customer reliability, prudent cost management, agility in execution and calibrated price actions to ensure continuity of supply and operational stability.
We do this while continuing to advance our long term growth and value creation plans. That’s it. From my side, I now invite Mr. P. Sri Nivasan to provide an overview of our financial performance.
P. Srinivasan — President of Finance and Chief Financial Officer
Thank you Mr. Anand and good morning to everyone. So let us run through the consolidated financial highlights on the index parameters. Volumes for Q4FY26 stood at 150 considering a base of 100 which was Q1FY20 the 150. I think this is the second time in history we have achieved this is after four years, after 10 or 12 quarters. So we are happy to be in that level and we hope to build on this. Net revenue from operations for Q4.26 stood at 330 crores as against 316 crores in Q3 FY26. As far as the revenue from operation for the year under review for FY26 it was at 1303 crores as against 1393 crores in FY25.
For the quarter we recorded a 7% volume growth as compared to Q3FY26 and for the full year the growth was 3% as compared to FY25 coming to the operating EBITDA parameters. Operating EBITDA for Q4FY26 stood at 21 crores as against 27 crores in Q3FY26 with EBITDA margins shrinking marginally to 6.4% in FQ4FY26 partially due to rising cost in shutdown activities and also some inventory effect which has been seen in the stock change effect so which we can discuss separately. Operating EBITDA for the year under Review stood at 101 crores as against 137 crores in FY25 with EBITDA margin at 7.7% coming to PBT.
PBT for Q4FY26 stood at 21 crores as against 13 crores for Q3FY26 PPT for the year end review stood at 76 crores as against 114 crores for 525 coming to profit after tax. PAT for Q4FY26 stood at 17 crores as compared to 9 crores in Q3FY26 and PAT for year end review stood at 56 crores as compared to 103 crores in FY25. One of the reasons for lower tax in the previous year was because of the long term capital gains structure change in last year’s budget which impacted previous year’s tax credits.
Whereas in this year everything is in the normal tax rate. With this we would like to open the floor for question answers.
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 n1 on their touch tone 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. The first question is from the line of Nirav Jimodia from Annual Wealth. Please go ahead.
Nirav Jimudia
Yes sir. Good morning. I have a few questions sir. First is on the current situation. Like you touched upon the raw material cost increases and also on the contractual and non contractual part. So if you can help us understand like what’s the current situation in terms of imports of Rumber chemicals coming to India and based on your interactions with the customers, are the customers currently negotiating on the prices or they are more concerned about the volumes which they want to secure for their production.
So that is A and B, you said that we have increased the prices immediately for the non contractual customers. So like typically how our volumes are based in terms of the percentages between the contractual and the non contractual part.
V.S. Anand
Yeah. Thank you. Thank you Nirav. So yeah, so coming to imports, the first part of your question. Yes, we also see that there have been price revisions in the import. So that’s one sign that we are seeing due to cost increases that have gone up across the value chain. So coming to our own price increases, like I mentioned, the discussions with customers are positive but it’s always a combination of supply reliability and price. So given the current situation, the focus is also ensuring supply reliability because across the value chain there are continual disruptions.
And so that’s the response on that. The last part which was on what’s the kind of ratio, I would put it somewhere around 65 to 70% is contractual and the rest is usually non contractual.
Nirav Jimudia
So you touched upon the price revisions on the imports, but what is on the volume side so has those volumes seen a dip which could give us an opportunity to increase our volumes? How has been that situation in last one 1.5 months?
V.S. Anand
It’s still early days on that, but I would say we are continuing to see our volume positive development, especially since also importantly to be able to manage the supply chain to ensure that we can produce and deliver to our customers. So we’re still seeing a positive.
Nirav Jimudia
Correct. And Mr. Srinivasan said in his opening remarks that we are seeing. So like last Q1 of FY23, we have seen this sort of volumes which now have been achieved. So given the kind of volume run rate we have achieved in Q4 and taking let’s say FY26 as a year, we are already at 10% volume growth based on Q4 run rate. So if you can help us understand, or let’s say is there a sense of confidence within nosing that 4Q volumes can now become a base volumes? Given the spare capacity, what we have and the expansions which we have undertaken, how are you seeing these volumes getting built up on Q400 volumes?
V.S. Anand
Yeah, I think if you may recall, at the last call we had mentioned that we expect to be able to complete the year on a positive note in spite of the first half not going entirely along the lines we’d expected. And that did happen and that means that has been a momentum in the second half, especially on the volumes front. And we expect this to continue going forward. So we are quite positive that we will be able to build on this into the next quarters.
Nirav Jimudia
Alright, so can one assume 4Q volumes can now become a base given the kind of confidence we have in terms of customer approvals and the expansions, what we have done.
