Privi Speciality Chemicals Ltd (NSE: PRIVISCL) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Unidentified Speaker
Mahesh Babani — Chairman and Managing Director
Sanjeev Patil — Executive Vice President
Narayan Iyer — Chief Financial Officer
Analysts:
Sudhir Bheda — Analyst
Rohit Nagraj — Analyst
Jaiprakash — Analyst
Rohit Sinha — Analyst
Pankit — Analyst
Vinay Nagori — Analyst
Mohit Jain — Analyst
Puneet Jagdish — Analyst
Anupam Agarwal — Analyst
Nikhil Porwal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Preview Specialty Chemicals Q3 and 9 months FY26 earnings 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 are not guarantees of future performance and involves risk factors 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 touchstone phone.
Today from the management side we have with us Mr. Mahesh Babani, Chairman and Managing Director Ms. Rajan, President Mr. Sanjeev Patil, Executive VP, Strategy and Biotechnology Mr. Narayan Iyer, Chief Financial Officer Ms. Ashwini Shah, Company Secretary SDA Investor Relation Advisor. I now hand the conference over to Mr. Mahesh Babani, chairman and Managing Director of Preview Specialty Chemicals. Thank you. And over to you sir.
Mahesh Babani — Chairman and Managing Director
Thank you. A good evening to everyone and a warm welcome to previous investor call. As you all know, despite the challenging global environment marked by tariff related geopolitical uncertainties impacting global trade, we are proud to be among the few companies that have continued to demonstrate resilient and robust performance during this period. This performance is driven by our diversified product mix focus on operation excellence and disciplined execution of projects. These factors have enabled us to sustain growth momentum. To sustain and accelerate the growth momentum, we have outlined a clearly defined three phase expansion roadmap over the next two three years.
Aligned with our long term growth vision. These initiatives are expected to enhance our overall capacity by nearly 55% and broaden our specialty products portfolio. As we look ahead, our strategic priorities remain steadfast. A world class aroma chemical company that leads with purpose, executes with precision and grows responsibility. On behalf of leadership team, I would like to thank all our stakeholders, employees, customers, shareholders and partners for their continued trust and support. We look forward to sustaining this momentum and creating long term value as we advance into the next phase of Privy’s growth story. In addition, the evolving trade landscape, particularly the strengthening trade arrangements between India, United States and Europe presents meaningful opportunities for a company like Privy Specialty Chemicals.
As global customers increasingly seek reliable diversified and compliance supply chains, India’s growing integration and developed market positions us favorably. My colleagues Sanjeev and Narayan will take you through this operational, strategic and financial details. I now hand over to Sanjeev and Narendra to provide update on our growth plan and Operating strategy.
Sanjeev Patil — Executive Vice President
Thank you sir and good evening to all. I believe that you have had a chance to go through our financial results and investor presentation which I shared this afternoon. It has been three years 10 quarters that we have been delivering upward of 20% EBITDA margin and in the past three quarters we have delivered nearly 25% EBITDA margin. Return on equity is also around 20%. Our performance during third quarter attests the robustness of our business model the industry which is largely unaffected by global headwinds as our products are integral part of human life. Further, the performance also underscores the benefit of variety of operational excellent measures that we have taken by our company.
We have maintained profit margin by improving process yields, reducing operating cost and deriving benefits of economies of scale. For the past 10 quarters we have maintained EBITDA margins of over 20% and past 3 quarters over 25%. Our expansion projects are being implemented as per plan. Civil work for these projects is about halfway done and detail engineering work is at advanced stage. These projects will pave way for meeting our 5k 1k plan. I would now like to briefly about the joint venture. We are very happy to announce that our joint venture with Jeevadan Prijeev is progressing well in this the third quarter.
Prijeev achieved positive EBITDA and going forward in the next financial year will achieve net profit. Tribee Management convinced the joint venture partner Jivadan that the debt burden on presume needs to be reduced. Accordingly, Jivadan has agreed to provide non interest bearing trade advance which will significantly reduce the debt burden and in turn the interest cost. While we appreciate and are thankful for this initiative, this step also re emphasize Jivadan’s commitment to the project. Further, to augment revenues, an investment of rupees 50 crore has been planned which is being funded by infusion of equity by preview 51% and Juvedan 49%.
This capex will create capacities to manufacture additional products in Prejeev. Previous team is also working on scaling up medium sized specialty molecule for Prejeev and the cost for development will be funded by the jv. All in all, Prejeev is on a very good trajectory and will earn benefits in the years to come. Biotechnology we have been working on growth plans beyond 5k 1k. We are working on converting biomass which is bio waste into value added products. We are currently at kilogram laboratory level in developing these products. These proprietary technologies will generate substantial intellectual property for the company which will reflect into intangible assets for the company.
With this now I’ll hand over and request Mr. Nairand Iyer to share financial details of the company.
