Rossari Biotech Ltd (NSE: ROSSARI) Q3 2025 Earnings Call dated Jan. 23, 2025
Corporate Participants:
Anoop Poojari — Client Manager
Edward Menezes — Executive Chairman and Co-Founder
Sunil Chari — Managing Director and Co-Founder
Ketan Sablok — Group Chief Financial Officer
Analysts:
Rohit Nagraj — Analyst
Ankur Periwal — Analyst
Sanjesh Jain — Analyst
Bhavin Soni — Analyst
Ganesh Nagarsekar — Analyst
Nitin Gandhi — Analyst
Deekshant Boolchandani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Rosari Biotech Limited’s Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star 10 on your touchstone phone.
I now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you and over to you, Mr. Poojari.
Anoop Poojari — Client Manager
Thank you. Good evening, everyone, and thank you for joining us on Rossari Biotech’s Q3 FY ’25 earnings conference call.
We have with us Mr. Edward Menezes, Promoter and Executive Chairman; Mr Sunil Chari, Promoter and Managing Director; and Mr. Ketan Sablok, Group Chief Financial Officer of the company. We will begin the call with opening remarks from the management, following which we’ll have the forum open for a question-and-answer session.
Before we start, I would like to point out that some statements made in today’s call may be forward-looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.
I would now like to invite Mr. Edward Menezes to make his opening remarks.
Edward Menezes — Executive Chairman and Co-Founder
Thank you, Anoop. Good evening, everyone, and thank you for joining us on our earnings conference call.
It’s a pleasure to have you with us as we discuss our operational and financial performance. We are pleased to report another quarter of resilient performance, demonstrating the strength of our business despite a dynamic operating environment. All business segments registered healthy year-on-year growth with exports playing a crucial role in driving overall performance amidst softer domestic market conditions. Our HPPC division delivered a steady performance across key product categories, while the Textile specialty chemicals business showed a strong uptick supported by improved exports.
The HM business also performed well during the quarter, driven by increasing traction in select end-user industries. Exports sustained strong double-digit growth with this quarter, reflecting our continued focus on scaling our presence in key global markets. By targeting high-potential geographies, we are steadily expanding our customer-base and deep relationships with existing partners. Our efforts to invest in technology and enhanced capabilities have enabled us to deliver innovative and customized solutions that cater to the specific needs of international markets.
Innovation remains a key pillar of our strategy and we are deeply committing our R&D capabilities. Developing intelligent, eco-friendly and sustainable solutions has consistently helped us address evolving customer needs. These innovative offerings are enabling us to expand our presence in global markets where the demand for sustainable specialty chemicals continues to grow. Our ability to get to these markets with tailored solutions highlights our strength in aligning with global sustainability trends and customer expectations.
With this, I would like to conclude my address and now hand it over to Mr. Chari for his comments.
Sunil Chari — Managing Director and Co-Founder
Thank you, Edward ji.
I begin by reflecting on Biotech’s healthy growth trajectory, which continues to be driven by a combination of organic and strategic initiatives. This quarter, we are proud to have crossed the INR500 crore milestone in quarterly revenues and we aim to build-on this achievement to deliver even stronger performance in the future. Our focus on diversifying our customer-base and reach into new geographies has been instrumental in sustaining our growth and positioning us for long-term success.
Exports have been a key focus area for us, and I’m pleased to share that we have made significant progress in developing our global markets. We have strengthened relationship with existing customers, entered new geographies and tailored our solutions to meet the unique needs of international. Our international business registered year-on-year growth of 21% during the quarter and 28% over the nine months, providing strong support to overall performance. Meanwhile, we are making steady progress on capacity expansion initiative at our Dahej facility and through Unitom Chemicals. Currently in the execution phase, new are expression in the phase manner in the coming months.
Once operational, these expansions will enhance our capabilities across industries and enable us cater to high-growth segments in both domestic and international markets. While our strategic investments have impacted margins this quarter, we are crucial for laying the foundation for future growth. These investments should include capacity expansions and nurturing businesses in the growth phase, position us well to unlock new opportunities and scale effectively. As these initiatives mature, we are confident that the resulting higher operating leverage will contribute to margin improvements in the long-term.
Looking ahead, we remain optimistic about delivering sustained growth across business segment. The HVPC segment continues to benefit from strong demand fundamentals and innovation-led offerings while the textile business is slowing, early signs of recovery, presenting emerging export opportunities. In the division, we anticipate further improvements as demand conditions strengthen. Environment stabilizes, our focus will remain on improving capacity utilization, introducing innovative products and expanding our global and customer footprint to unlock new opportunities and drive long-term growth.
On this note, I would now like to invite Ketan ji to share his perspectives.