V.S. Anand
Yes, yes we can.
Nirav Jimudia
Perfect. The second question is on the realization part, like If I see last 17, 18 quarters, this was probably the lowest one. So when we had touched that peak volumes in Q1 FY 1023, that was an abnormal period of COVID times. And today also seems to be an abnormal time in terms of the lowest prices what we have seen. So where are we seeing our average realizations moving in between those periods? Like the best of the periods, what we have seen during COVID and worst of the times because now we have seen the pricing momentum also gaining traction.
And generally our observation is that during an inflationary trend we tend to gain more in terms of the gross margins part. So if you can share your thoughts here, where are we in terms of the current realizations and what one could expect from Nosil in terms of the expansion on the gross margin side.
P. Srinivasan
Yeah, Neera basically Srinivas here. So one of the things which has happened this in this quarter April always that the input prices went up and market also corrected the finished goods prices in relation to the input price rises. So that was one good point. A second question on your question is on that whether in an inflationary or in high price high cost regime, we tend to expand. I think it’s a very, you know, maybe you may have judged something based on past hoc record so it moves. But I think typically in a situation where India is not self sufficient, any industry which is depending on imports for to meet its requirement or the input requirement generally tend to get that advantage for a short period.
It’s not a big period but a shorter period because you need to cover little earlier because your lead type is much higher as compared to domestic procurement in to that extent you may get some marginal benefits.
V.S. Anand
Just to add, I think Srini mentioned it in the initial part and I just kind of build on that. So there were in this particular quarter there were some impact that actually is reflecting a lower EBITDA that is on account of inventory
P. Srinivasan
Change. So basically one of the things which is very important is in the inventory change. The inventory as per the accounting standard is valued at raw materials plus overheads. So you have a situation in a quarter where there’s a stock change debit, which means that debit includes some partial of raw materials and some portion of
Aditya Khetan
Overheads
P. Srinivasan
Of the previous legacy quarters that may come in. So typically if you maintain the inventory, if you maintain the inventory, that particular debit of extra 8 maybe in the 34 crores, 78 crores is there, maybe that would not be there. So had we maintained the similar inventory because in March we had to face some production cuts etc. Because of this, energy prices, etc. Had we not had that thing, probably we would have improved our EBITDA also.
Nirav Jimudia
Perfect, Perfect. And so last question from my side before I join back. How are we placed in terms of some of the critical raw materials specifically on the mines and mibk because some of the mines are available locally which were also facing disruption due to ammonia shortage while some are imported in India. And also on the mibk which is totally an imported product. So are we getting or are we sufficiently stocked up to four hour targeted production or let’s say the committed production which we have anticipated.
How has been the situation there?
V.S. Anand
Yes, so you’re right, there is like I mentioned, there is supply chain disruptions on account of Multiple factors. But until this point we have been able to secure supplies so that we can reliably deliver to our customers at least for the next few weeks. And horizon we see we are still in a good position for that.
Nirav Jimudia
Perfect. And sir, lastly congratulations on an excellent working capital management because when I see our cash flow statement we have been able to save close to around 170180crores on the working capital which is taken care of the capex is what we have done in FY26. So congratulations to the team. Thank you so much.
V.S. Anand
Thank you. Thank you.
Operator
Thank you. Next question is from the lineup. Nilesh from HDFC securities, please go ahead.
Nitesh Dhoot
Yeah. Good morning sir. Firstly to Anand. Sir, the first question is on the strategy you mentioned in the opening remarks. The company is optimizing between volumes and margin but volumes are going steadily up for the company while the margins are falling. Since Q3FY25 is company changing volume and compromising on margin. Your thought on this will be helpful to understand the company strategy. Sir.
V.S. Anand
Yeah. Thank you. Thank you. So clearly intention is not to compromise on the margins but to look at improving the overall consolidated. And there has been that positive uptick which we have seen. But I think like I said Q4 which Srini just explained is also due to some specific instance in the quarter. So. But I don’t see that. So but we are still in line with when we say it’s a mix between price and volume. Very clearly the intention is while the specific margin might drop because we have to get some additional volume, absolute overall number is what we are looking to increase with our available capacity.
That is clearly the direction and the strategy
Nitesh Dhoot
In Q4 volume growth. Is there any element of volume increase as customer want to keep some inventory level at their end so that their production remain steady. So is there that volume growth?
V.S. Anand
No. So we don’t see any significant overstocking that will spill into into Q1. I’m kind of reading between the lines of your question and trying to answer it. Yeah.
Nitesh Dhoot
And just one question on this expansion. So on brownfield expansion project at the hedge that you announced a couple of months back. So what percentage of this 130 crore capex will be spent on debottlenecking of capacity and how much volume you will add with this.