Narayan Iyer — Chief Financial Officer
Good evening and thank you Sanjeev and a warm welcome to all of you all. Our performance for the quarter highlights our ability to protect profitability across cycles and reinforces our confidence in the structural strength of our operations. A glimpse of the key highlights for the three month and nine month period we have reported a strong growth despite a subdued market. 24% revenue growth reported in both quarter three and nine months. For the financial year 2526 on a year on year basis we have delivered 25% plus margins for the third consecutive quarter. EBITDA margins are expected to sustain 20% plus which is driven by operational efficiencies, improved product mix and increased volume.
Our JV with Prajeev is also shaping up well and we heard Sanjeev giving the wonderful news with regard to the new infusion of equity and we expect a very meaningful contribution from Brijeev in the coming years. Our phase one with regard to the CAPEX on the production capacity expansion is progressing as planned and it is expected to be commercialized by end of March latest. By April 26th this shall increase our production capacity from 48,000 metric tons to 54,000 metric tons for all our existing products. Phase two of the multi Specialty Aroma Chemicals project is also progressing as planned.
The scheme of amalgamation of Preview Fine Sciences Pvt. Ltd and Privy Biotechnologies Ltd. With previous specialty chemicals Ltd. Is under process and we have filed all the necessary data and filings with both the stock exchanges giving a synopsis of the financial numbers starting with the quarter three for the year 2526. The total income that we have achieved during the quarter was rupees 611.15 crores with a growth of 25% on a year on year basis. EBITDA achieved during the sale period was 158 crores with a growth of 37% on a year on year basis this EBITDA Margins translates to 25.83% for the quarter and we expect to maintain similar EBITDA margins in the near future.
Though profit after tax reported as per financial numbers is around 74.85 crores. The actual pat if we take the one time adjustment on account of the Labor Code which was introduced and implemented in this year and also after adjusting the non controlling interest, the actual pact for this particular quarter comes to about 82 crores which is as against the 44 crores reported for the previous year. Now coming to the nine month performance ended 31st December 26th. The overall income achieved in this nine months is 1,857 crores which is a growth of about 24% on a year on year basis.
Really a remarkable achievement as compared to the times that we are in. The overall EBITDA achieved during this period is 481crores which is a growth of about 47% on a year on year basis. The EBITDA margins which have been achieved for the nine month period is 25.9% and profit after tax post the non controlling interest as well as the employee cost adjustment is 223 crores. So if we add the other two, the overall GRAT for the nine month period comes to about 232 crores or so which shows a remarkable growth of about 84% on a year on year basis.
Friends and investors, with the planned capacity expansion of existing products and the introduction of new specialty products, we have established a clear roadmap and we are on track to achieve our vision which was showcased by our visionary chairman and Managing Director Mr. Mahesh Babhani. And our vision is 5000 crores in revenue and an EBITDA in excess of 1000 crores which we are on track to achieve in the next three to four years which represents a growth of more than 2x from the numbers that we are currently being achieved on this sound footing. I would pause here and open the floor for question and answers. Back to the moderator.
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 their touchton 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 Sudhir Bheda from Beda family office. Please go ahead.
Sudhir Bheda
Yeah. Good afternoon and hearty congratulations to entire. Preview team lead by Mr. Mahesh Babani for outstanding performances quarter after quarter.
Mahesh Babani
Good evening.
Sudhir Bheda
Yeah sir, my Questions are like first question. With the EU treaty happening and us lifting the penal penalty of 25%, what advantage we will have as a freebie as a company? As we are exporting 70% of our product.
Mahesh Babani
I think we have a clear cut advantage in coming years. In fact we will be able to sell most of the production there. Needless to say we want to sell it throughout the world. Because right now we have clear cut advantage over China and Other countries as we enjoy 18% duty, it has been confirmed for our product range and in some cases so we have a clerical advantage and there’s going to be a new trust to our growth plan.
Sudhir Bheda
And what would be the volume growth next year? With some capacity coming on the stream, what can be the volume growth?
Sanjeev Patil
So we, We expect the way we have planned the capacity and the capacities have increased and looking at our business on hand, we expect about 7% volume growth in the coming financial year. It could be better also but we will see how things pan out because.
Mahesh Babani
We are in a space where new projects are starting and probably it would be between 11 and 15%. Yes.
Sudhir Bheda
Right. And now Giordano, as on the opening, in the opening remarks you said they agreed to provide 150 crore as a interest free loan. So now can we accept that console. Result and the standalone result. There is a gap of 30 crore in the nine months will be breached and next year entire losses will be wiped out.
Sanjeev Patil
Absolutely yes, Absolutely yes,
Mahesh Babani
absolutely.
Sudhir Bheda
So with the, with the new capacity coming in for the value added product, can we expect that the value growth could be far higher than the volume growth what you are projecting. Is there. Any price increase also? That is another follow up question is is there any price increase happening for this current calendar year?