Ketan Sablok — Group Chief Financial Officer
Thank you, Mr. Chari, and good evening, everyone.
Let me provide — provide you with a brief overview of the financial performance for the quarter ended December 31, 2024. We delivered a good performance during the quarter with consolidated revenues increasing by 10.5% Y-on-Y to INR512.7 crore. All business segments reported growth with exports driving the overall performance amidst the challenging domestic business environment. Our HPPC division delivered 9.6% Y-o-Y growth, achieving revenues of INR390 crores.
The Textile Specialty Chemicals division recorded revenues of INR95 crore, reflecting a 14.5% Y-o-Y increase, again primarily driven by exports. While the ASN division reported revenues of INR28 crores, a 12% Y-o-Y growth supported by stable performance in the end-user markets. In terms of segmental contribution, HPPC accounted for 76%, Textile specialty 19% and AHN 5% of the overall revenues.
Our gross margins improved by 137 bps Y-on-Y during the quarter, supported by a favorable product mix and operational efficiencies. However, higher expenses related to ongoing growth initiatives, capacity expansion and certain businesses in their growth phases, such as our institutional cleaning vertical impacted the EBITDA margins, which stood at 12.6% compared to 13.7% in the same-period last year. We remain confident that these initiatives achieve scale and reach operational maturity, they will contribute to margin improvement in the future.
Furthermore, the shift of our new office and leasing of two warehouses impacted depreciation and interest cost due to the adjustments made under India’s lease accounting standards. Consolidated EBITDA was at INR64.8 crores with PAT ate INR31.7 crores. On capex project, including the etoxylation capacity expansion at Unitop Dahej facility and the Dahej expansion of HPPC. Both are progressing well and are on track for commissioning in a phased manner in the coming months and some of them in Q1 of FY ’26. These new capacities will enhance our ability to cater to high-growth segments, including agrochemicals, home personal care and specialty chemicals, while positioning us to capture emerging opportunities across both domestic and international markets.
We remain focused on achieving consistent growth and profitability by leveraging strategic investments and maintaining operational excellence. As we progress with our capacity enhancement initiatives and drive innovation, we are confident in our ability to tap new opportunities, strengthen our position in key markets and create long-term value for all stakeholders.
That’s all from my side. I would now request to open the forum for any questions the participants may have. Thank you.
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 R&1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles you.
The first question comes from the line of Rohit Nagraj with B&K Securities. Please go-ahead.
Rohit Nagraj
Yeah. Thanks for the opportunity, and good to hear that the exports have been growing. So first question again on the exports front. A, which geographies are particularly seeing the traction? And out-of-the three segments, which segments and maybe if it is HPPC, which sub-segment is seeing the traction in a particular geography. Thank you.
Edward Menezes
Good evening, Rohit. Rohit ji, good evening.
Rohit Nagraj
Yeah, good evening, sir.
Sunil Chari
The export geographies continue to remain — our major exports are to the Americas, which includes Latin and South America to Europe and also to Turkey. But now we are opening up geographies also in the Gulf area. So basically, I think geographies remain same, but we are trying to add new customers and new segments and in the businesses. And in terms of HUPC, you know the surpactants business, which is there, which is our core business continues to dominate over everything else.
Rohit Nagraj
All right. Got it. Our second question is largely from FY ’26 and onwards perspective. Given that during this year, we had constraint on the etoxylation capacity and still we have been able to grow reasonably at 10%, 11%. Given that we will be having the capacities in place sometimes during the next few months, is it possible that next year there could be a significant improvement as far as performance is concerned, given that capacity is available. At the same time, even we are going ahead with geographical expansion as you just earlier mentioned. Thank you.
Ketan Sablok
Yeah, Rohit, so this is Ketan here. Some of these planned geographical expansions, which we started a couple of quarters back, what’s keeping in mind these new capacities that are going to come up, we should have these capacities as I said in my opening remarks, some will come probably in this quarter, around March and some will come in the first-quarter. So given that we — it will take us a couple of months or at least a month-to stabilize the plants and get the product quality. So we should have at least nine months minimum is what our plan is that we’ll have capacities available. And we’ll slowly scale-up the production in these plants. And next year, we should see the revenue numbers are ramping-up with these additional capacities that will come up.
Rohit Nagraj
So got this. And any sense in terms of again just to, you know, support this particular narrative on the margins front that given that the margins have been slightly depressed during the quarter and even for the nine months and etoxylates in my opinion would be high-value and high-margin product there could be improvement in margins as well as we scale-up further. Thank you.
