PCBL Chemical Ltd (NSE: PCBL) Q1 2026 Earnings Call dated Jul. 23, 2025
Corporate Participants:
Unidentified Speaker
Kaushik Roy — Managing Director
Raj Kumar Gupta — Chief Financial Officer
Analysts:
Unidentified Participant
Sanjesh Jain — Analyst
Aditya Khetan — Analyst
Presentation:
operator
It. Sam it. Sam. It.
operator
Ladies and gentlemen, good day and welcome to the PCBL Chemical Limited Q1FY26 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Sanjay Jain from ICICI Securities. Thank you. And over to you sir.
Sanjesh Jain — Analyst
Thanks Vishakha.
Sanjesh Jain — Analyst
Good afternoon everyone. Thank you for joining on for PCBL Chemical Limited Q1FY26 results conference call. We have PCBL Chemical Management on the call represented by Mr. Kaushik Roy, Managing Director, Mr. Raj Gupta, Chief Financial Officer, Mr. Anand Kumar, Group Head Investor Relations and Mr. Pankaj Kedia, leading Investor Relations. I would like to invite Mr. Kaushik Roy to initiate the call with his opening post which we will have a Q and A session. Over to you sir.
Kaushik Roy — Managing Director
Thank you so much. Good evening ladies and gentlemen. A very very warm welcome to each one of you and thank you for joining Q1FY26 earnings conference call of PCBL Chemical Limited. Today we’ll be discussing our business and financial performance for the quarter in details. I hope that you got a chance to review our financial results and the investor presentation which is also available on stock exchanges as well as on your company website. Before we begin, I would like to express my sincere appreciation to all of you for taking the time to join us today and for your continued interest and support in our journey.
Amid rising global uncertainties including the Iran Israel conflict, India Pakistan tensions, Red Sea disruptions and escalating tariff risk from USA macroeconomic pressure continue to affect global sentiment while intensity of dumping into India market has moderated but remains at somewhat elevated level. This is reflected in the pricing environment. Despite this backdrop, PCPL Chemical delivered a steady and stable performance in Q1 marked by volume growth across all key business segments. We remain confident in our ability to navigate the prevailing volatility in business environment and strengthen our competitive edge in the evolving global landscape. The global tire industry is undergoing a structural shift with manufacturing steadily moving towards cost efficient hubs like India.
Driven by the need to optimize cost and enhance supply chain resilience. Also, as higher tariffs have been imposed on some of the key tire exporting countries, India is well positioned to increase its export share. Recently, one of our major one of the major global carbon black producers announced the planned closure of few of its production lines in Europe and North America by the end of this year. This development further underscores the shift in global manufacturing dynamics. It also provides India an opportunity to capture larger market shares in the global trade of carbon black. This is likely to be beneficial for PCBL in the long run and as we add capacities in India, the tire sector is witnessing steady growth supported by oem, expanding retail market and strengthening of export demand.
As the world’s third largest tire market, India continues to play a pivotal role in in the global supply chain. ECBL remains strategically aligned to this momentum backed by its scale, specialty offerings and commitment to innovation and reliability. KCB it is rapidly expanding its capabilities via customized offerings and continued innovation, particularly in high performance applications like battery chemicals and energy storage. With tightening regulations on export of new age battery technologies from China, we are seeing a natural shift in preference towards alternative and reliable sources. Our upcoming nanoware facility is well positioned to offer advanced solutions to meet the growing needs of both domestic and global customers.
The pilot plant is expected to be ready by the end of the calendar year post which the sampling process will commence. We are encouraged by the strong level of interest from the partners across the battery value chain, reinforcing the potential of this new segment for pcbl. Recently we have been granted a process patent by the US Patent Office on our proprietary method of developing nanomaterials designed for next generation energy storage technologies. This breakthrough patent represents a significant milestone in our R and D efforts and strengthens our intellectual property portfolio in the energy storage domain. The grant of this patent not only validates our technological innovation but also opens new avenues for strategic partnerships, licensing opportunities and potential commercialization in global markets.
The technology transfer process for our upcoming acetyl expansion has been successfully completed. This quarter we have started detailed engineering work for setting up India’s fast Acetylene Black capacity. This has applications in high voltage cables, batteries, semiconductor packaging, conductive plastic and paint and coatings and it is drawing strong interest from the partners across value chain. Currently, India is 100% dependent on import of Acetylene Black. Once PCBL facility is ready, we would be well positioned to meet the domestic requirement and serve the global customers. We believe development will have a significant positive impact on the company’s long term growth prospects and aligns with our vision to be a leader in sustainable energy solutions.