Mahesh Babani
All I can say is we’ll be able to maintain a healthy margin upwards of 20%. It can be 24, 23, sometimes 25 because you know world markets are very uncertain. Sometimes there’s a war, sometimes price increases. But we are quite sure that we’ll be able to achieve our numbers. We want to be little cautious on telling you 25% for sure but it will be upwards of 20 and less than 27, it will be somewhere in between.
Sudhir Bheda
Thank you for the opportunity and all the best.
Sanjeev Patil
Thank you.
Mahesh Babani
Thank you.
operator
Thank you. The next question is from the line of Rohit Nagraj from 361 Capital. Please go ahead.
Rohit Nagraj
Thanks for the opportunity and congrats on a very strong set of numbers. First question is on the new product development. So I’m referring to the slide number 13 in our presentation in terms of individual products. If you can just give us little more understanding as which particular applications, any competition and with geography. So is it India centric or maybe eu, US centric? And if there are any contracts with customers once we commission these facilities so that we have a fair understanding of revenue visibility. Thank you.
Sanjeev Patil
Thank you Rohit. So in terms of geographies, we always look at the global market, the world market as our market. So we don’t look at a specific geography. And the reason for these products to be formulated in India is that as you can see the first two products. Are Maltol, ethyl maltol and ethyl bacillate. We are in China plus one kind of a strategy where in India there is no single manufacturer who is making these products. We will be the first company to do that. The last product that we have is in fact a product that will be offered for the first time from a renewable resource. You know, globally it will be first time that a company could offer cyclobutanol on a former renewable resource. And that’s the key highlight about this product in terms of applications. Typically as we progress towards completion of project, we seek approvals from the customers and that’s the time when we also get some kind of indicative commitments from our customers. That’s the way we have worked all along and we will continue to work like that.
Mahesh Babani
So in fact cyclopentanone will be first time manufactured through a bioroof renewable raw material and it will. The word forward is going to be very interesting for a product like this. You know.
Rohit Nagraj
That’S interesting to know sir, thanks a lot. The second question is we have carved out 1200 apex plant. We’ve also given which in all segments and how it will be distributed. If you try and just give us the timeline when Tom shows how this will be split between say FY26 to FY28 or maybe if it is beyond FY28 that would be helpful, thank you.
Narayan Iyer
Broadly, as you would have seen in the investor presentation also and we have been talking about it in the last three quarters the company has outlined close to about 1200 crores of investment in the three year period. So exact we have just shared a broad light that we know we’ll do a 300 in phase one, 600 in the phase two and possibly a 300 in the phase three. All this will happen by March 27th, 28th or so so that by 2829 we should be in the position to achieve the 5000 crores of revenue. So that’s the ballpark planning that we are talking about.
As we speak today we have already started and commenced the phase two of exposure which is the major. Bulk of. The capex that we are talking about and which we expect that by Q1 of next year we should be in a position to complete so that capacities and facilities are available so that the growth beyond the 54,000 metric tons is available. And you can see company growing at that expected 20% CAGR which we have achieved over the last 24 years now. Thank you.
Rohit Nagraj
Yeah, got that. If I just want last clarification of the 150 crores provided by jaw Dan as an advance, will it be adjusted towards the revenue that we will be generating out of the jv? Thank you.
Narayan Iyer
We will prima facie that’s the idea that you know this, we adjusted over a long term 10 year period or so so that you know against as whatever other normal laws that are applicable for setting off such advances.
Mahesh Babani
I think we could even try to stretch it to 15 years.
Narayan Iyer
Yeah.
Rohit Nagraj
Thanks a lot for answering all the questions and all the best. Thank you.
Narayan Iyer
Thank you.
Mahesh Babani
Thank you.
operator
Thank you. The next question is from the line of Jay Prakash from Koman Capital. Please go ahead.
Jaiprakash
Am I audible?
Mahesh Babani
Yeah, yeah.
Jaiprakash
So my question question is that you have this capex of 1200. So is there any cap you want. To keep on the debt? Because debt is already of around thousand crores. So is there any cap you’re looking for? If you can just elaborate on that or if you want to be debt free or any anything else on that side will be helpful.
Narayan Iyer
See normally ideally, you know a debt to EBITDA we always feel it should not be exceeding a two and a half X and we would like to maintain at those levels. But you would have seen our investor presentation and the numbers that currently also our debt to EBITDA is just about around 1.6 or so. So we are well, well within the norms we would like to maintain on a healthy front. It will always be less than 2 1/2 x. In fact, you know, but having said that, for the last two and a half years we have been at the level between one and a half to two.
Jaiprakash
Okay. And that will be the guidance for future. Basically two and a half times in future.
Narayan Iyer
Yes, two and a half times, that’s right.
Mahesh Babani
That will be our guidelines.
Jaiprakash
Okay. And is there any foreign currency benefit which we are getting because of the INR depreciation? Yeah, because that will be helpful to understand.
Narayan Iyer
Could you, could you come again? What sort of benefit did you say?
Jaiprakash
Foreign currency basically INR is depreciating. Right. And you have mostly.
