SRF Limited (NSE: SRF) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Nitika Dhawan — Head, Corporate Communications
Rahul Jain — President and Chief Financial Officer
Analysts:
Meet Vora — Analyst
Sumant Kumar — Analyst
Arjun — Analyst
Naushad Chaudhary — Analyst
Jason Soans — Analyst
Sanjesh Jain — Analyst
Madhav Marda — Analyst
Ankur Periwal — Analyst
Archit Joshi — Analyst
Abhijit Akella — Analyst
Bhaskar Chakraborty — Analyst
Rohit Nagraj — Analyst
Krishan Parwani — Analyst
Surya Patra — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to SRF Conference Call hosted by Emkay Global Financial Services. 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 zero on a touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Meet Vora from Emkay Global Financial Services. Thank you, and over to you, sir. Thank you.
Meet Vora — Analyst
Thank you. Good afternoon, everyone, and thank you for joining us today. We at Emkay Global Financial Services Limited are pleased to host SRF Limited’s Q3 and nine months FY ’25 results conference Call. We have with us today Mr Rahul Jain, President and CFO of SRF Limited.
I would now like to invite Ms Nikita Dawan, Head of Corporate Communications at SRF to initiate proceedings for the call. Thank you. Over to you, Nikita.
Nitika Dhawan — Head, Corporate Communications
Good afternoon, everyone, and thank you for joining us on SRF Limited’s quarter three and Nine-Month financial year ’25 results conference call. We will begin this call with brief opening remarks from our President and CFO, Mr Rahul Jain, following which we will open the forum for an interactive question-and-answer session. Before we begin this call, I would like to point out that some statements made in this call may be forward-looking and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.
I would now like to invite Mr Jain to make his opening remarks. Thank you.
Rahul Jain — President and Chief Financial Officer
Thank you, Nitika. Good afternoon, everyone. I would like to extend a warm welcome to all of you and thank you for joining us today for SRF’s Q3 and nine months FY ’25 earnings conference call. I trust that you have had the opportunity to go through our results and the presentation shared with you earlier. I will begin the call by briefly taking you through the key financial and operational highlights for the period under review, following which we will open the forum for a Q&A session.
We have delivered a healthy performance this quarter, supported by a strong Q-on-Q uptick primarily driven by strong contribution from our chemicals business. The Packaging Films business also demonstrated stable performance. For Q3 FY ’25, the company reported gross operating revenue of INR3,491 crore, reflecting a 14% year-on-year growth. EBIT was at INR529 crore, yielding a margin of 15%, while PAT stood at INR271 crore, up 7% Y-o-Y. Overall, we have seen a decent recovery this quarter. Building on the momentum, we expect to finish the year-on a reasonably strong footing with a positive outlook for the next fiscal.
Coming to our segmental performance, our chemicals business reported revenues of INR1,496 crore during the quarter, registering a 7% Y-o-Y growth and a 10% growth over Q2 FY ’25. Also, when compared to Q2 FY ’25, EBIT margins were up 600 basis-points plus and around 100 basis-points plus when compared with corresponding period last year.
The Specialty Chemicals segment delivered a strong performance this quarter with healthy increase in revenues and margins. While the broader industry continues to witness some overhang of inventory buildup among agrochemical customers, our performance was strong, driven by positive traction in recently launched products and a gradual pickup in-demand for some key agro intermediates, which were deferred earlier.
Our cost-competitive pricing strategies and robust export market performance further supported revenue growth. With sustained momentum in-demand from agrochemical customers, we expect Q4 performance to improve even further. We have received registrations for some of our future active ingredients and are hopeful of ramping-up sales for some of these products during FY ’26 as customer demand picks up.
In our fluorochemicals business, domestic demand for refrigerants, particularly for room air-conditioners continued to be strong, taking our domestic rev gas sales to their highest-ever levels. While export realizations for some refrigerant gases were soft, we expect performance to improve in Q4, supported by stronger volumes and better realizations. The chloromethane segment delivered stable results during the quarter. We continue to focus on ramping-up sales of PTFE in both free flow and fine-cut grades and expect positive traction from the same from FY ’26 onwards.