Ketan Sablok
Yes. So Rohit, since it will be the first year of these capacities coming up, we would like — not like to guess on really where the margins would go. But I think on the gross margin front, we should definitely see some improvements. On the fixed-cost side, because it’s a newer plant, we may end-up some costs may come up. We’ve already hired a lot of people in our R&D and in the production side given the capacities coming up. There’ll be some new — more hires coming up on next year as these plants start getting operational. So currently, I think we would still be okay to at least for the first year to come up with similar kind of margin levels of 13 plus-minus percent.
Rohit Nagraj
Sure. Thanks. And all the best. I’ll come back-in the queue.
Operator
Thank you.
Ketan Sablok
Thanks.
Operator
The next question comes from the line of Ankur from Axis. Please go-ahead.
Ankur Periwal
Yeah, hi, sir. Thanks for the opportunity. First question in terms of the growth revenue that we are seeing. So we have been seeding newer products, newer segments across — sorry, across different segments as well, apart from increasing the distribution in terms of the global markets. So if you could share your thoughts on any new verticals or segments which offer a good promising growth for us apart from the specialty chemicals as well as you know the Performance Chemicals there?
Sunil Chari
This is Sunil Chari here. We continue to focus on our core segments of HUPC, textile and AHN. HUPC, as you know, has grown stellar growth in the last four years since our IPO, we believe the surfactants businesses, basically the etoxids and would be our core areas of growth for the future. So our capacity expansion is also happening in the also surfactants which we think could grow in the future. The Rossari Biotech Limited, which we all call as Rossari Professional now the institutional cleaning chemicals, hygiene and you know which have some connection with also you know the consumable businesses is support is something which we feel will grow. This year in the first-nine months business INR200 crores, which is like a 50% growth over last year.
And this is a segment where we think — and we have put the maximum number of employees also in this year in this segment. 100 people we have added in, we feel this could be a big growth area for us in the future. Normally, these are all seeding opportunities where you know, we — if you see this INR200 crores practically, which has very low EBITDA, but it could create a lot of value for all of — in Rossari in terms of growth and profitability. And if you remove this INR200 crores, you know the rest of the business looks at a very, very, very good position. And animal Health and nutrition should of course grow and textile has grown already and we see signs of growth in the textile industry in India and abroad, exports us then well also. Overall, I think across the company, we see possibilities of growth in all the divisions, primarily and then the and then followed by textile is what we see.
Ankur Periwal
Sure,. The reason I asked that was because if I look at textiles as a business, you know YTD, you know we are largely flattish share. Is it that — and even same in AHN as well, the growth has been slightly lower versus HVPC, which has been driving the growth largely for us. So is it that there is a pricing correction and probably from a volume growth perspective, things are better here. If you can highlight maybe the volume growth, let’s say, ITD in nine months across the three segments, HVPC, textile as well as animal.
Ketan Sablok
So Ankur, I think it would be fair to say that the YTD nine months growth that we are seeing about 11% kind of a growth, the entire growth has come out of volumes. So prices have not really played a key role in terms of the growth. So I would say the volumes would have grown about 9% to 10% and a couple of percent increase would have come from pricing. And this has been across the — across the three verticals.
Sunil Chari
Here, Ankur ji, I would like to add here to Ketan sir is our gross margins for the first-nine months of this financial year compared to the gross margins of the last financial year have been nearly 30% up. I think it has been substantially increased in gross margin. So, this is something which is very heartening. Of course, we have spent more on recruiting people, we have spent more on our travel and freight has gone up a little, but the gross margin increase is something which is — which gives us strength that the future looks good.
Ankur Periwal
Sure, sure. Just a follow-up on that. So my question on volume growth was more specific to the business segments. So if I look at HPPC broadly, 13% 14% growth in nine months, textile is largely flat, animal is up by some 5%, 6%. So will be fair to say that this will also be the large link the volume growth across all the segments?
Ketan Sablok
Yeah. So if you see on a YTD basis, HPPC, as you rightly said, has grown about 12%, textile has grown about 6%, 5%, 6%, so has AHN. So most of this growth I would be okay to say has all come out of volumes.
Sunil Chari
In all the three divisions.
Ketan Sablok
In all the three divisions. Yeah.
Ankur Periwal
Sure. And just on the margins front, especially EBITDA margin, the reason on a consolidated basis, we are seeing slight in margin is essentially probably if I do A-minus B, which is your subsidiary performance, which has seen a decline in EBITDA margin despite gross margin expansion there. So any specific reason you could highlight why the overheads being higher, which have been steadily higher over the last couple of quarters?
Ketan Sablok
So as Mr. Chari also said, we’ve been in the process of adding in terms — if you see the — there is an increase in the employee cost, there is also an increase in the other expenses. So our overall expense basket has gone up. So if you see on the employee side quarter-to-quarter if I say our number of employees have gone up by about 35, 40 people. And on an annualized basis, year-on-year, almost 190 people have been added. Now most of these new additions have come up in our consumer or the Rossari institutional cleaning business. So we’ve added — if I say out of this 190, we would have added about 120 odd people in that division itself.