Narayan Iyer
Yes, being a net exporter we always have the benefit when the rupee is depreciating. So definitely there is a forex income on account of such depreciation.
Jaiprakash
And how much it was in this quarter? Sir, just to understand
Narayan Iyer
this, this quarter. Was about three and a half crores.
Jaiprakash
Okay, thank you.
Narayan Iyer
Welcome.
operator
Thank you. The next question is from the Line of Rohit Sinha from Sunedi securities. Please go ahead.
Rohit Sinha
Yeah, thank you for taking my question sir. And congratulations for good set of numbers. Just one clarification on the capacity side as we are expecting from 48 to 54 in just slide number 13 and slide number 10 just wanted to refer that the multi specialty product which is in which is which will be in this 48 to 54 6,000 capacity or that would be another capacity in slide number 10 we have mentioned that the capacity augmentation will be completed by June 30th. So this is referring to the new multi specialty product or the existing product which we are which you just have initially mentioned would be ready for mission by April.
Narayan Iyer
Rohit. Hi, good evening. To answer you this 54,000 does not have any multi specialty chemical products. What we are talking 54,000 is all the existing products that we had which we started last year. The multi specialty and the specialty products expansion is in the phase two and phase three where we will be adding close to about 18,000 metric tons of going forward. In fact.
Rohit Sinha
And. And this 18,000 would not be that pre fine. From the previous preview.
Narayan Iyer
Fine science is different. This is only purely Preview Specialty Chemicals Ltd.
Rohit Sinha
Got it. Got it. And once this preview fine sense would be merged. I mean when we should see the merge number in second half possible in the first half of FY27 as well.
Narayan Iyer
We expect this entire merger process to take about a year. So maybe by if. If we are really able to expedite it maybe by October 26th. But latest by December 26th we should be in a position to get the order from the NCLD.
Rohit Sinha
Got it. On the safer side I believe by FY28 we will have the merge number.
Narayan Iyer
By 27 definitive.
Rohit Sinha
Okay. Okay. And. And just on the margin front I mean we. We already have guided for I mean nine months. We already did more than 25% and we have been positive about 22 24% going forward also I believe. I mean still I feel the guidance which you used to say for 20, 22% or in excess of 20 is a much conservative side given all the. I mean high margin product or you can say value added products are the origination going forward. So I think we still 24, 25% kind of margin pretty much achievable. But yes, being on the conservative side one can state that.
Narayan Iyer
Yeah. So I. I did mention that we will sustain the margin. So my answer continues that we will sustain.
Mahesh Babani
But this is, this is a vuca world, you know. So, so you know we are just keeping everything to be on a triple side.
Narayan Iyer
We will try to maintain the margins. Roy, in short.
Rohit Sinha
Got it. Got it. Thank you. Thank you. And that’s it. From my side.
Narayan Iyer
Thank you Ro. Thank you very much.
operator
Thank you. The next question is from the line of Pankit from Dinero. Please go ahead.
Pankit
Yeah. Hi. Good afternoon everyone. So I think just during December early we get the visibility from our customers in terms of say volumes and pricing for the calendar year. So if you can help us with how does this year’s negotiation or contract look like especially in terms of pricing. And one more.
Sanjeev Patil
So you know obviously we can’t be discussing this in public forum but we can only state to you that we are on a good wicket. So that’s the only summary I can give you know that we are on a good wicket and that that’s it.
Narayan Iyer
So we can, we can just disclose that our contracts to spot market continues the way it has always been.
Sanjeev Patil
70% contract and 70% contract and 30%.
Pankit
Any, any pricing pressure on the 70% contract which the contracts which are in place for the current year. Any pricing pressure or it normal we.
Narayan Iyer
Would pass this question. Sorry.
Pankit
Okay. Secondly, once the merger is say done how should we look at the numbers which can come from say 3v fine science. And.
Narayan Iyer
Once the entire consolidation happens as has been informed and they’re in public domain this unit of preview fine science can give us optimum capacity and a revenue of about 400 crores. Thank you.
Sanjeev Patil
Thank you.
operator
Thank you. The next question is from the line of Vinay Nagori from Fintegrity Wealth Management. Please go ahead.
Vinay Nagori
Hello sir. First of all congratulations for the superb members.
Narayan Iyer
Thank you.
Vinay Nagori
Just wanted to understand with the CBAM norms cross border adjustment mechanism in Europe coming live in January 2026, how will it benefit us? Because we are as it is. Ecovid is platinum rating company.
Mahesh Babani
I think we have surely an advantage because all the other countries who produce this have minimum of 6 to 9% duty and we’ll be free of duty. So that will make a lot of difference. Yet we need some clarity on the clarity is not there whether Switzerland is participating in this or no. So once we get that Switzerland is a major customer for us. But I just see no challenges in getting to commercialize this at a better level. We’ll have certainly advantages as India and
Sanjeev Patil
our platinum rating of course will help us.