V.S. Anand
So this is largely additional capacities, not much of the bottlenecking.
Nitesh Dhoot
Okay. Okay. So. So okay. And whatever volume you are going to add will be consumed actively or it will be the merchant sales.
V.S. Anand
It’s much merchant sales. Merchant sales. It’s a Growth capex.
Nitesh Dhoot
Okay and answer on this lastly on this 250 crore capex at the Hage the overall capacity will be increased by about roughly say 20%. And when you are saying 20% volume increase is it the merchant sales volume or again it is internally consumed.
V.S. Anand
You’re referring to the 20% which means for the 250 crores the one. Right. So that’s all merchant sales. While just let me just clarify some part of the earlier the 130 we have announced has got a bit of intermediate also included but largely it is capital sales on that one. But your second question, it’s completely merchant sales.
Nitesh Dhoot
Okay so 130 just for my understanding 130 largely the captively consumed volume.
V.S. Anand
No, no not largely part. So it is related to part of the. The finished good that that will be coming out. For that whatever is required there is a part of it which will go into that. The intermediate. Yeah. And the the other 250 it’s completely.
Nitesh Dhoot
Thanks a lot sir and all the best.
V.S. Anand
Thank you.
Operator
Thank you. Next question is from the line of Aditya Ketan from Smith Institutional Equities. Please go ahead.
Aditya Khetan
Yeah thank you sir for the opportunity. So just a couple of questions. So just wanted to give you one perspective. When we look at the annealing prices history from July 2025 to around December 25 for that period annealing prices has been ranged quite well between 100 to around 112 rupees per kilogram. Thereafter for the last three months we have seen that 110 becoming 190 rupees per kilogram. So ideally any company which has around 1520 days of inventory keeping of raw materials would have benefited from that inventory gains.
But on the contrary we have not seen that benefit. Even after adjusting for the 7, 8 crore which you mentioned on the legacy cost the numbers still look on the lower side. So what should we judge? Like the inventory management is not proper of rm. What has actually happened? Like
P. Srinivasan
I think Aditya there are two challenges in the beginning of the year I think we mentioned we had a legacy cost inventories at the higher cost in the previous year where we had a plan of higher sales volume which we didn’t happen. So that spilled over into the first half of this year so that affected our costing in the first half. In the second half we got more of market cost etc. The larger challenge which has been for us is the spreads got narrowed down because one of our products was imported largely from FTA regiment where the protection which was there earlier in the form of basic duty the gut got wiped out and that impacted the bigger impact on the profitability.
So that is one of the key factors in this year which happened and that was very very significant in that sense.
V.S. Anand
But also coming to more recent quarters that should play out Aditya so I think surely whatever is in the pipeline should play out
Aditya Khetan
Because that FT has been now wiped out and that will remain obviously. So in terms of cost wise and do we see at a disadvantage?
V.S. Anand
No, it’s not at a disadvantage. I would say it’s just been a certain correction but there has been a certain normalization also in the last few quarters.
Aditya Khetan
So coming to add we have we know that so BGPR has announced some 40 rupees per kilogram duty and so this is applicable on roughly any sort of a percentage number. Sir, can you give on to how much product basket and coming to products also like that there also we are pending on anti dumping duty. Any thoughts are like on these three onto these three products how much is the duty and these two products upcoming what duty could be there and when the Finance ministry would give the final call. Any timelines on that?
P. Srinivasan
So first of all this is the recommendation from the DGTR after doing a thorough investigation which is the cautious judicial body that’s number one. Number two so far they have announced for TDQ and sulfonamides they’re yet to announce their findings for Pill Flex 13 and 483 which we are expecting anytime in the few months I think should come in the next month or two, one month or so that’s a deadline which they have internal deadlines which is already announced in the website. Now coming to the impact I think what we have shared with the investors at large is that overall we had about 40% of revenue getting impacted by anti dumping products.
So quantum of duty how much is approved by Finance Ministry that’s something it is a post factor. And the second very important factor is generally what we have seen historically and you can even refer to insurable sulfur case. Very specifically where you proposed a duty the exporters absorbed it. Then again you have to see what is the net effect to the industry. So those are all subsequent even which will analyze and we will take a call and only we can derive the approval time for the central government is about generally 90 days so we expect somewhere around middle of June the their viewpoint.
Aditya Khetan
Thank you for that. So now coming to when we look at the anti dumping duty history from 2014-19 sir at that time we have seen like no spreads have peaked out around 65 rupees per kilogram into this cycle. Suppose if the spreads are. Suppose if this anti dumping duty is imposed what sort of a number sir we can look at the peak and considering a five to six year. Considering a five year from now on from today how you see numbers of north sale and spreads and volumes moving out considering if 80 days in post
P. Srinivasan
It’s premature to procurement on that. I think that let’s let the final decision come then we can and see the reaction how the foreign competitors adopt then we’ll take a poll.