These have been the employees across function in sales, marketing, business development. So this is one business I think we are as we’ve always said that this is a business we believe in and we are taking these initiatives to set-up this business for from a very long-term view. And we are seeing good traction in this business with the top-line growing quite well. Currently, we’ve already crossed INR200 crores in nine months. We would have done — we had done about INR158 odd crores last full-year. So, our hope is that we should be closing this year INR50 crores plus in this business. Currently, this business is giving us a very low EBITDA because of the nature of the business. It’s more consumer-focused business. So that’s where the costs have majorly gone up.
And apart from that, yes, we’ve also bringing in a few people, keeping in mind the new project that will come in, we have also strengthened our R&D. So, we bought in some senior people in the R&D division also. And in the other expenses, which has gone up the Y-o-Y increases is high because we’ve the expenses on freight forwarding travel we’ve attended a lot of exhibition, export commissions have gone up. So as the business is, you know, taking traction, some of these costs are now getting played into the numbers. I think that this rate of the expense rate for this quarter should be what we will now be incurring mostly on a quarterly basis because lot of these expenses have been placed into the numbers of this quarter. And then hopefully once as the top-line starts showing its growth, the leverage will start playing out.
Ankur Periwal
Sure, pretty clear. Just last bit. You know the limitation of ethylene oxide earlier, to my understanding that concern is sort of largely over. Given that scenario, what should we look at in terms of our revenue growth over the next, let’s say, two to three years, given there are new capacities also which are coming up?
Sunil Chari
So we are waiting for newer EU capacity to come up in Reliance. Reliance is still not confirmed by when they will start giving. So this may be a constraint till we have clarity, you know from Reliance on the higher allocation of EU.
Ankur Periwal
Sorry, this was supposed to come in Q4, right? Are there some delays there?
Sunil Chari
But Reliance is delayed. So we are waiting for confirmation from Reliance on this.
Ankur Periwal
Okay. But over a two to three year window, what should be our target revenue growth? What should we be building in broadly?
Ketan Sablok
So this new capex which we have put in, we had estimated that over a period of three to four years at its peak utilization, it should give us an asset turn of about 4, 3.5 to 4%. So assuming these constraints, even if they are there for the first year or so, but we’ll be able to scale-up the capacities over a period of around three, 3.5 years, we should be able to scale-up to full capacities.
Ankur Periwal
That’s helpful. Thank you and all the best.
Operator
Thank you. The next question comes from the line of Sanjesh Jain with ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah, good afternoon all. Thanks for taking my question. So I got few of them. First on the exports business. On the EBITDA level, is this export business more accretive to the margin or a dilutive to the margin because that continues to grow quite strong and probably that requires a lot more effort to push in because these are newer geographies, newer customer and all. How are the margins playing out in the exports market?
Ketan Sablok
Yeah. Sanjesh, the export margins are in terms of gross margins, I will say are slightly better than what the domestic margins such as. While you are right, since it’s the growth phase for us on the export side, so lot of the costs are not started coming in terms of you know commissions, etc., setting up the business, traveling, a lot of sales and distribution-related expense exhibitions, etc. But I think these are the expenses which we need to incur to keep — to bring this export business to a certain level.
These expenses, we think that over a period of time will definitely pay off. And given that the domestic market is not really showing much sign of growth for us. I think we’ve taken the right decision to you know, set-up the export business and we’ve already set-up offices in Vietnam, in Thailand and we are in the process of also setting up an office in Turkey. So a lot of these initial costs and all will play into the P&L for a few quarters and then the leverage will start playing out. And also in Dubai, we’ve also set-up in Dubai.
Sanjesh Jain
That’s clear. But on the textile side, we were planning to build-in the larger team in the Bangladesh market and on the VL market and Turkey market. Is this the offices what we are referring is all focused on the textile business?
Ketan Sablok
No, no, no. These will play-out for all businesses, textiles and the HPBC. Some of them will be more textile focus, especially say Vietnam office will end the Turkey office and we will also be promoting all our products through these branch offices that we set up.
Sanjesh Jain
Still the textile business continues to remain not so impressive. That means that the exports on textile is not picked up, probably other segments are doing much better.
Ketan Sablok
So in textile, if you see Y-o-Y, we’ve grown about I think 14% kind of growth. And most of this growth has actually come up out of exports. So the export is something we are not tracking very, very diligently for the textiles because domestic market is growing at a very low single-digit kind of a number for us. So all this growth is mostly coming out of exports.