Mahesh Babani
You know our platinum rating is of course going to help us. And you must have seen that we have also given you in the country. We have been the wealth creator among the top 500 wealth creators. You must have read that statement, right?
Vinay Nagori
Absolutely. Congratulations on that as well.
Mahesh Babani
Yeah, thank you. Thank you,
Vinay Nagori
sir. Because in the CBAM norm cross border adjustment mechanism they say that the people who are making through petrochemical route or making or having some good amount of carbon footprint there will be, the companies will be charged some amount. So as it is, our footprint is negligible and we have platinum rating. So will it help us gain higher market share? That’s the question.
Mahesh Babani
100%. You are absolutely right. Today of late, because of geopolitical disturbances this has taken a backseat. But in the next two to three years, I can assure you with carbon footprints like ours, there will be duty advantages. And with carbon footprints, where there is addition carbon footprint footprints, there’ll be extra duty importing into US and Europe. This is certainly the way forward. Right now the challenges of the geopolitical thing, this has taken a back seat. But I’m sure in one year’s time it will bounce back. You are so right.
Vinay Nagori
Just wanted to understand the phase 2 and phase 3 capexes. In phase 3 will we see some molecules like ember od extreme where they have fewer players in the world. Like can you help us understand the margin profile?
Mahesh Babani
I have no comments on that. But there’ll be interesting molecules because. You. See we have reached a stage where all of our overheads are covered. So anything addition becomes as good as Ember Extreme, not as good as, but similar experience. Because once you have covered the critical cost, then every addition is a advantage to the company.
Vinay Nagori
Sir, and just out of curiosity, wanted to understand now like the cyclopentan oil we are making. Yeah. Is there any such technologies you are working on where we can get our patents?
Mahesh Babani
And we have already, we have already this morning review. We know from a similar raw material like cyclopentanone we’ve already developed another molecule. But we have to take one or two years of trials at lab. Now we completed lab, then at least one year, six months to a year at pilot, then we be ready on engineering and then we launch. So in coming times our story is not only 5,000, it will become incoming time before we reach 5,000 we’ll announce a 10,000 story also.
Vinay Nagori
Super, super. And sir, last question from my side. So just wanted to understand now Cyclopentanol and maltol will be the initial then what is. Are we looking for more value added products from there on? And what kind of.
Mahesh Babani
Absolutely the same raw material for Maltol, ethyl malol and cyclobid Known as a similar raw material. So we are looking at one more product from the same raw material that is Furphoral and we have already developed that product. In fact we also intend to manufacture the same raw material as soon as we complete this expansion. Our next project is going to be manufacturing Ferphrol so in house production. So Perforol itself is a value addition of 50%. Our raw material come down percentage will margin will come down to 50%. 50%. Right now we buy perforol at almost 100 rupees.
Our perforal manufacturing cost will be half of that probably in coming years.
Vinay Nagori
And just one last question I’ll ask. Is it possible for us since this will be a patent for us this technology. So once the plant is ready, can we license this technology to others?
Mahesh Babani
Well we like Sanjeev told you there will be some intangible assets that will be coming in. So those technologies are more special than these. We could definitely see licensing these technologies to different because it’s based all on biomass. So the new technology, everything, even cyclopenton is based on biomass. So we will surely get a chance in coming years to franchise these technologies to different parts of the world.
Vinay Nagori
Wow, that’s. That’s so super. And I’m feeling very proud to be an investor in your company sir. Thanks a lot.
Mahesh Babani
Thank you. I’m also proud to have you as my investor who respects this
Sanjeev Patil
and you. Want to learn so much, you know.
Mahesh Babani
So. Yeah, of course.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and one on the touch tone telephone. The next question is from the line of Mohit Jain from Exponent tribe. Please go ahead.
Mohit Jain
Thank you for the opportunity. I have just one question. I just want to understand what is the current capacity utilization and once the new line kick ends how will it ramp up in the next year?
Narayan Iyer
Hi, good evening. Currently we are at around 85% to 90% utilization of the overall capacities we have. And going forward we, you know as we have indicated that we should be touching the 54,000 metric ton coming year Also we are looking at some growth to maintain the 20% CAGR growth we are talking about. We expect our utilization to be in this range going Forward around the 90% markers.
Mohit Jain
Is this including the new CAPEX of 6000 nitrogen 90% for the next year.
Narayan Iyer
Definitely it will be the 54,000 as a mark current year the capacities as we speak it is around 50 odd thousand. By March we should be completely March or April we should go to the 54,000 metric ton. So. So the level they are talking about is on the 48,000 metric tons.
Mohit Jain
Can you do some highlight what will. Be the capacity utilization for the next year as we are ramping up our new plant.
Narayan Iyer
So as I just indicated for March 27 also we expect to maintain about 90% capacity utilization on the increased volume which is 54,000 nitric tons.