Aditya Khetan
Just one last question coming to this quarter. So obviously like sir taking a history of the last two years this quarter numbers looks quite poor and Anand sir has also reiterated since last four or five quarters like every quarter we have stated like this is the bottom this quarter. Sir, any thoughts? Like you see so this pain to be continuing or again like we are saying like this could be the bottom here.
V.S. Anand
So like I mentioned there is there is an uptick in pricing and we should see this playing out in the coming quarters.
Aditya Khetan
Got it. Thank you.
V.S. Anand
I think clearly there is a strategy in a long term view in terms of how we want to scale the business. So there are also many other measures that we are taking internally in terms of our competitive intensity and what we need to do on our efficiency. So there are several other measures. So it’s not only dependent on one of these external measures.
Aditya Khetan
Got it. Thank you sir for that explanation.
Operator
Thank you. Next question is from the lineup Hershel Parek from Equitas Capital. Please go ahead.
Harshil Parekh
Hi. Thanks for the opportunity sir. I think in last two, three years us EU and the US were planning to ban six PPD rubber antioxidants due to its toxicity on aquatic life. And the author started some investigation on that. So can you throw some color on this investigation?
V.S. Anand
Yeah, this has been a finding which started in California and so there is a discussion in terms of the aqua toxicity of this large largely used product which is largest rubber chemical used the most reliable rubber chemical from a safety point of view. So it’s still there are discussions and all players are looking to find an alternative including us and we are working on it. But it is still some time away. There have been some new alternatives that have been announced but they are still in trial and testing stages.
We must remember it’s a very large volume product so the time will also be required will be large because apart from the testing and the assurance on safety the execution of these products also will take time. But that is an ongoing topic.
Harshil Parekh
Well sir, on A worst case scenario basis. Are we ready with the alternative products? As such,
V.S. Anand
We are also in advanced stages and we have got full teams dedicated working on this.
Harshil Parekh
Sure, sir. Next question would be on the quantum of price hikes that we have taken in March due to, you know, RM inflation. So can you just throw a tentative quantum of price.
V.S. Anand
It’s just kind of. It’s a dynamic situation. Harshal. Yeah, but like I’d given a direction. That’s the way it is. Yeah.
Harshil Parekh
Okay, so the last question is, can you just give the volume and value mix between domestic and export for this year?
Nitesh Dhoot
Just one second please. Let’s just check that.
P. Srinivasan
In terms of volume, 70% is domestic, 30% is exports. In terms of value, probably 60, 40. Sorry, it could be 67.3 or something. My mistake. 67 33.
Harshil Parekh
Thank you. Thank you so much.
Operator
Thank you. Next question is from the line of Nitesh Dhoot from Anitrati Institutional Equity. Please go ahead.
Nitesh Dhoot
Hi team, good afternoon. Thank you for the opportunity. My question is on. On the demand uptick, you know, in the domestic market that would have been on the back of GST and you know, the tire growth as you mentioned, but there would be an element of higher sourcing with respect to the ADD that’s likely to be implemented. I mean, do you see the customers raising the enables in anticipation and is it, you know, likely to slow down, slow down the volumes after the ADD actually gets implemented? So while I do understand that there may not be overstocking on account of West Asia crisis, but anything in anticipation of ADD is what I wanted to know.
V.S. Anand
No, Nitesh, we haven’t observed such a situation. Not that. Yeah, we’re not seeing it. And I think the. Like you rightly said, the current situation is also not kind of been very conducive for that.
Nitesh Dhoot
Right. So can you clarify on how much has been the domestic, you know, industry volume growth and much has our market share moved in the last quarter?
V.S. Anand
Yeah. So I think surely by, I think so clearly the volume growth we should have at least by close to 100 to 150 basis points improvement. Should have been there.
Nitesh Dhoot
Okay. Okay. And so on the price increases that you mentioned for the non contractual position, which month did we exactly take this, you know, price hike? Because when we see the blended realization that shows a decline of 2% sequentially. So which month did we take it in? March or probably that would have happened in April.
V.S. Anand
Now you would not see it so much in the, in the. Just the quarter gone by because a lot of it started playing out. That was not in the early part of March and it was more towards the second half of March. So very few days in the, in the quarter and in the year but more it’s in the, it’s in the upcoming quarter.
Nitesh Dhoot
Understood. And just one last maybe on the age expansion that was, you know so when the CAPEX was announced the margins were in, you know in like 13, 15% range. Currently around 6, 7% EBITDA margin probably. I understand that it, this is not a sustainable number. I mean we probably will be moving higher and there’s a 250 crore incremental capacity. So your internal IRR assumptions and the investment thesis, has there been any change around that?