Sanjesh Jain
Got it, got it. So textile, domestic still not growing for us?
Ketan Sablok
Yeah, not really the way we would want it. It’s growing for us at about 5%, 6% kind of a number.
Sanjesh Jain
Got it. Second, on the Rossari, way we tend to invest a lot and growth is coming in. A lot of this margin expansion is because of because that will have 50% 60% kind of a gross margin. I can understand at the EBITDA level, but at the gross level, that should boost margins, right? And hence why we see gross profit margin growing so sharply in ex of the standalone business, while it’s still not translating into EBITDA growth.
Ketan Sablok
So see the business as we are expanding, we are introducing a lot of new products. So we’ve introduced products for you know, the segments, disinfectants, hospital segments. And we have, as we had talked earlier, so we are trying to get into a complete a hygiene solution kind of a company. And so just selling chemicals to the institution is not going to really propel the growth because the segment — the institutional cleaning segment includes all sorts of cleaning — cleaning and most of the institution want a complete solution. So, you’ll have to give them cleaning equipment, you have to give them tools, some machines also for cleaning, you have to give them products like cleaning, tissues, papers, everything.
So now as this business is growing, lot of these products are also getting added apart from the cleaning chemicals. So while earlier when we were pure chemical ceiling company, we used to have margins — gross margins of 50%, 55%. Now with this entire basket coming out, the gross margins have come down to closer to 35%, 35% 40%. So that’s why the — that this expansion is not really completely at that 60% kind of margin levels.
Sanjesh Jain
But Ketan ji, then this business is becoming more trading from manufacturing for us, right? Chemical, we are backward integration for equipment, paper, tissues and all, we are just buying from somebody and selling it. We will become trader, right? I understand will be much higher because there is no investment to it. Our EBITDA is a cash flow for us. But purely from the business mode perspective, this transition is not so great. That means the quality of that 50% growth in Rossari is more coming from the traded products.
Ketan Sablok
Traded or we are getting it all job worked through some company. But a key way this business is going to grow is once you have these other tools and equipments supplied, that’s when the chemicals also start going to these institutions. So this business just per se, chemicals will not grow. It will remain at that INR50 crores kind of level. For this business to completely grow as a consumer-based business, we’ll have to give this entire set of services and that is what the competition is doing. So if we have to match what you know the competitors are doing, we’ll have to give this entire basket and the entire service. And that’s where finally, as a consumer business, this will bring in value to the side.
Sanjesh Jain
Yeah, that’s fair. That’s fair. One on the earning growth side, I completely appreciate the revenue growth where we are delivering a probably in a challenging market, we are outperforming. But when it comes to earning, I think we are catching-up on the investment and hence it’s dragging the PAT. Do you think FY ’26 will be a year where we will at least start growing the PAT at the rate of revenue growth.
Ketan Sablok
See, that is what we are expecting. But some of — as Mr. Chari just said, we are still awaiting a feedback from Reliance on their EO capacities coming in. So if those capacities get delayed by a quarter or six months, then we could — our plans of bringing in that additional revenue and margin with the additional capacity would be — could slowdown a little bit and could get delayed. We’ll get a better hang of this probably by the end of this quarter or early Q1 at like what Reliance is planning to do with their EU expansion. So we had timed — we had timed our capex closer to what we got an understanding from them that their expansion is going to come.
Sanjesh Jain
No, no, I understand you said this when you made the announcement on the capex that our capex will come in-line with Reliance’s expansion on ethoxylates, which is REO. Assuming they get delayed by six months, do we have any other option in terms of procuring EO or we have to just run an underutilized plant?
Ketan Sablok
Yeah. So we do not have any option because Reliance is the only supplier of EO and we cannot import or transport VO. We are — we are already discussing with Reliance. So — and we are asking them for a higher share in terms of the UO that they have given us this year. So as I said, we’ll get complete clarity on this probably later on end of this quarter or maybe early next year. Whether we’ll allot us additional quantities of EO or not.
Sanjesh Jain
Got it. Got it. And one last point, you said that we have moved to a new office. Congratulations on that. And two new warehouses, which has led to the depreciation, amortization and interest cost which has gone up. Can you give us how much has that added the cost below EBITDA?
Ketan Sablok
So this quarter, if you see, we had take — this office we took and we also took two warehouses near our plants, so one for in Rossari and Unitop and one for our institutional business. So all these three lease properties, the impact of — under the, they come as an asset and then charged-off in depreciation. So we had a six months — nine months charge which has come in this quarter. So there is a one-time charge in depreciation of about INR1.5 crores kind of a number, which has come in this quarter. Going forward, the charge that will come in the depreciation will be about INR1.4 crores kind of a number. So if you see in totality, this year, this quarter, we’ve had a total charge of about INR3 crores in addition — in depreciation, out of which about INR1.6 crores is a one-time charge.