Now coming to carbon Black projects, the first phase of our brownfield expansion of 30,000 metric ton per annum at PCBL Tamil Nadu has commenced trial runs and will be commissioned in next few weeks time. The second phase comprising an additional 60,000 metric ton per annum along with 12 megawatt green power capacity will be commissioned by the end of this financial year. We are in the process of completing the acquisition of 116 acres of land at Naidu Petta in Andhra Pradesh for a greenfield carbon black project. This new facility will focus on producing rubber black performance chemicals as well as performance chemicals.
CAPEX at this site is expected to commence once we obtain environmental clearance in this year. We are also planning to set up a new line of Specialty black of 20,000 metric ton per annum capacity which is expected to be ready over next three to four quarters. This would take our total specialty block capacity to one 32,000 metric ton per annum. This line will be coming up in Mundra. Capex activity is going on for 1000 metric ton per annum specialty block capacity dedicated for superconductive grade and as expected will be completed by the end of FY26 in Palh.
We are on track to achieve our targeted capacity of over 1 million tonnes by FY28. This provides a good visibility of consistent growth in our carbon black business with an improving margin profile. PCBL anticipates continuous growth in international sales volume over next few years driven by expansion into new geographies, strategic investments in supply chain capabilities, moving up the value chain and the launch of new specialty grades. The demand for specialty black continues to be steady over the last decade we have seen we have been focusing on developing newer grades with varied applications in plastic pigments, ink, paint and coatings as well as conductive applications.
We continue to expand our product portfolio, enter newer geographies while moving up the technology curve. Now coming to Aquaform chemicals, the initiatives taken in last few quarters have started yielding benefits and is setting a strong foundation for accelerated growth in coming years. We are focusing on expanding our business in us, Latin America, Europe and Middle East. Corresponding increase in capacity, product development and supply chain capabilities have already been undertaken. We are also working on end to end integration of the three business segments detergents, oil and gas chemicals and industrial water treatment chemicals with focus on opportunities for cross selling across business segments and higher capacity utilization.
Aquaform chemicals expansion projects are on track and nearing commissioning. We have commissioned capacity of 11,500 metric ton per annum to produce polymer at Mahat plant. We are also working on debottlenecking as well as ground credit projects both in India as well as us. We plan to commission additional capacities for PBTC, Reinfelite, Acetyl Chloride, Granulations, Amines, Imidazoline in Q2FY26 EcoAform is on track to deliver strong growth in FY26 versus FY25 with focus on new product development and capacity growth for the existing portfolio. PCB has established a resilient and far reaching global footprint supported by a seamlessly integrated manufacturing and distribution network.
As the company scales into high margin high growth segments, it continues to demonstrate discipline in capital allocation and agility in responding to evolving demand cycle. Coming to the quarterly performance PC Bill continued with a steady performance in challenging macro environment. During the quarter our consolidated sales volume in carbon bag business increased 2.6% quarter on quarter to reach 1.54093 metric ton. This translates into a capacity utilization of over 97% during the quarter. In eco firm business our sales volume increased by over 9% year on year 26,523 metric ton during the quarter. Consolidated revenue from operations during the quarter was rupees 2114 crore.
Consolidated EBITDA increased by around 2.5% quarter on quarter to rupees 320 crores. PBT stood at 120 crore while the PAD stood at rupees 94 crore. EBITDA for metric and carbon black business stood at 17,791 of the total carbon black sales volume. Domestic sales volume stood at 89,606 tonnes while international sales volume stood at 64,487 tons in in Q1 FY26 which is 2% year on year growth. Moving on to our segmental performance tire accounted for 91,140 tonnes. Performance Chemical reported sales volume of 46,888 tonnes while specialty sales volume was 16,065 tonnes. With this our specialty contribution in volumes has reached over over 10% from less than 1% in the year 2015.
We expect this share to continuously ramp up over the next few years. We continue to expand our product portfolio and customer base. Aquaform Chemicals reported a steady performance during the quarter. Q1FY26 revenue stood at 382 crore with an EBITDA of Rupees 50 crore. Under aquaform the detergent accounted for 9,419 tonnes. Oil and gas reported sales volume of 8,501 tonnes. Industrial water treatment accounted for 3,944 tonnes while remaining 4,660 tonnes pertains to other segments. During this time we also achieved the highest ever power generation and sales volume during the quarter. Power Generation increased by 11% year on year from 194 million units to 215 million units with an external sales volume growing by around 14% year on year to 132 million units as against 116 million units in in Q1 FY25.