V.S. Anand
Not significantly. We are quite positive like we said also that we’re looking to improve the EBITDA numbers through different measures and also with the production from the hedge we should see further improvement and better operating leverages there.
Nitesh Dhoot
All right, thank you so much sir for answering the question. Wish you the best. Thank you.
Operator
Thank you. Next question is from the line of Sajal Kapoor from NP Fragile thinking. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. I’ve got two questions. First is as approvals and customer qualifications are becoming increasingly important, right. I mean how do you measure the stickiness of your customer relationships today versus let’s say three to five years ago?
V.S. Anand
So if you look at our present always been present with all tire companies, not only domestic but also internationally for many years. What I would say in the last three to five years is it’s been more a deeper penetration with our international customers especially with the additional capacities that we have brought on screen in the last few years and with all the approvals and the increased volumes that we have got with also the ability to prove our supplier reliability and with the trust that we have gained, it’s significantly, the stickiness needle has significantly moved over the last three to five years.
Unidentified Participant
So price alone is not the only criteria. There are other factors that customers consider before deciding on the sustainability of the relationship. Is that understanding correct?
V.S. Anand
Absolutely. While price is critical but it is not everything. That’s why we need to prove our capability, our ability to supply reliably in quality and also during difficult times. So I think these are also other criteria that our customers look at. Thank
Unidentified Participant
You. And the second question is if this anti dumping protection does not materially improve industry pricing, can nosil still structurally improved improve margins through a combination of mix efficiency and specialty growth alone?
V.S. Anand
Yeah, so I think that that was, I was just alluding to it a little while ago in the sense that we have to be of part prepared for all scenarios and we have to work towards that and we are building on that. So there is both internal measures to enhance at the same time consolidate and see what we can do at the same time. In the product portfolio front also we are looking at how do we enhance the product mix. So it’s a combination of both as well as geographical expansion at a quicker pace.
P. Srinivasan
So some of it is already getting reflected in the financials. For FY26 in terms of the other expenditure if you see there is a reduction of 18 crores or 20 crores. So these were the efforts which we undertook to optimize cost, to control cost very differently, look at various aspects of business operations and critically and try to see how best we can optimize it. So those efforts are seen in the results in terms of I would say this controlling cost. Second is the working capital management. We try to make an improvement in working capital management and that also gets reflected in the non operating other incomes.
These were some initiatives which we already took which is already reflected in FY26 results. Going forward we have several other such initiatives to work on that.
Unidentified Participant
Sure, sure. Thank you so much for answering my question. Thank you.
Operator
Thank you. Next question is from the line of Pelesh Raja from 361 Capital. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity sir. In this quarter excluding raw material cost there has been healthy improvement in the conversion cost. So could you please elaborate on in which area where we have seen there is a good cost saving. Additionally for FY27 you know which specific area that we are being targeted under the cost reduction initiatives. Also further company had announced performance linked ESOP allocation. So could you highlight the area that we are still lagging versus its initial targets and what are the measures that we are taking to improve those performance.
V.S. Anand
So I’ll request Srini to take the first part and then I’ll come to the last question.
P. Srinivasan
I think Shailesh, we looked at. I think I just said to the previous participant who raised the question. So there are some measures which we took on utilities which improved the overall expenditure or reduced the overall expenditure for 1011 crores. There were some extensions on maintenance which we worked on hard and try to see how best we can structure that and that also we reduced during the year. So I think on utilities and operational, other expenses, export etc. We try to control it. That’s one.
There are, there are other administrative aspects also which we need not have small, small item aggregating to significant amount. But there was every team task force formed to look into the areas and to see how best we can optimize at the same time on a capital employed for the business. That was a working capital management. If you see the large part of working capital management happened in inventory so that we could get something. Of course some inventory went further more than what we expected.
So some corrections will happen. But what nonetheless we made a fundamental shift in terms of how to serve the customer with the least amount of capital employed is what we were looking at. So this releases the cash and this enables us so to an extent the entire capex this year for largely financed out of internal working capital efficiency more than we. Thus the investment surplus which was there at the beginning of the year last we retained in fact on the contract it has increased. So that enabled us to manage the things better efficiently.
Now the other part I think I will leave it alone,
Unidentified Participant
Sir. What about the next year, sir, how much you are planning to reduce it? Say with the similar volume, 55,000 tons. Say today the conversion cost is 100. So how much we can able to bring it down?