Sanjesh Jain
Got it. Got it. That’s fair. That’s it from my side. Thanks, Ketan ji and everybody for answering all the questions and best of luck for the coming quarters.
Ketan Sablok
Thanks. Thank you.
Operator
Thank you. The next question is from the line of Bhavin Soni with Anand Rathi Shares and Stock Brokers Ltd. Please go-ahead.
Bhavin Soni
Hello, sir. Thanks for the opportunity. I just wanted some clarification on which geography specifically contributed to the growth in textile.
Sunil Chari
For the textile, we have focused on three, four geographies in the last quarter. One of them is Egypt, the other is Turkey and the third is North Africa. So these were the three geographies that we focused on. And fortunately for us, the Bangladesh business where we have a new leadership in place, they have also performed well. So even though Bangladesh was a bit disturbed, but still the orders were good from Bangladesh, especially because the new leadership has penetrated key accounts. And so these orders are also expected to be stable in the near-future. And as the dollar crisis in Bangladesh becomes better, I think Bangladesh will also contribute to growth for the exports.
Bhavin Soni
Okay. Thanks. And just wanted some clarity that you had mentioned that you want to make Bangladesh INR100 crores geography in coming years. So is that target still intact?
Ketan Sablok
Yeah, the target is intact. The timelines have changed. So our plan initially was to do at least INR3 crores to INR4 crores of monthly target of — in Bangladesh by the end of this year. So, we have not actually reached that target because of the issues that are there. But we are working on some other plans. So we have plan B to address Bangladesh. So we are working on that. So, our goal of INR6, INR7 crores of monthly sales to Bangladesh is still there. I think it will take a little more time now given the current situation there?
Bhavin Soni
And sir, with respect to the institutional cleaning business, so since you mentioned that it’s contributing very less on the EBITDA front. So what are the targets with respect to where you want to reach on revenue fronts in two years? And then how can it contribute in a positive manner to the EBITDA? Like at what size will it contribute positively?
Ketan Sablok
So in two years, we want this business to be double of what it is today. So our two-year target, if you see, we should be closer to INR450 crores, INR500 crores kind of kind of a revenue. And we expect that once it reaches that number, we — it will start contributing to the EBITDA. At least currently at INR200 odd crores, we are already at EBITDA breakeven. A lot of expenses we’ve already factored in this number. So once this business reaches a size of, say, about INR500 odd crores, we should see some good EBITDA numbers coming out of this.
Bhavin Soni
Thanks, sir. That’s it from my end.
Operator
Thank you. The next question is from the line of Ganesh Nagarsekar with Bharat Bet Research. Please go ahead.
Ganesh Nagarsekar
Yeah. So my question is regarding the textile recovery this quarter. So as you said, the domestic textile business is not kind of growing too fast. So how sustainable do you think the broader recovery in the textile segment could be? And over the next few quarters, do we have some visibility about how this segment could perform?
Edward Menezes
So, thank you for that question. In the textile business in the domestic market, we are focused very strongly on the product mix, especially the finishing chemicals. And this quarter and the next quarter, we will be paying additional attention to the pre-treatment segment because of our backward integration into surpactants. So, we have this advantage of our own in-house surfactants manufacturing. So, we have strategized that in the next couple of quarters, we will focus on the pre-treatment. So here, we have gained traction which have contributed to volumes. However, value is under some pressure. But because the success comes from corporate customers in these segments in the pretreatment segment where there are continuous bleaching ranges or continuous dying and printing.
So there, the corporate customers, the business is very sustainable. And the corporate customers demand is a particular — they demand a particular quality and because of this demand and Rossari’s ability to provide that quality, we are confident that the growth is going to be sustainable as this business comes from key corporate customers. So that is as far as the domestic business goes. Like I said in Bangladesh, in Egypt, we have a new leadership and because of that we’ve been able to crack or penetrate a lot of key accounts. And the customers in these countries are large. That means they may be double the size or four times the size of customers in India.
And therefore, that has given an impetus to growth in these countries. And again, just like how we can sustain customers in corporate customers or key accounts, this business is also going to be sustainable. So that’s the idea. And besides this, the company has also planned to enter the spin-finish business for synthetic fibers as well as regenerated cellulose. And we are well on-track with this product range. And in this quarter these products are going to be launched, whereas another initiative which the company has done is to produce all the silicon-based raw materials in-house. Just like the surfactants we have backward integrated and finally, now we produce all silicone-based products in-house. Another segment that company will focus in the future is for coating chemicals in the technical textiles as well as the silicone wax lubricates. So in all, we see that we are very positive about the growth in the textile business.