The Packaging Films business delivered a steady performance this quarter with revenue growing 27% Y-o-Y to INR1,385 crore. Despite some demand-supply imbalance in, margins improved slightly, supported by strong sales of value-added products in both BOPET as well as BOPP segments. In India, BOPET demand and prices have remained stable, whereas BOPP witnessed demand growth. Meanwhile, in the aluminum foil segment, export sampling has started gaining momentum from the US and European markets. However, there was pressure on margins in the domestic market due to lower-cost imports from China.
Our technical Textiles business delivered a stable performance with revenues increasing 11% Y-o-Y to INR510 crore. The segment benefited from steady demand and highest-ever capacity utilization for polyester industrial yard and better traction for polyester tyrecord fabric, though lower demand and margins in melting fabrics impacted overall performance. To mitigate this, we are focusing on expanding our VAP sales. The ongoing melting fabric and dipping machine projects remain the key drivers of future growth and are on-track.
In our other segment, the coated fabric business experienced lower demand in the domestic market, though we continue to maintain a dominant position in this space. The laminated fabrics segment performed in-line with expectations. Looking ahead, the demand is expected to remain stable in the next quarter and the integration of our new hot lamination machine is expected to drive margin improvements. Additionally, the geopolitical environment remains uncertain and overall interest rates, both locally and globally probably with the exception of the EU may settle higher than earlier expectations. Overall reductions in interest rates over the past six to nine months should flow-through to the P&L during FY ’26.
The current quarter also witnessed a significant strengthening of the US dollar against major currency payers, which negatively affected the results to the tune of about INR34 crore. However, a weaker rupee is generally favorable for the company over the long-term, both as a net exporter and import priority pricing for some of our key domestic products. In-line with our commitment to consistent shareholder returns, the Board of Directors has approved a second interim dividend of 36% amounting to INR3.6 per share. This follows the earlier declaration of the first interim dividend at the same rate.
I am glad to share that SRF has been honored several prestigious awards, including the Gold Award for our annual Report ’23-24 at the Cap Global Communications Competition, a bronze medal in sustainability from EcoVadis, a globally recognized consortium for sustainability rating and the internationally recognized Gold TV awards for our Diversity, equity and inclusion campaign in her shoes. Additionally, our Packaging films business in Indor has been recognized as one of the top-25 industries for waste minimization and management at the CII for our awards. SRF strives to be a responsible corporate citizen. SRF Foundation works at the grassroots to empower communities.
As part of our Anganwari development program, we organized door-to-door visits and community meetings in Ropal to strengthen programs and retain students at these centers. We also held a two-day training for Anganwadi workers focusing on hands-on activities, workbooks and proper use of materials. In Rajasthan, we inaugurated a new Anganwadi center in in December attended by children, villagers, workers, supervisors from Graham and SRF Foundation team.
To conclude, SRF’s a multi-business structure has enabled us to navigate a challenging operating environment over the past two years with resilience. Despite headwinds across verticals, we have remained focused on strengthening our core foundation built on world-class infrastructure, a highly-skilled workforce and cutting-edge R&D capabilities. These trends reinforce our leadership position and equip us to capitalize on emerging opportunities as market conditions improve.
As we move forward, our focus remains on driving innovation, operational excellence and sustainable growth, creating long-term value for all our stakeholders. On that note, I conclude my remarks and would be glad to discuss any questions, comments or suggestions that you may have.
I would now like to ask the moderator to open the line for the Q&A session. Thank you very much.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to confirm the question queue, you may press star N2. Participants are requested to use answers while asking a question. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question comes from the line of Sumant Kumar from Motilal Oswal. Please go-ahead.
Sumant Kumar
Yeah. Hi,. So in our PPT, we mentioned our focus on maximizing HFC production for Quota requirement between ’24 ’26. So can you talk about how much R32 capacity expense and we can do under Qota system.