V.S. Anand
Yeah, so clearly the direction is to. There are quite a few initiatives which are underway and they should start coming on stream. We expect it to improve further on the absolute conversion per kilogram so that we see see it to go down further. No, there’s not a specific number that I can give you at this point in time. There were other initiatives also in the SND area which is also reflected in the other expenses. So that’s also something that has given us a positive fillip. Coming back to the last part which you mentioned.
Yeah, so we had clearly our metrics were along the lines of profitability and volume growth. So we are a bit behind as far as what we are set out to do. There are significant measures internally which we had taken. So a combination of external environment has also played a role. But we are kind of really creating a roadmap to see how we can get back on track on that front.
Unidentified Participant
Sir, one last question. We had installed capacity of 115, 15,000 metric ton. So that time our effective capacity was 80,000 tons. Now the installed capacity has increased to 1 38, 1 39,000 tons. So what is our effective capacity? And also we have announced, you know, that 130 crores of capex. So what is the number that you are looking for both installed as well as the effective capacity?
P. Srinivasan
So the first of all the new capacities trial production is on. So let it come commercial. As far as 115. We have never said 80 or 75 anywhere. There is a ballpark of 65%. 35% is what we do. We don’t give the specific numbers for business sensitivity. As far as the 130 crore project is concerned, we will let you know as we get into the advanced stage of project completion.
Unidentified Participant
Okay. With the commissioning of new capacity, incremental capacity, do you see the fixed cost absorption would be low in this year or do you think the ramp up of capacity will happen faster?
V.S. Anand
So there could be some initial uptick in the stabilization, but overall it will as the plant stabilizes and operating leverage on the site. Because we already have the other utilities and everything else on the side.
Unidentified Participant
Okay, thanks.
Operator
Thank you. Next question is from the line of Nirav Jamodia from Anvil Wealth. Please go ahead.
Nirav Jimudia
Yes, sir. Thanks for the opportunity. Sir, one question. On the export market, like specifically on the Europe and other parts of Asia where we are currently exporting, how has been the situation there in terms of the disruptions at the plant in Europe and other parts of Asia which could provide us some opportunity in the short term to export our volumes there?
V.S. Anand
Are we seeing any
Nirav Jimudia
Traction in terms of the improved sales volumes to these geographies?
V.S. Anand
We’re not seeing any significant deviation. It’s not too much positive or on the negative side, it’s pretty much quite stable. There are those ongoing interruption due to transit timelines and things like this and freight costs. But I would say from a from a volume volumetric requirement point of view, there’s not been any significant difference that’s playing out. Yes.
Nirav Jimudia
And the last quarter you informed us that USA where the duties were on a higher side, which were then subsequently reduced, our volumes were affected by close to around 50%. How has been the situation there in terms of those improvement in USA volumes?
V.S. Anand
Yeah, so that is moving up like we had mentioned also. So that’s a positive development and we are seeing that. So I think it normally takes some time before supply chains can kind of adjust to any change of this sort. But we are seeing it in the positive direction and we should see it gain traction in the, in this coming year.
Nirav Jimudia
Correct, sir. Also your thoughts on the latex market, like has those volumes to the latex market improved in Q4 or how do you see FY27 panning out so far as the latex volumes are concerned?
V.S. Anand
So latex volumes last year there was a bit of disruption due to all the technical tariff back and forth that happened in the initial part of the year, but it has been quite stable. In terms of production, there is increased competitive intensity from Chinese players in that market. But I expect for this year it should be stable barring any significant disruption.
Nirav Jimudia
Sir, you mentioned that like we are already in the process of sending the samples for our expanded plant to the customer. So typically based on your experience with the earlier expansions and the customer approvals time cycle, when can we see a material improvement in or material capacity utilization uptick coming from our newer expansion coming off?
V.S. Anand
Yes. So usually we expect the non tire based business to start much earlier whereas the tire based customers will take the time on the approval. But we are in engagement to see how we can speed it up. So I should expect that it should take about six to eight months by the time we see results attraction or from from a larger customer.
Nirav Jimudia
And so last question from my side is like since on an indexation basis we have already touched 150 levels so 1A on the operating leverage part, what is your internal assessment in terms of the real benefit of operating leverage coming up? So let’s say can the indexation of 160 a benchmark where we would start seeing some sizable improvement in our conversion cost? What’s your internal assessment about the indexation levels where we start we can start seeing those operating leverage benefits.
V.S. Anand
So I think I tried to kind of consolidate it when I mentioned last at the last call that we are looking to improve our EBITDA from the base of financial year 26 another 150 basis points going forward. So this will all kind of kick in into that.
P. Srinivasan
So any volume growth is going to have operational leverage benefit. Definitely there that’s well understood.