Mahesh Babani
I would request you to always look at a three year plan. We will be able to achieve in three years stroke less, maximum four years a 5000 crore roadmap with minimum, minimum, minimum 1000 crore EBITDA.
operator
Thank you. The next question is from the line of man from Growth Sphere Ventures. Please go ahead.
Unidentified Speaker
Hi Bhavani. Good afternoon. Congrats for very strong set of numbers.
Narayan Iyer
Thank you.
Unidentified Speaker
So I was going through the presentation and very interesting slide, slide number 15 right where you have laid out the roadmap as to how will you reach to this 5000 crores and 1000 crores milestone that you have kept. So one thing that I’m observing is that your pre refined specialty here current capacity, we are keeping it constant. Do we foresee that will we’ll also basically incur some sort of expenditure and expand that capacity also or how should we think about that?
Mahesh Babani
It will get merged.
Sanjeev Patil
No. So it will get merged. So we are not really looking at any separate unit. And just to just to you know give you further details. PV Fine Sciences operates in two locations. One is the location at Lotte which is operational. Second one is in Gujarat. So these plans are essentially for Lotte only. So you know the Babani talked about perfural backward integration and all of that and the further value addition products. So that will all come up in Gujarat. So that’s where. That’s where you will see growth going forward. So it is not covered in any of these numbers.
But going forward there is lot of scope for us to expand there as well. The Beyond 5K1000 as we call it.
Mahesh Babani
See for classic example I tell you right now we may have. We may be producing. We will be only producing, able to produce 500 tons of cyclopentinone. But eventually in next two years we will look at 5,000 but by the time it is merged it will come into previous. So it will be all set of numbers will be together into the first five. First. First 5000 crore turnover.
Unidentified Speaker
Got it? Got it. Second question Bhagwani, I wanted to understand is that the cycle of gto right. It. It has been the worst that in last four or five years after the Russia, Ukraine War and value value increase has started to happen in GTO as well. So should we also see in your, in your broader product profile we should we see some value gain on like to like this is of volume gain that we’ll be seeing over a period of next year, three years. How should we think about it?
Sanjeev Patil
The situation is very dynamic. So what we do is it’s always quarter on quarter call that we take as to how do we manage ATO as a feedstock. So it’s a very dynamic situation. So moment we find it’s good opportunity we latch onto that. Otherwise, otherwise, otherwise you know we have a steady plan where you know we consume. We don’t want to give out all the numbers but we consume good. Part of some part of our requirements from GTO and others obviously are from CST because that’s our backward indication story. But the GTO prices, you know if you are monitoring those prices it’s a very dynamic situation.
You know the prices keep going up and down. So we just time it well and capitalize on this. That
Unidentified Speaker
Got it, Got it. And so you said that over a period of time you want to take cyclopentanol to do a scale where PFS if it gets merged the numbers will look much bigger in preview as well. Could you give some sort of. I understood that on a scale as sir said, total turnover PFS can do. But what would be the margin profile on those additional products? If there will be some sort of. Idea
Mahesh Babani
Similar, similar, similar. It will be similar. So we have guidelines when we develop a product. We our guideline says that we have to be. Sometimes it’s a low value, sometimes it’s a high value but eventually we have to look at a product mix which gives us anything north of 20. It may be 23, 22, 25 north of 20 only we make sure then we develop the product supposing it is a product of 18% EBITDA but we will make sure that we should have a target to reach 22, 23, 24 by weighing improving our technology using some catalyst.
There’s a full fledged hundred people technical services department which looks at this.
Unidentified Speaker
Got it? Got it sir. For this 1200 crores of capex that we have planned over a period of next two to three years do we expect any sort of equity dilution through any route.
Mahesh Babani
Not needed but let CFO take a call if needed or I think even otherwise I don’t think so. We need enough debt is it below 2? So I don’t think so. We need any equity dilution at the moment but maybe if the CFO feels he wants to dilute my position, I don’t know.
Narayan Iyer
It will be primarily internal accruals and borrowing from the banks that should, that should suffice us for this 1200 odd crap. Etc.
Unidentified Speaker
Got it, Got it sir. As Rabaniji touched what were investors probably worried about or were questioning a good blog of promoter that had been sold. So if you would like to place any comments on that particular part.
operator
Sorry to interrupt you Mr. Man but can you please rejoin the queue for follow up question?
Unidentified Speaker
Yeah, sure, sure, sure.
Mahesh Babani
This is for the betterment of the market conditions because there has to be liquidity in in the system. So we sold some to a very reputed investor. There were some leakages which disturbed the market which we couldn’t control because you have to. It was a deal for very large investor countries largest investor. But some leakages happened so it did create some turmoil. But I think it’s for the betterment of the investor. What more should a promoter control than 63?
Narayan Iyer
Yeah. I hope that that answers your query and maybe a lot of queries in the market in fact.
operator
Thank you. The next question is from the line of Puneet Jagdish from Umayu Advisors. Please go ahead.