Rahul Jain
So, but again, I think the R32 position with respect to probably by 25,000 to 28,000 tonnes that we have is fairly well set. Again, as of now, there are no plans on-the-ground to expand — HFC 32 or R32 capacity. Whenever there is a need, we will be able to do that depending upon what situation the market presents. As of now, I don’t think there are any plans to increase HFC32 capacity.
Sumant Kumar
But how much we can expand under? What is the limit we have?
Rahul Jain
Sumit, Sumant, I don’t think we have done that calculation as of now in terms of what quota can we get. Again, quota is a combination of production as well as consumption. All right. So to that extent, depending upon what the situation pans out, we will be able to do our expansions or, let’s say, modify some of our existing plants to be able to do 32. But again, 32 may not just be the only HFC that we are doing. We are doing multiple other HFC and blends as well. So it really will depend on the situation at that point in time.
Sumant Kumar
So on overall basis, how much quota we have, do we have calculations on that?
Rahul Jain
So again, to be very frank about it, there is no quota setup that has been created as of now. These three calendars of the years ’24, ’25, ’26 have to pan-out, post which we will know what the quota position the government sets up.
Sumant Kumar
Okay. Thank you.
Rahul Jain
Thank you.
Operator
Thank you. The next question comes from the line of Archun from Kotak Mahindra Asset Management. Please go-ahead.
Arjun
Thank you for taking the question and congratulations, sir, on a good set of numbers. Sir, the first question is on the AIs. So we have talked of better 4th-quarter versus the 3rd-quarter? And in addition, we’ve talked in the presentation of we are on-track for the new AI. So in terms of the milestones that we would have had internally, are we on-track with the same in terms of samples sent, et-cetera? And if you could talk about what kind of — we have said the 4th-quarter should be better than the 3rd-quarter. Are we also indicating 4th-quarter should be better than the 4th-quarter of the previous year, which was actually a very good quarter for us too?
Rahul Jain
Okay, you have asked multiple questions, let me try and-answer each one-by-one. With respect to AIs, I think what we’ve done and in terms of our internal targeting, we are in fairly good shape. Now it also depends on two things, what registrations and what dossier we are able to get into, which is which is in good shape. But the final demand of this will come through only once the customers are looking to expand their production on that side. So to that extent, again, we are very hopeful that FY ’26 should be a good year for some of the AIs that have got registered. My sense is three or four have already got done. Hopefully, some of the sales traction will also start getting witnessed in FY ’26, maybe to a certain extent in Q4 FY ’25 as well.
Further, with respect to the question that you asked in terms of whether Q4 it will be a better quarter. We were typically talking about Q3 versus Q4, where I was saying Q4 is going to be a very good quarter. Also, when you look at this historically for specialty Chemicals business, Q4 always has been a good quarter always. So to that extent, I have not looked at that and compared it with Q4 numbers, but I’m sure the way we are looking at it today, Q4 is going to be probably even better than the last quarter — last year, CPL-Y.
Arjun
Yeah. Sure. Thank you for that. Sir, the second question is regarding ref gas. So we have seen a slight uptick in our ’22 prices also in India. Given that PTFE is a key ingredient is R22 to make TFE, are we seeing increase in prices for the PTFE market also? And you have talked about and you said it in the previous quarter also that probably we would just start from the 4th-quarter and from FY ’26, we could see both grades doing well. If you could talk about a little bit in terms of what pricing improvement we could see and what’s our current utilizations or do you expect FY ’26 — I mean, mean for FY ’26, we should be maybe 3,000, 4,000 tons or higher?
Rahul Jain
Yeah. So again, PTSE is being driven by two or three things today or the suspension grade plus some of the free flow and the fine-cut positions that we are creating. Now domestically, I think we are doing fairly well, but there is pressure on PTFE also given current pricing. And again, we’ve not seen very significant increase in domestic prices on PTFE. The way we are looking at it also is that as our sampling for the international market starts to get approved, there will be export traction that we should see building out on PTFE as well. It’s at that point in time where we will believe that things have changed for the better. And once export starts to kick-in, hopefully better utilization of PTFE for FY ’26 is we are — is what we are targeting today, Arjun.