PCBL’s transformation into a multi chemistry platform reflects a clear intent to deliver science driven, scalable and sustainable solutions across high impact sectors. With offerings that span traditional performance materials and emerging specialty chemicals, the company has created a portfolio that is both diversified and future ready. This diversity enables ECBL to address varied customer needs across mobility, industrial processing infrastructure, water treatment and energy storage while reducing concentration risk and enhancing profitability. With this I conclude and open the floor for your question. Thank you so much.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shailesh Raja from BNK Security. Please go ahead.
Unidentified Participant
Thanks for the opportunity sir. My first question is in the rubber carbon black segment. Our next pricing cycle negotiations are scheduled to begin in the month of August with the rate spike set to take effect from October months. Considering the uncertainty around the U.S. potential tariff and the elevated inventory levels and the customer yield, there is likely to be a pricing pressure. So how do you see this scenario playing out in the near term.
Kaushik Roy
Steve.
Kaushik Roy
At this point of time, you’re right, there is some strong headwind and also there is a lot of uncertainty in the market. As such, the economies were not very strong and on top of that the uncertainty got created because of the US Mr. Trump’s initiatives. What is going on at this point of time? So headwind is definitely very strong, but at the same time, and we know that this might have some impact on the pricing, but at the same time you need to understand there are markets where supply is less than demand and US Europe are examples for that.
So there will still be opportunities in this market. There will be imports coming into this region for sure from Asia. So we will be looking at that opportunity. As far as specific to the pricing, of course it will depend on when we finally get into a discussion and negotiation and what is the situation, economic situation at that point of time and at the same time by that time, hopefully there will be more clarity on the tariff side. All those clarity is there and we have got another two, three months time before we get into a final negotiation with these all big tire companies across the globe which will be effective 1st of January next year.
So that will continue. But the other thing is as an organization we are also to kind of take care of the situation in terms of performance. We are taking a lot of initiatives internally which are in our own hand in terms of improvement in efficiency across all functions, trying and improving our working capital management so that overall the organization performance strong financial. So this is our strategy and at the same time we continue to grow and be ready for future because we are quite confident and optimist optimistic about this that eventually the market will come positive going forward.
Maybe it will take some time, but we are quite, quite positive and optimistic about it.
Unidentified Participant
For the whole year, can we maintain this 1718 rupees per kilogram EBITDA and.
Unidentified Participant
Yes, you are now.
Kaushik Roy
Sorry, you are saying something, we are not able to hear you. Please.
Unidentified Participant
Yeah, you can hear me.
Kaushik Roy
Yes, now we can hear you.
Unidentified Participant
Yeah. For the whole year can we see this EBITDA schedule to be maintained at 1718 rupees per kg.
Kaushik Roy
As I said, you know, I don’t want to give you any guidance for this but as I said that there’s a lot of focus internally in the organization for improvement in efficiency and I’m quite hopeful that will bring a lot of value on the table. So can’t give you a number or a guidance. But yes, we are positive. Why should only talk about maintain. Maybe at some point of time we’ll talk about improvement from here on.
Unidentified Participant
So my second question on the exports trend. So our volumes to Europe and US that has grown significantly in last three years from 9,000 tons to 85,000 times. So with increasing consolidation in the global carbon bank industry, how do you see our mix going up in next point two years? Given the current exports contributing it is around 41%. Right, sir. Of the overall volumes, how do you see that mix going up? And within US and Europe today it is around 35% of overall exports. How do you that needs to go up in the next two, three years.
Kaushik Roy
Again I will not put a number how much it will go up by, but I can generally tell you about our strategy. As I said that we’ll be continuously growing in all segments value added as well as our regular rubber blacks right now in regular rubber blast. As you already know that in India the supply demand situation is in favor of the customer. In favor of the customer because Supply is almost 1.8 billion tonnes whereas demand is just about 1.1, 1.2 so India should be looked at as a manufacturing hub for the globe. And we are already a very strong player in India.
We are the leader, we’ll continue with our leadership. But at the same time the further major growth will come in the international market where there is a lot of headroom for us. The market share of PCBL there is not as high as what we have in domestic market. So naturally there is a lot of headroom over there. We are looking at the international market as the growth opportunity for us, entire Asia, European Union as a whole and of course USA subject to the tariff situation doesn’t go out of control completely because the logistics cost is obviously little higher for usa.
And on top of that if tariff goes away then of course there is a concern. But then at the same time the tariff, if it is applicable in India, I’m sure the tariff rates will be even higher for some of the other countries. So maybe net net will be in a beneficial position. So as we see the international market growth will be very sharp going forward. And you know the new capacities which are coming up downfield in Tamil Nadu and eventually after that in Andhra Pradesh, a major share will definitely go to the international market.
But at no point of time we’ll be ignoring or neglecting domestic market. We are a leader and we will continue to be the leader.