Nirav Jimudia
The last thing from my side sir, on the newer products which on which we were working and you have informed us in the earlier calls also that we could see the volumes coming from those newer products in FY27. So where are we and out of the volume growth which we are expecting in FY27 how much of the volume growth could be contributed by this newer products?
V.S. Anand
So yes we do expect to gain higher volumes and traction on those new products. So I would still see that financial year 27 it will still be in a pickup mode, might not make a significant impact on the overall volumes but gradually moving towards the end of the year we should start seeing more volume uptake. Not able to give you a specific number Neera at this point.
Nirav Jimudia
Perfect sir, thank you so much and wish you all the best.
V.S. Anand
Thank you. Thank you.
Operator
Thank you. Next question is from the line of Praveen Kumar from Equitas Capital Advisors. Please Go ahead.
Unidentified Participant
Yeah. Hi, thanks for the opportunity. I had a couple of questions. The first one was on the imports of antioxidants. If I look at the overall import data, it looks like in the January, February, the first two months of the year, on a yoy basis, volumes of imports, antioxidants picked up significantly. So could you throw some light into what could be the positive factors behind this?
V.S. Anand
You’re talking about January to January of this year?
Unidentified Participant
Yeah, January this year compared to the Jan Feb of the previous year.
V.S. Anand
Yeah, so I also see that potentially also like we said, some of it has come through the Thailand and Korean fta. But overall also there could be have been a slight uptick because the overall demand in the market per se is also on the positive side.
P. Srinivasan
So basically what has happened is you have a situation where the domestic demand is expected to grow at 7% as per ICRA estimates. So when you’re looking at a 7% consumption in India and rubber, incidentally, India is the second largest consumer of rubber consumption as globally then we have surplus usa. So given that background, you could have seen customers importing more from the FTA road, it is coming up cheaper and stuff like that.
Unidentified Participant
So do you expect that to persist or is there some corrective action or something that can be done on that?
V.S. Anand
No. So on the FTA front we are kind of highlighting to ensure that the value addition is within the norms of the FTA and we are highlighting it and it’s been taken up at this point, but no specific outcome at this, at this point in time.
Unidentified Participant
Understood. And the second question was on the global rubber consumption chart that you present.
V.S. Anand
So
Unidentified Participant
Just going through that. So from again, if I look at it in two parts, right, one is let’s say a 2013-2018 kind of a time period during the time it went from 25.5 to 29.3, which is like a roughly 5.7% kind of a CAGR increase. Right now if I shift my focus to let’s say 2022 till 25, the last three odd years there, the growth rate, you know, went from 29.4 to 31.9 as per your data, which is more like a 2.8% kind of a CAGR. Just wanted to understand what do you think are the reasons for almost more than halving of the growth rate which the overall industry was growing at.
So could you throw some light into this and how do you see this panning out?
V.S. Anand
Yeah, so one, if you really see another layered information on this, more of it is also In Asia, the growth is much more stronger in Asia compared to the western markets. So while globally also due to the continual disruptions that we have had in the last few years. And that’s also played out at a lower growth rate. But I see overall we typically take about 2 to 2.5% growth. That is a safe number to achieve on a medium to long term CAGR basis. So anything about that sometimes is really not very realistic.
Unidentified Participant
So basically you’re implying that the 2013-18 kind of a growth rate which happened at the broad level that was kind of more unusual and this 2.83% or whatever, 2.5 to 3% is more realistic growth rate.
P. Srinivasan
That’s what we always also use. That is a parameter we use for even for our evaluations of future demand scenario.
Unidentified Participant
And just, just to again go back to that, my earlier question on you know, the imports picking up in the first two months of this year is there. I mean we also noticed that you know, in one of your large Chinese competitors, the largest one in their, one of their recent calls they had alluded to Indian players putting up capex. Probably they were different to you. I guess so I’m just wondering that is it also maybe I mean given that your most, you know, recent CAPEX is the one which is going to come on stream is also for antioxidants, is there a likelihood aggressive and you know, before you start, you know, commercializing your capacity.
V.S. Anand
There is always a certain capacity to hold inventory, right? So I don’t think so. I don’t see that as a major impact on account of us coming up with the capex.
Unidentified Participant
Okay, understood. Thanks. Thanks for the response.
Operator
Thank you. Next question is from the line of Aditya Ketan from Smiths Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you sir. For the follow up. Sir, my question is onto the specialty segment. Sir. I stated that this capex of 130 crore will come largely into the specialty side. Just recalibrating some numbers. If you can prove what is the specialty segment mix as on FY26 and what are the volumes or utilization level like this segment is working on? And with this capacity coming in by FY28 I suppose what sort of capacity addition are we looking at into specialty side and what is the demand outlook into this segment into the export market?