Puneet Jagdish
Yeah. Good evening sir. Congratulations on a great set of numbers. I have just two questions. One is in the slide where we’ve shown the roadmap to 5K. We talk about new products and other things but there is no mention of this Jeevad or jv. So can we assume that the JV is any incremental revenue from the JV is over and above that.
Sanjeev Patil
Yes, yes, yes, yes. We are not in our 5K. What we are not considered revenues from the joint venture. So that is an additional thing that you have.
Puneet Jagdish
That is an additional. Thank you sir. That’s useful. Second is, I mean investors being investors, we always want QOQ improvement and YOY both at the same time. So could we say that some revenue softness is because this is a typical year end quarter and hence customers like to maintain inventory low which is why we always have a little soft Q3 and a better Q4. Is that partially?
Sanjeev Patil
Partially yes. The other other reason is, you know, since majority of our products, I mean business is from export. So you know, often, often you know by about 15 16th of December the markets there do close down and if you look at last many years, you know we have similar patterns, you know, so that’s how, that’s what happened November Thanksgiving.
Mahesh Babani
Even in November Thanksgiving, you know most of the Customers go on leave and then come back after almost after Christmas. So that’s why if you see the last four years in that same thing, last four years always over that set of numbers in the third quarter is little lower than the normal.
Narayan Iyer
But having said that, it is still much better than our Q1 numbers that we have achieved. Q3 is a slight dip as compared to Q2. But margins. But the most important thing is that we have been able to maintain and improve on the margins as compared to previous year. The first quarter, second quarter margins has been steady. So that’s the plus point that we are talking about in fact.
Puneet Jagdish
Yeah, yeah, yeah. I think as I, as I said investor being invested. When you set high benchmarks, expectations get higher.
Mahesh Babani
So let us, let us close this one by saying that customer is king. So we have no complaints. So we always.
Puneet Jagdish
Yeah, yeah, and, and thank you sir. That’s all just two questions.
Mahesh Babani
Thank you. Thank you very much.
operator
Thank you. The next question is from the line of Anupam Agarwal from Lucky Investments. Please go ahead.
Anupam Agarwal
Yeah, thank you for my question and congratulations on. Good number. Sir, just one question. If you can give an update on the project of the Concord, please.
Sanjeev Patil
So as we have said, as we have stated in the. I think, I think the presentation that you know, we are right now processing up to about kilogram level of this concop thing and we are in the process of, you know, putting together all the data so that we can create lot of intellectual property in terms of patents and all that. So that is under progress, you know. And probably over the next 12 to 18 months time Mr. Babhani told you earlier, we will put up a demonstration facility and then a pilot facility and then it goes into full scale.
Right now we are processing at kilogram levels.
Anupam Agarwal
Under which business segment do you classify this, sir? Is it new products or specialty products?
Sanjeev Patil
No, no, it is beyond that. It is not into this. So it is a story which is beyond 5K 1K. So that, that is something that will, that will happen in our next phase of growth.
Mahesh Babani
But technology is developed pretty well. We are confident of scaling up. But you know we can’t bite more than can we chew. So we are biting what we can chew right now. We have enough, enough confidence that this is not a rocket technology. We can do it but we want to do it little better. That’s why we are trying to better the technology. Right now we have a technology which is working very well. We have reached in this particular thing, people get 10% heat in our pilot. We have already got 12% and we hope to do it better.
That’s why we are going to wait time and we are going to develop a better technology and then launch it. Otherwise some technology we have already developed where we are comfortable.
Anupam Agarwal
Got it. So fair to assume that we will be able to scale to lab or commercial by the end of 27.
Mahesh Babani
100%. We will be able to do it before that. But we launched the project only in 28.
Anupam Agarwal
Okay. And do we need additional facility or capex for that plant?
Mahesh Babani
Surely, surely. Because that’s, that’s not a. You know, we’ll be handling maybe few thousand tons of cob and to need that automation of handling so many tons of cob, we need huge space and it’s, it’s a, it’s a great thing to do from. Because nobody is doing it at the scale where we want to do. We want to do it at 20,000 ton level and scale that I don’t think anybody is doing. If anybody is doing it will be a few hundred tons. So we want to do that 20,000 ton level. We’ve been discussing with engineering companies how to handle this.
Right now there are two sets of chemical engineers. One who is looking at what we’ll do in 27, 20, 28. So we, we’ve already got it on our drawing board. We’ll be ready with it before we want to launch it.
Anupam Agarwal
Got it? Got it sir. I’ll closely monitor that. Thank you and wish you all the best for your 510.1k future.
Mahesh Babani
Thank you.
operator
Thank you. The next question is from the line of Nikhil from Perpetual Capital. Please go ahead.
Nikhil Porwal
Yeah, hi, good evening. Thank you for the opportunity. I just want to congratulate the whole management on this remarkable turnaround of business over the last three years. Managing tough times post the Russia, Ukraine war. So hearty congratulations to the whole team.
Narayan Iyer
Thank you.