Unidentified Participant
You said 1.8 million tons supply in the India market. Of that how much it is coming from China and Russia inputs,
Kaushik Roy
that’s not much. India in totality imports about 9,10,000 tons a month. So India netmet India is exported.
Unidentified Participant
Okay, last question. In Aquaform last year and 1Q it was muted EBITDA. But how do you see the performance to pan out in the next three quarters? In terms of volume margin this business is diluting the overall roc. So what kind of ROCE you are targeting internally over the next two, three years? What are the steps that we are taking in terms of customer acquisition then raw material sourcing and improving the conversion cost. Also the capital allocation policy in aquafarm. Can you please discuss.
Kaushik Roy
Last few quarters a lot of work has been done towards market building, creating higher bandwidth in our sales and marketing team, expanding the product portfolio. And these are all gradually they have started yielding result. Maybe this will be more visible in subsequent 3, 4/4. We expect this year to be significantly better than last year. And of course this business has significant potential to grow from here. Now in terms of roce, you see the internal expectation is always that we, whatever investment we make, whether organic capacities or capacity build up or inorganic these acquisitions etc. That we have at least 17, 18% kind of minimum invested capital.
But it takes time to reach to those numbers. In three, four years time this business as they become it becomes bigger in terms of top line will start getting better and better returns on capital. Hopefully in three, four years time we should be there.
Unidentified Participant
How much capex we have in this.
Unidentified Participant
Business.
Kaushik Roy
How much
Unidentified Participant
capex in totality during the quarter we have done about 112 crores of capex.
Kaushik Roy
Aquafarm is not much aquafarm. It was ongoing. So a good part of capex has already been incurred in last year. This year in the first quarter it was about 15, 16 crore.
Unidentified Participant
Okay sir. Thank you sir.
operator
Thank you. The next question is from the line of Sanjay Jain from ICICI Securities Ltd. Please go ahead.
Sanjesh Jain
Yeah, good afternoon. Thanks for taking my questions. A few of them. First on the orine plant closure, any sense is that the plant were old and not efficient or you see that Europe and North America it’s becoming incrementally less viable for them to produce at those costs become complicated. India and China now what’s. What’s playing out in market?
Kaushik Roy
Absolutely. That is what is really key I think in US and Europe has very old brand and what we understand that our intelligence says that we are trying to close down the rubber black line. You know, I mean so called not the highest value added lines. They are trying to stop and put that money whatever they say from there more on the specialty lines. That is their target and indications are there. Out of these five what they’re talking about, possibly two to three will be in USA and the couple will be there in Europe. That is the indication and this clearly indication that you know China is definitely ahead of them today from those regions.
It is difficult for them to compete and that is what is reflecting. And this is honestly an opportunity for organizations like PCBL for growth.
Sanjesh Jain
And then expect more such closure to come.
Sanjesh Jain
They will be less of fish and more.
Kaushik Roy
Yeah, addition for sure will not be there. No, no addition for sure. It is kind of rolled out for the regular black for sure. Specialty. Something may happen especially possibly what will happen. They will convert all of these lines to specialty. They may not add anything new but they will be converting some of the conventional lines to specialty. But that also requires lot of capex. This will be a call of those companies but you will definitely be not seeing any additions. So therefore this gap between demand and supply will only grow in future which will be no advantage for Asia.
Sanjesh Jain
Very clear, very clear. Thanks, thanks. Second on the specialty now Including SAP and the costume that I come in the super assume that the growth accelerate with all these product coming up next year. That should lead to a much better EBITDA profit. Right?
Kaushik Roy
You’re right, absolutely. I’ll tell you as an organization our strategy is on one side looking at continuous growth on the conventional things, conventional items where we supply say largely to tire companies and form the non tire driver companies. So that continues to grow through expansion Tamil Nadu, in ap, Greenfield, et cetera, et cetera. But at the same time to keep.
Kaushik Roy
An eye on profitability improvement to the.
Kaushik Roy
Technologies efficiencies then Danox is achieving. So both will continue in parallel. So we are going to grow at the same time profitability also will improve. And I think point view of finance.
Sanjesh Jain
Sometime away the reflection of all these new technologies on our bottom line would be more visible. From FY28.
Kaushik Roy
We said the plan should.
Kaushik Roy
Be all available by end FY26 or early FY27. Right. So we will have some benefit showing up in 27.
Kaushik Roy
Right? We will have some benefit but the approval process etc will also take some time. So the real reflection, I’m not talking about the marginal deflection but the real reflection would come with a timeline.
Sanjesh Jain
What is the associate that carbon black oil should trade at a premium in China?
Sanjesh Jain
Has the situation changed with slowdown?
Kaushik Roy
Yeah.