Arjun
Sure, any guidance in volumes, what we possibly can do? Generally, we don’t do that, Arjun.
Rahul Jain
So I would keep my chest and hopefully they say that we will be much better going-forward.
Arjun
Sure. Thank you and wishing you all the best. Thank you again.
Operator
Thank you. The next question comes from the line of Chaudhary with Birla Mutual Funds. Please go-ahead.
Naushad Chaudhary
Yeah, hi, thanks for the opportunity and congrats on a good set of numbers. First on the Raf gas business side, sir, if I look at it four, five years back-in domestic market, there were three, four player. Eventually when things started phasing out, other peers started shifting focus to some other businesses and we kept adding capacity and now moving to HFO as well. Does that mean eventually in next couple of years, we might have kind of virtual monopoly kind of situation in the gas business versus the market-share we have today, how you look at your business three, four years down the line? Thank you.
Rahul Jain
I don’t think it is going to be a monopolistic situation,. I think we’ve always seen imports on HFCs coming in. That I think is continued — will probably continue to a certain extent. And I’m not really sure with respect to what pans out in, let’s say, next three to four years from a market perspective. The only couple of things that I want to talk about is the fact that what we are seeing is AC manufacturing in India going up very significantly, roughly, let’s say, about from 15 million ACs. If you aggregate all of these up, the demand for ACs is going up.
Operator
And sir, sorry to interrupt you, sir, you’re not audible Mr Rahul Jain.
Ladies and gentlemen, please stay connected while we reconnect the management line.
Rahul Jain
Hello?
Operator
Yes, sir, you can go-ahead, sir.
Rahul Jain
Okay. Naushar, I was continuing to reply to your question while the line got disconnected. So what we are seeing is that there will be growth in the AC market that will happen over a period of time, which should augur well for, let’s say, the overall domestic demand for — for the HFCs and more specifically 32 as well. So that’s the way we look at it. I don’t think it’s a monopolistic situation where we know there are announcements by other players about 32 expansion. Let’s see how that pans out.
Naushad Chaudhary
And from a HFO point-of-view, is there really any tech barrier or can anybody easily enter by investing some money into this gas?
Rahul Jain
And what we have said in the past, is that we are looking at the fourth-generation gases. We are — we are a key player. We are doing it through our own technology. I think we will let it be at that rather than comment on what others are doing around.
Naushad Chaudhary
Okay. Final one, in the cycle recovery, so we have invested so much in our spectrum, we have created a gross block. Do you think in the — if cycle recover your commercials of the pipeline molecule at least for the initial first year of recovery should accelerate and should be better than your expectation then it should normalize. Is that how we should look at it?
Rahul Jain
And the way we are looking at it is that you are starting to see some recovery in the April cycle. Because the customer traction is good, we are also looking at Q4 again, like we have said better than Q3. I think we’ve said that probably earlier in the early part of the year as well that H2 will be better than H1. I think that’s the scale that is — that is panning out in the way that we thought even in the beginning of the year. I think there is some recovery that has happened. Again, geopolitically and various issues still persist. Let’s see what happens, but we are fairly confident of what Q3 and what FY ’26 has in-store for us.
Naushad Chaudhary
Sure, sir. All the best. I’ll come back-in the queue. Thank you.
Rahul Jain
Thank you.
Operator
Thank you. The next question comes from the line of Jason Soans with IDBI Capital. Please go-ahead.
Jason Soans
Yeah, sir, thanks for taking my question. Sir, just wanted to understand from a ref gas pricing trajectory point-of-view, of course, the middle of the quarter, there were some news regarding a reasonable and a very, very big price increase in terms of a US distributor. So just wanted to know your take on how to — I mean, of course, I’m not getting into specifics and probably that was more of a one-off kind of thing. But just in terms of a pricing trajectory, if you could give us some color on how the Rev gas pricing is looking domestically as well as in the export markets.