Nikhil Porwal
Outstanding job. I just had one question. So one of your slide in the presentation mentions your focus is on improvement of gross margin. So can you talk a bit about the levers of these margin improvement going forward?
Sanjeev Patil
So the improvement in gross margin comes from a variety of inputs. Starting with first and foremost, you know, you improve the process yields. So which means you get higher amount, higher quantity of material from the same input, you know, or you require less input for getting the same quantity of material. So that is one of the first thing that you work on. And as we always have been saying we have 100 chemists and chemical engineers who are working constantly on this round the clock and we keep on looking at all the molecules that we have.
So that’s the first way in which we improve our efficiencies and improve our cost and the margins. The second and third thing that we do is we also try and reduce the utility consumption. So we try and conserve steam wherever possible. Every year. Every year we have program where we identify a loophole here and there. And we are also now using, now that we have reached a particular scale we are able to now use certain advanced techniques by which we can also conserve residual steam which at a smaller scale is difficult. So that also we are working on, we are working on having solar power which has been reducing our power cost as you can see that.
So these are all the factors which is all leading to, you know, operational efficiencies. And we constantly work round the clock. We are full fledged department headed by a very experienced chemical engineer and assisted by several younger people. Yeah,
Nikhil Porwal
got it. So does this mean there is still scope of further expansion on gross margins within existing products as you all keep on working exist, I mean even on existing molecules to improvise on the process while you all are also looking to get into some more specialty or super specialty products. So can we expect over the next three to five years the gross margins to keep on improving from the current level?
Narayan Iyer
It cannot perpetually improve. It will improve, you know, by about 100 to 200 basis point and more. But, but that’s about that, you know.
Mahesh Babani
Because our business is also as like. Like yours.
Nikhil Porwal
Got it, Got it. Thank you. Rest of my questions have been answered. It’s a long call. Yeah. Thank you so much and congratulations.
Mahesh Babani
Thank you Nikhil. Thank you very much.
Nikhil Porwal
Thank you.
operator
Thank you. Thank you. The next question is from the line of Rohit Nagaraj from 361 Capital. Please go ahead.
Rohit Nagraj
Thanks for the follow up. One question. What was the incentive which was recognized during this quarter and for the first nine months?
Narayan Iyer
Okay. This quarter we are not recognized any incentive because state incentive is not something that we keep getting on monthly basis. Or so this was addressed in my last call. Recall that this is on an annual basis that we talked about. And for the overall the nine month period the amount that has been taken in the revenue is close to about 10 crores or so.
Rohit Nagraj
Right. And for the new project or new capex is we again eligible for any state incentive
Narayan Iyer
for which project?
Rohit Nagraj
For the new capex that we are doing the 1200 crore.
Narayan Iyer
Yeah, yeah. This, this also taking the cue from the earlier, earlier investor call. As we had stated, currently we are only partly on the state incentive maximum Benefit that we are talking about by investing this 400500 crores which is balanced so that we get the ultra mega status for which we have the time to invest money up to and more than 1500 crores that is 31st of March 2027. Once we achieve these numbers then we are entitled for a full 9% GST benefit for a 20 year period. Currently this benefit is available for 15 years so we get that extra five years also.
From 15 we go to 20 years and the benefit also doubles up for all the sales that we do within the state of Maharashtra. Of course we have already got the Gujarat incentive for a seven year period because our investment has been much lower in that particular state. So yes the good times are definitely there and as our Prime Minister normally says achedin definitely.
Rohit Nagraj
Right and just second clarification. So we have mentioned in slide number you know on the CAPEX plan slide that the new product facility will come on stream sometimes in Q1 FY28. I think given that it’s completely new product on a commercial scale we may have stabilization issues for a quarter or so and given that there will be capacity which will always which will be optimized for the existing set of products. Very efficient. FY28 will be a transition here in terms of growth and then FY29 will have a material scale up in terms of revenue growth.
Sanjeev Patil
Yes, absolutely. Well, well, well read and well understood. The whole thing is correct. 2029 will be the year where there will be, you know, we will catapult into the next level of revenues and growth and everything.
Rohit Nagraj
That’s helpful. Thanks a lot and all the rest.
Mahesh Babani
We’ll also give you a newer plan. Yes for the future. That’s my job.
operator
Thank you. Due to time constraints we will take that as the last question for today. I now hand the conference over to the management for closing comments. Over to you sir.
Narayan Iyer
Thank you. Thank you every one of you for joining on this previous call today evening. We appreciate your time and showing interest in our company and our company’s financial results and monitoring us very closely. We are very happy with the set of questions and the set of investors posing around on the investor presentation and the financial results that we had declared. In case of any further queries or details you can get in touch with us or the SGA team. We look forward to meeting all of you over and over in our next few calls. Thank you very much and good day.
operator
Thank you on behalf of Privy Specialty Chemicals Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.
Narayan Iyer
Thank you.
Sanjeev Patil
Thank you, thank you.