Kaushik Roy
That we use.
Kaushik Roy
That has come down a bit.
Sanjesh Jain
Has come down.
Sanjesh Jain
So you mentioned in an opening, remember.
Sanjesh Jain
That the dumping intensity in India has come down.
Sanjesh Jain
Is that the freight cost.
Sanjesh Jain
Or the trade is not right for India?
Sanjesh Jain
Any particular reason why.
Kaushik Roy
Russian import has not changed much? It all started you know, a couple of quarters back and Russia continues to sell in India but the quantities are not very significant. They are doing about 2000 tonnes a month out of roughly 900 tons which is coming in India. And mostly this is being imported by small time traders is buying directly from Russia because of the quality concerns and also because of the sanctions on Russian material. So it is spot market that’s being traded.
Sanjesh Jain
So.
Sanjesh Jain
Mostly time.
Sanjesh Jain
Okay, last question on the I think since the EBITDA has been consistent of 50 crore, when should we see this predictor change 300 crore plus trend of an EBITDA this year.
Sanjesh Jain
Will Q2 show that trajectory changing for.
Sanjesh Jain
Us in the agriculture?
Kaushik Roy
See, we are still maintaining that guidance of 300cr for the current year and first quarter was also marked by all these US announcing tariffs and then withdrawing it. And the level of import in US significantly increased during the quarter because of the further announcement and then withdrawal of that. So this Quarter again is not a normal quarter from performance point of view. Second quarter onwards you will start seeing the numbers.
Sanjesh Jain
Got it? Got it. Thanks for asking all those questions so patiently. And best of luck for the coming.
Kaushik Roy
Thank you so much.
Sanjesh Jain
Thank you.
operator
Thank you. The next question is from the line of Aditya Ketan from Smif Institutional cookies. Please go ahead.
Aditya Khetan
Yeah. Thank you for the opportunity. Sir, my first question is also about our business. Sir. Since last quarter so sequentially we have seen power business, EBIT contribution has gone up incremental. EBIT has been added in power business alone. What has changed since last quarter? Because I was taking the volumes, they have not gone up on quarter, on quarter basis. So what if I crore.
Kaushik Roy
You’re talking about power segment performance, right?
Aditya Khetan
Yes, sir. Yes, sir.
Kaushik Roy
So there is increase in both volume as well as realization. Our power volume has gone up to 13 crore from roughly 10 crore in the previous quarter. And realization also has improved by roughly 50 paisa per unit. So that explains the increase in the bottom line.
Aditya Khetan
Okay. Okay. And sir, suppose like if our business contributed dollar but other business.
Kaushik Roy
Yeah. So Aquafarm business and also the southern black business. The performance was kind of flattish during the quarter.
Aditya Khetan
What explains this dip in the spreads of Aquafarm? Because I believe we had mentioned earlier that as the volumes increase operating leverage so that benefits the ebitda. But the realization is spreads of aqua form and decline. Is this because of higher imports from China? Are we facing putting or any other reason?
Kaushik Roy
It is not import from China. It is. I mean the reason for profitability will not reflect in the current quarter. One reason is the higher freight cost that they had to incur because of all the geopolitical disruption.
Aditya Khetan
Okay, but the Fed cost like it could have gone up by almost 34% in a core strengthening.
Kaushik Roy
I mean the impact of that cost is around 6 crores during the quarter.
Aditya Khetan
Okay, so this is additional 6 crore that we have incurred.
Kaushik Roy
Yeah.
Kaushik Roy
You know, I think, you know, generally you should. I’ll explain something to you. While you’re talking about numbers. You can definitely look at talk about specific numbers. But I think you need to understand the overall perspective of business. Now last quarter and this quarter, last two quarters, which means Q4 and Q1 possibly are the two most difficult quarters. And most probably it will continue for a little more time. Some more time. The whole economy has gone upside down across the whole world. None of the big economies are doing well today. You look at us, you look at Europe, you look at Asia as a whole and within that India and China, none of Them doing too well.
And on top of that, this policy changes which were announced by Mr. Trump created further confusion and uncertainty in the whole system. So today, if some company is at least able to hold on to their performance of previous quarter or previous year. Previous year, then I think it is a reasonably good performance. Reasonably good achievement. I will put it that way. You need to see the overall perspective and then kind of analyze the whole situation. So that is my suggestion to use to kindly look at it that way. Within that, of course we can talk about specific numbers to analyze and understand more.
That is fine.
Aditya Khetan
Got it. Thank you sir for that explanation. So we have commissioned 11,500 tons in this quarter. So the remaining capacity would be completed by FY22.
Kaushik Roy
This should come up in next two, three months time.