If you can just highlight on this,
V.S. Anand
By and large when we look at the whole the sector that we operate typically we have a slightly higher, higher skew towards the specialties than what the industry reflects. That is why the industry Reflects a single digit spread on the specialty versus the non specialty we would be at about 15% and I think with this we should be able to go to 20% is what our expectation.
Aditya Khetan
20% mix post commissioning of the capacity and reaching peak utilization level. So we can reach 20%.
V.S. Anand
Yeah, that’s right. That’s it. Because again volumes are not typically very very high.
Aditya Khetan
Got it. Okay. The specialty segment is like focused on which particular end users and which particular geographies like US Europe, any sort of mature markets versus emerging markets where it is specifically used.
V.S. Anand
It’s across all the. All the markets.
Aditya Khetan
Okay, got it. Sir, coming to the question on the higher imports in this quarter sir also we have seen many times like before any anti dumping duty comes in. Generally customers looks to stock up inventory right before this announcement and try to mitigate some of the higher cost which when post anti dumping duty whatever is there. Are you seeing this trend to playing out and this is leading to higher imports or general. You see because any sort of a change why imports have suddenly spiked up.
V.S. Anand
So yeah, there was a question earlier on this also While I said that there could be a tendency in inclination we have not seen it so much Also due to the fact that the current situation has not been so conducive towards that. So there could be pockets of it here and there but by and large due to the environment it is not played out to that extent because it’s still at this point DGTR is still only a recommendation.
Aditya Khetan
Just one last question Onto the volume growth for FY27 and 28 sir, what sort of numbers are we looking at?
V.S. Anand
Sorry, come again please. I just could not show you that. Yeah,
Aditya Khetan
Onto the volume growth guidance like what numbers are we looking at for FY28 and 27 in terms of growth? Jasper?
V.S. Anand
Yes, so we are looking at double digit growth in terms of volumes. That’s a target for the coming years. Yeah,
Aditya Khetan
Got it sir. Thank you.
Operator
Thank you. Next question is from the line of Kanvi Varikar from Anantarati Institutional Equities. Please go ahead.
Unidentified Participant
Hi team. Thank you for the opportunity. So we have a 220 crores of CWIP in FY26. So going forward how much of this comprise of the project debt and what will be the cost of debt in one direction.
P. Srinivasan
So as of today we have not borrowed any debt. We are having some lines about 100 crores from the bank but we are able to utilize it. It depends on that and it is repo linked interest rates
Unidentified Participant
So nothing that is in the cwip right?
P. Srinivasan
No, no, so far nothing is there.
Unidentified Participant
Okay, thank you so much.
Operator
Thank you. Next question is from the lineup Nilesh Kuge from HDFC Securities. Please go ahead.
Nitesh Dhoot
Yeah my question is on anti dumping duty sir, but what we have observed that in an inflationary scenario Finance Ministry lastly reluctant to approve anti dumping duty though there is a recommendation from from Commerce Ministry. So it’s the things that happen for our products. So what are our plans to expand margins and how we are related to that?
V.S. Anand
Yes Nilesh, again I think one of our earlier people on the call participants did ask this question. I think it was Mr. Sachin and yeah, so there are plans. So like I said we look to. There’s a lot of cost efficiency measure improvements that are ongoing within the organization at our manufacturing sites and we expect expect that will also positively play. There is also product mix areas that we’re looking at as well as the geographical expansion is also another area. So there are multiple actions in place that we are looking at.
Nitesh Dhoot
Okay. And secondly to Mr. Sini what are the tax rate guidance for FY27? Any reduction there because of this new plant commissioning and the revenue coming from that?
P. Srinivasan
No, no specialist normal tax rates.
Nitesh Dhoot
Oh thanks. Thanks a lot.
V.S. Anand
I just wanted to kind of. Thank you. Thank you Nilesha. So I think there were two questions again on this improved volumes from both Aditya and Praveen on the increased volumes which were coming in through the import. So just one of my colleagues just mentioned that towards the end of the year typically you see this where some of the importers tend to use the advanced license and there is always a chunking up of it during the last quarter. That’s potentially one reason. I just thought I’ll add to that question because it came up twice.
Thank you. Thank
Operator
You. Thank you. As there are no further questions from the participants I now hand the conference over to Mr. V. Sanan for closing comments. Over to you sir. I’m sorry sir, we are not able to hear you if you are speaking.
V.S. Anand
Thank you. Thank you everybody for your time and we appreciate that you could be here today with us. I hope we’ve been able to address all your queries. For any further information, kindly get in touch with any one of us or strategic growth advisors or investor relations advisors. Thank you once again and wishing you a very pleasant day ahead. Thank you.
Operator
Thank you very much on behalf of Nozill limited That concludes this conference. Thank you all for joining us today and you may now disconnect your lines.