Ganesh Nagarsekar
Understood. And sir, just a follow-up question on this. So you mentioned in the mix, we are focusing on the finishing chemical segment. So this is typically a higher-margin segment, if I understand correctly. So going-forward, will this be a larger part of our mix? And will that incrementally help our textile margin?
Edward Menezes
Yes, that’s one of the reasons that we have grown in textiles because of being able to penetrate large corporates with our finishing products and the product mix offering will tilt towards finishing chemicals. Having said that, we will also be very competitive in the pre-treatment segment because of our backward integration into our own manufacturers.
Ganesh Nagarsekar
Okay, perfect. Thanks a lot, sir.
Edward Menezes
Thank you.
Operator
Thank you. The next question comes from the line of Nitin Gandhi with Inoquest Advisors Private Limited. Please go-ahead.
Nitin Gandhi
Yeah. Thanks for taking my question. Yeah. I would like to understand like what is the team’s spend, which we have done who are yet to start contributing to the revenues? You said like the expense — salary expense and other things have gone up, but if you can quantify to help us out of 120 or 70 people for other than institution?
Ketan Sablok
No, I have not got your question. Can you…
Nitin Gandhi
Okay. Yes, okay. Let me reiterate. So during the commentary, we were told that approximately 190 people have been hired, 120 in institution and 17 other and some of them are yet to start contributing to the business because they are expansion related, which we are coming up in the next quarter and the quarter thereafter. And so basically, they are doing the events and other things. So, I just wanted to know what is the amount spent on these people for which business is yet to flow?
Ketan Sablok
Yeah. So, some of these 110 people that have joined in the consumer business, they have joined over between last year and the current year. So we they have — we are expecting much more contribution from them in terms of top line and revenue. So since they have just joined over the last — some of them have joined recently, some have joined last quarter. So their actual potential will start showing in the next few quarters. So that’s what we said that lot of investment in people has gone up and we’ve also added people in R&D and projects. So they — some products are coming in, some products, they will start contributing and developing as the projects come up. So, I cannot quantify that exactly in terms of numbers that who will give how much?
Nitin Gandhi
Okay. So there and team which is yet to for the new products or the new expansion. It’s already institution which is existing debts. I can understand which will move from 200 crore to INR450 crores over next two or three years. But besides that, is there a team which is yet to have the product or something or there is nothing like that?
Ketan Sablok
So there is nothing. We have, as I said, brought in people in R&D and in projects. So these people are in the process, they will — new products will come up. We — we cannot quantify that number. If somebody as a scientist is working in R&D, we may bring in one product, next quarter he may bring nothing. Next quarter, he may bring — develop five products. So lot of these investments are keeping in mind the long-term growth story. So that’s what we meant when we — when we talked about this.
Nitin Gandhi
Okay. So post the expansion, two units which are going in next two quarters, what is the peak revenue potential at existing prices?
Ketan Sablok
So at peak capacity, they should be closer to four times the asset.
Nitin Gandhi
No. So can you quantify the blocks? What is the total spend there?
Ketan Sablok
It’s about 100 INR40 crores.
Nitin Gandhi
Okay, so INR140 into INR4, maybe INR550 odd crores will flow from that 56 and institution will give an additional right 200 crores?
Ketan Sablok
Yes. Yes.
Nitin Gandhi
Okay. Thank you very much.
Operator
Thank you. The next question comes from the line of Deekshant with DB Wealth. Please go-ahead you. Deekshant, your line has been unmuted. May I request you to unmute your line and go ahead with your question.
Deekshant Boolchandani
Hi, am I audible?
Operator
Yes, sir. Please go ahead.
Deekshant Boolchandani
Yes. Congratulations management. We are — as we are also looking for growing opportunities in these environments. Firstly is my question on our expenses. So do you think that on our employee benefit expenses and as well as other expenses. Is this the peak of expenses that we are seeing or do we think that we need to spend more in order to cultivate our relationships for the new businesses?
Ketan Sablok
So see, people cost is such that as we grow, we’ll have to keep adding sources and resources will not only be in marketing, but also in other functions like production, quality, R&D, etc. So for me to say today that this is going to be the peak of employee cost would be a little difficult for me to say, but at least for the next couple of quarters, I think we should be around the same number. Once the projects come in and as they come in and as the — also as the — we grow the overall market in other geographies, we keep adding a few people. But maybe the rate of adding people would be slightly lesser than what we’ve done in this year.
Deekshant Boolchandani
Of course, of course, I mean, in order to grow, we must use our resources for sure. The idea of asking the question is that, is this the sort of expense that we can — plus-minus 10% on the plus side for the next four to five quarters. Do you think that this is the kind of expense plus 10%, 15% maximum that we can expect in the going four to five quarters?