Aditya Khetan
Okay, so the remaining capacity will come. Okay?
Aditya Khetan
Yeah.
Aditya Khetan
Okay. Any idea like contour for the next two to three years how much capacity in carbon black would be added and in which country and how much expected closure could be there?
Kaushik Roy
There is very little coverage on industry, but there are the historical trend has been every year about 3,400,000 tons of new capacity gets added.
Aditya Khetan
Okay, thank you sir.
operator
Thank you. We’ll take our next question from the line of Madhav Marda from fil. Please go ahead.
Unidentified Participant
Hi, good evening. Thank you so much for your time. So just want to understand if I look at the carbon black margins for us, you know, we had a very strong improvement just after Covid you not improved until last year. So could you give some color in terms of the softness which we’ve seen this quarter. If you could break it down in terms of maybe domestic versus export market or you know, how we should best understand sort of the impact of margins this quarter. I understand the global macros are quite weak, but there’s some more color for our understanding of keeping.
Kaushik Roy
There has not been much difference in terms of margins in different markets. I mean international market, domestic market, more or less margins have been in parity. It is the challenge that we are facing primarily is in the spot market trades, not the contractual trades where because of little oversupply and plus all these global macroeconomic conditions, you know, weighing down on businesses that is impacting margins.
Unidentified Participant
Could you remind me like what is our spot volume mix? Mostly contracted volume mix for PCBL.
Kaushik Roy
Today we are doing about 60% to tire companies and roughly around 10% to on the on the specialty side. So balance 30% kind of remains in, you know, spot market or short term contract.
Unidentified Participant
Understood, Understood. And the competition is there like in the spot market is from the Russian producers or sort of who are the players who are kind of creating the pressure or is it just some demand softness which is leading to entry margin pressure here? What’s happening here?
Kaushik Roy
In recent past capacity addition has been at a very higher pace as compared to the demand growth in industry. And that certainly is one of the reasons, of course. I mean good part of the capacities are in Asia primarily India as to say, and then of course Russia, because of sanctions they are not being able to sell in Europe. So they are also dumping it in some of the Asian countries. And Asia, I mean in totality is still very big for us. We do about 60% volumes in India and then roughly about 24, 25% in rest of Southeast Asia.
So this Russian dumping and rapid capacity addition has impacted and of course the demand growth has not kept pace with capacity addition. So that’s of course one of one more factor.
Unidentified Participant
Okay, and the Orion plant, what is the capacity which is shut down there? Any ballpark number like the sort of two, three facilities in US and couple of them in Europe. How much would that be?
Kaushik Roy
We don’t have exact details so far. We are trying to get some more details. What sense is that? It could be somewhere around two and a half, 3,300 thousand tons.
Raj Kumar Gupta
You do not know really how much it will be and by when. They are indicating by end of this year, but it has not happened yet. So we have to wait and watch for a while.
Unidentified Participant
Okay. Okay. And so just one more question was on the capital allocation. Could you give some sense in terms of Capex and next couple of years, how much do we plan to spend in the carbon black business? And then acetylene black and nanovans which could give some breakup. That would be great. Thank you.
Kaushik Roy
Acetylene black and nanovic would not require much investment. These are low investment businesses, carbon black. I mean between all the businesses that we have, AquaFarm, PCBL and the nanobase now on an average we would be doing about 600 odd crores every year.
Unidentified Participant
Okay, and how much of that would go into carbon black versus non carbon black businesses?
Kaushik Roy
Total commitment for nanovase will be around 200, 250 odd crores. I’m talking about the residual portion and aquafarm would require about, roughly about 100 to 125 crore on an average every year. Risk will be for carbon black Aquafar.
Unidentified Participant
Is how much are 200 crores each year?
Kaushik Roy
About 100 to 125 crore.
Unidentified Participant
Okay. And the, the acetylene black project. Sorry, maybe I ask I’m not fully sure of it but how much capacity do we plan to. And you’re saying it’s not capex intensive. So any outlook in terms of what capacity you want to add and by when?
Kaushik Roy
Initially we are planning four to five thousand ton but we will be creating higher cushion upstream and downstream and in between the reactors are kind of small reactors of thousand ton. So we can keep on adding reactors based on our market seeding and all.
Unidentified Participant
Okay, okay, thank you.
Unidentified Participant
Thank you so much.
Unidentified Participant
Thank you.
operator
Thank you. The next question is from the line of Christian Parvani from JN JM Financial. Please go ahead.
Unidentified Participant
Yes, hi sir, thank you for taking my questions. Sorry I just, I joined a bit late so give me if I’m being repetitive. So did you give Carbon Tech offtech guidance for FY26 and per kg guidance which stood at let’s say 17.4 rupees a kgx of other income?
Kaushik Roy
We have not given any guidance Krishnan. We are, I mean if you have seen our current quarter number, you see that we are already operating at 96, 97% capacity. I think we will reach almost full capacity. So this year we’ll maintain this kind of capacity utilization on little higher and realization would also depend on momentum through prices.
Unidentified Participant
Yeah. Okay. So basically you are at 154kt run rate and you know analyzing it you would be closer to 606, 660 nod and then probably some incremental. So 630, 635, 80 should be a. Fair assumption,
Kaushik Roy
maybe a little more. We are also about to commission one small line in Tamil Nadu in next maybe two weeks, two three weeks and so that will be available for good part of the year.
Unidentified Participant
Got it. And so realization. I understand it’s crude link but I was more from the spread perspective I was asking like let’s say per kilogram. I think you had indicated in the last call that Your overall or 2, 3 year aspiration is to be at 2022 rupees per kilogram for F26. Where do you stand?
Kaushik Roy
I would not talk about current years, you know, some number but we are on track to achieve targeted EBITDA per time. We spoke about some, you know, 4,5 rupees increase from the current level in next 4,5 years time and that will come because of the product portfolio expansion moving up the value chain. Some part of it will come from operating leverage and also good part will come from all the work that we are doing towards conversion efficiency improvement. So we are on track to achieve that I mean, but of course, I mean the current, I mean the business environment volatility is very high.
I mean every quarter there is some or other development which is negative for industry.
Unidentified Participant
Got it. Coming to aquafarm, you can see your volume has gone up. However your EBITDA has not gone anywhere. So what actually happened there?
Kaushik Roy
We just spoke about that. So first quarter again, I mean we were talking about US announcing tariff and then again differing it by a quarter which kind of resulted in the US you know, importing lot more during this quarter from China and some other countries which impacted our business volume. So this is again not a usual quarter for measurement of performance. But the guidance that we gave for that performance for the current year, we are holding on to that.
Unidentified Participant
Yes, that I got it. I mean I think you said volumes are impacted but I am saying that the volume did go up but your EBITDA went down. So something had to give, right? I mean or was it costs were high or was it the realization went down or you had, you were holding some inventory because volume we can see it’s material. Yeah.
Kaushik Roy
So the product mix also changed and also there was pressure on pricing which resulted in two, you know, lower margins also additionally credit cost during the quarter went up because of this trade group disruption.
Unidentified Participant
Yeah, that is probably that exchange. The 204 crore other expense went up to 231. That is fine. And I think you mentioned that you are holding on to your guidance of 300 crores. So just wanted to understand what will drive almost like 80 crores kind of a quarterly run rate. If you were to just take it for the next three quarters, what will change to give you a 30 crore uptick from the coming quarter?
Kaushik Roy
They are operating at low capacity. Operating leverage is going to give us that improvement in the subsequent three quarters. We are planning to increase capacity utilization.
Unidentified Participant
Okay, so I thought your capacity are closer to what 130ktpa plus you added 11ktpa so probably 140. And then you’re already running at 110km.
Kaushik Roy
Capacity addition which is happening. So we are going to get about 38,000 tons from the new facility out of which only 12,000 tons have been commissioned so far. And we had 130,000 tons before this capacity addition. So in totality we will have about close to 170,000 tons.
Unidentified Participant
Yeah, but isn’t that the case like in the initial quarters or initial couple of months the OPEX is higher till your plant stabilizes. So are you still confident of operating leverage playing out just from this quarter and then the next quarter or operating levels play out could happen probably two, three quarters down the line.
Kaushik Roy
The pricing this quarter was also not the usual pricing.
Kaushik Roy
Yeah. And that has changed.
Kaushik Roy
We can’t extrapolate current quarter for the full year’s profitability. We are already seeing some improvement in the current quarter and hopefully every quarter you will see improvement going forward.
Unidentified Participant
Got it. And just the last bit, if you. If you may allow me. So what, what led to the increase in the interest expenses this quarter?
Kaushik Roy
Interesting.
Kaushik Roy
Down it is one capitalization which happened in the last quarter of last year. So for one of our unit PCBL Tamil Nadu where we are putting up this brownfield expansion, there was some interest expense which was, I mean for the capex that we are incurring and ideally that should have been capitalized in the first three quarters. But capitalization for the whole year happened in the fourth quarter and consequently fourth quarter interest cost went down to that extent. And on that base current quarter interest cost is looking higher. But actually in terms of overall cash outflow for interest payments, it has gone down in this quarter and every quarter from here on you will see further reduction.
Unidentified Participant
Okay. And on this continuation, what was your gross and net debt at end June 25?