Ketan Sablok
Yes, at least for the next year, we should be around this range plus-minus 10%, yeah.
Deekshant Boolchandani
Got it, sir. Sir, the next question is on front of a capital — capacity utilization for HPC, PHC and AHN. Could you like just give us a breakup of what is our current capacity utilization? I’m asking this, of course post our capex cycle has been completed.
Ketan Sablok
So currently, if you see in our ethoxylation business, our capacity utilization is almost close to 80% plus. So if I break it down in terms of the companies, in unit of, we are almost at 80%, 80%, 85% capacity utilization. We are at about close to, 90%, 95% capacity utilization. So in the core ethoxylation, we have to almost fully utilized in terms of capacity. So that was the reason why we decided to set up these new ethoxylation capacity. So that was the plan.
Deekshant Boolchandani
Of course. And so on our capex right now, how much capacity are we looking to add and what would be our utilization? I see from our last conference call, we had said that in Q3, Q4, we’d be revising — we’ll be looking at how much more capacity to add. Could you give us some color there?
Ketan Sablok
So we are adding about 30,000 tons of ethoxylation capacity. As I said, it will take us about three years or so for these capacities to get fully utilized.
Deekshant Boolchandani
Got it, sir. Got it. So when can we see the new capacity actually starting to take the actualization on the numbers in our book. I’m not saying from a revenue side, but maybe from a cost side, because of course, adding new capacity will lead to maybe more cost to us on running basis, right?
Ketan Sablok
Yeah. So the revenue should start showing up from Q2 of next year.
Deekshant Boolchandani
Okay, sir. Okay. Okay. Okay. So last question is basically apart from our institutional cleaning business that we are focusing on, what other growth drivers should we be looking for in the coming FY or in the coming five to eight quarters?
Ketan Sablok
I think in terms of growth areas, apart from the institutional business, export is the geography that we are very keen to grow. We’ve seen a good growth in the last few quarters. And that’s going to be one area where we are going to push products across all our verticals. So both HPPC and textile, the growth in the coming quarters is will mostly come — at a higher-rate it will come from the exports. We already, as we discussed, setting up in the process or have already set up various offices across key locations where we think could be the three business hubs.
So textiles, we are looking at Southeast Asia, Vietnam, Thailand and setting up offices. And for both HPVC and textiles, we are also looking at Turkey where we are will be soon setting up a base and when I say base, I mean, we may have a office with people over there who can, you know, go help in the business development. We’ve already set-up in UAE. So these are some of the initiatives which we are taking, keeping in mind you know, the growth that we anticipate in the next five years. And as I said, a lot of this will happen through the traction we get from the export market.
Deekshant Boolchandani
Amazing, sir. Amazing. Sir, just a last follow-up on this particular export fund that you have mentioned. Do we think that this year for us the next four to five quarters is going to be for us consolidating our forces and expanding on the exports or the numbers we might start seeing maybe at H2 of FY ’26? Or is it going to take some time?
Ketan Sablok
You’re talking about the export growth?
Deekshant Boolchandani
Yes, sir, because we are just — we are just starting the ramp-up. So just…
Ketan Sablok
So yeah, so you are right, it will probably start seeing some good traction H2 onwards.
Deekshant Boolchandani
Okay. Okay. Thank you so much, sir. Thank you so much. Best of luck. Wish you the best.
Ketan Sablok
Yeah.
Operator
Thank you. The next question comes from the line of Rohit Nagaraj with B&K Securities. Please go-ahead.
Rohit Nagraj
Yeah. Thanks for the follow-up. Just a couple of bookkeeping questions. One is what was the exports quantum during this quarter and for the nine months in absolute terms?
Ketan Sablok
Now this quarter we have done about INR156 crores of exports. And for the nine months, we are at about INR405 crores.
Rohit Nagraj
Right. And one last question. In terms of the debtors and inventory, how it has changed over the last three months? Has there been any material changes post the first-half? Thank you.
Ketan Sablok
So debtor has been slightly better for us. We have — our debtor days has come down by about four, five days, it has come down. Inventories are still high. We have maintained some high inventory because we were getting some raw material at good pricing. So as on December end, we had slightly higher inventory levels. But hopefully by the end of the year, we’ll be able to streamline and the inventories and the receivables for the meeting in line with or better than what it was last year.
Rohit Nagraj
That’s it from my side and best of luck. Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.
Edward Menezes
So thank you, everyone. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarification or would like to know more about the company, please feel free to contact our team or CDR India. Thank you once again for taking the time to join us on this call. Good evening.
Operator
Thank you. On behalf of Rossari Biotech Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.