Kaushik Roy
We don’t publish balance sheet in first quarter, but there is some deduction.
Unidentified Participant
Yeah, I was just saying this is the ballpark number if you have handy. But in case you don’t, that’s fine.
Kaushik Roy
Yeah.
Unidentified Participant
Okay, no problem. Thank you so much for patiently answering my question.
Unidentified Participant
Wish you all the best.
Unidentified Participant
Thank you.
Kaushik Roy
Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that that you can press star and one to ask a question. The next question is from the line of Yash Sinha from MIPL family office. Please go ahead.
Unidentified Participant
Hi, am I audible?
Kaushik Roy
Yeah.
operator
Yes, you are audible.
Unidentified Participant
I had a bit of a unit economics question around the carbon black business. Just wanted to understand the difference in realizations between your specialty carbon black performance carbon black. In your normal carbon black.
Kaushik Roy
It would.
Kaushik Roy
Depend on grade to grade.
Kaushik Roy
But being recorded.
Unidentified Participant
Sorry, I think I missed.
Kaushik Roy
Yeah, I’m saying it would depend on grade to grade. I mean we have a portfolio of some hundred odd grade. Between these three portfolios at the portfolio level we are getting about roughly 25% higher realization in specialty 25 to 30% and about roughly 17% kind of higher realization in the performance segment.
Unidentified Participant
Got it. My second question was around the Orion plant closure. Since they’ve made this announcement, have you noticed any of your. Yeah, hi, can you. Am I audible Hello? Yeah, hi, am I audible?
operator
Yes, you are audible, sir. Hello?
Unidentified Participant
Yeah, I was asking if after this Orion plant closure announcement any of the larger export clients have intimated to you that they would be providing slightly larger orders going forward. It is little early for that. Of course we expect to get some benefit out of it going forward, but it is going to take time and these plants are still running. Orion has announced that they will close by the end of this year. These plants, by end of this year, these lines. So I mean there’s still some time before we start getting, you know, concrete benefit out of this.
Unidentified Participant
Got it.
Unidentified Participant
I think that’s it from my end. Congratulations on a good set of numbers and all the best. Thank you.
operator
The next question. Thank you. The next question is from the line of Aditya Ketan from SMIFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you sir. For the follow up for the new carbon like greenfield 9 like which we have planned. Any ideas on where, when we are planning to start the construction and when it would be fully completed?
Kaushik Roy
It takes about roughly 18 months to get the plant ready once we have all the necessary approvals in place. But the approval process is little lengthy. We expect all the approvals to be in place in by four quarter next four quarters or so. Yeah. So from now maybe around three years. Roughly two and a half to three years.
Aditya Khetan
Got it. Good. Okay. An this new speciality carbon black line which we find. Hello? Hello. Am I audible now, sir?
Kaushik Roy
You’re not, you’re not.
Aditya Khetan
Hello, Am I.
Kaushik Roy
It’s slightly better. Can you say something more then you can understand whether you are audible or not.
Aditya Khetan
Hello, Am I audible myself?
Kaushik Roy
Oh, not yet. Is breaking. I think now it is better continue.
Aditya Khetan
Okay. Okay. Sir, my question was onto the specialty carbon black line which we are planning in the next three to four quarters. Sir, our current capacities utilization is around 50%. I think that would be fully operated by in the next one to two years. So that this capacity addition, any outlook like we are adding on to the same capacity into the similar bridge and what will be the capex.
operator
Oh, I’m sorry to interrupt, sir. Hello.
Aditya Khetan
Yeah.
operator
Hello. Yeah. Yes I’m sorry to interrupt. You can speak. Sorry.
Aditya Khetan
Okay, so first of all there would always be a gap between the rated capacity and the actual achievable capacity based on the product mix and in specialty we can reach maximum around 64,5%. I mean that’s the maximum that we can achieve. So against 112,000 tonnes maybe we can reach about 70, 75,000 tons. And we are already operating at a run rate of 16,000 tonnes plus every quarter, which is very close to kind of full capacity utilization. In a year’s time we are going to achieve that. And therefore we require more capacity. And you know, to get this line commissioned will take about 4/4 time.
The second question I think you asked about the CapEx, this line, is that.
Kaushik Roy
Yes, sir. Yes.
Kaushik Roy
Okay, so it will be somewhere around 85, 90 odd cross.
Aditya Khetan
Okay. And similar like which we are manufacturing today. It is into the similar grade function.
Kaushik Roy
This will be mostly similar, some new grades, some in the category of Ink and Co.
Aditya Khetan
Okay. Okay, got it. Thank you.
operator
Thank you, ladies and gentlemen. On behalf of ICICI Securities Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. It.