Rahul Jain
Again, I can’t comment on each of — so the way I would look at it is that we have seen some price increase happening, increase happening both in the domestic and to a certain extent, that’s also been above for the international markets and to a certain extent, local China prices also to that extent. Now when we think about it, and again, I think we’ve talked about in the past also, we’ve seen historical low prices of HFCs coming through probably for the past, 18 24 months. Now this cycle had to recover at some point in time. The way we are looking at it is pricing is going to be stronger.
It is going to be a positive. But again, when we think about it, see historically also when there is a long-tail in terms of low pricing, we also see a an uptick in prices, which is very strong. Hopefully, that can continue and give us better realizations on gases, especially on 32 as well. Again, we’ve also commented that other — some of the other HFCs, we’ve seen lower export prices in the last quarter. Hopefully, some of that negative can also turn into some positive.
Jason Soans
Sure. Thanks for that, sir. And just in terms of ballpark, sir, how much would be exports and how much would be domestic in terms of Rev gas?
Rahul Jain
As of what are we talking nine months Q3.
Jason Soans
On a full-year — on a full-year basis, nine months or a full-year basis, roughly nine months, how would that be? Sports would probably be just one set, I’ll come back with the number.
Rahul Jain
Okay. Okay. Sure, sir. Yeah. Just one thing. Oh, yeah. About 40%, 42% is export in terms of tonnages.
Jason Soans
40% to 42% in terms of tonnages is exports, right?
Rahul Jain
As far as-is all I’m talking.
Jason Soans
Yeah. Okay. So that’s exports, 40% to 42% and 58% is domestic. Okay. Got it. Got it. Okay, sir. And sir, just wanted to also get your view on, I mean, margins have recovered very, very smartly at 24.3%. I’m talking on a console level. So you know from the sub 20% levels and you of course alluded to a good recovery going ahead. So just wanted to know, sir, what are we doing differently? Of course, I understand that environment has not changed considerably. Still things are quite difficult in terms of the business as such. So just wanted to know from your point-of-view, could this be looked at as a sustainable turnaround from here? And what are we doing things differently in a tough environment.
Rahul Jain
So to be frank about it, I think we had also said this in the past that when we look at FY ’24 margins versus FY ’25 overall margins. And again, we’ve said this multiple times, we don’t look at margins on a quarter-on-quarter basis. It’s best to look at it more on an aggregated basis because there will be seasonality, volatility, customer demand, various factors playing out. Now, when you think about margins just Q-on-Q, when you’re looking at Q2 versus Q3, yes, there has been a smart recovery that has happened. I think we had also alluded to the fact that this is likely to happen.
Given some of our new products have started to kick-in, given some of our, let’s say, existing products also have started to show some better traction, we believe margin profile can improve from here when you look at it on a Q3 versus Q4 basis. But again, going back to it from an aggregated year-on-year basis, again, I think 2% plus-minus from a FY ’24 versus FY ’25 perspective should still be the target when we think about it overall. When you think about margins in Q4 FY ’24, we were probably at about 30% overall. So I don’t remember the number, but yeah, that may have been the case. Now purely from that perspective, we will see — we will see some positives for Q4 in FY ’25 as well.
Jason Soans
So margins are 20 — you clocked in 27.4% for the chemicals business in Q4. Just wanted to tell you. So can we look at a better margin there?
Rahul Jain
What to be looked at purely from that perspective, go back to FY ’23, probably in — in 30% plus ranges.
Jason Soans
That’s right. Yeah. Okay. Okay. Sure, sir. Thanks. That’s all from my side.
Rahul Jain
Thank you.
Operator
Thank you. The next question comes from the line of Sanjesh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah, good afternoon, sir. Thanks for taking my question. First one…
Operator
Yeah sorry to interrupt, sir, you’re not audible. MR. Sanjesh.
Sanjesh Jain
Am I good now?
Operator
Yes, sir, please go-ahead.
Sanjesh Jain
Okay. Thank you. Good afternoon, Ralji. A couple of questions. First on the Specialty Chemical, I thought that Q4 is going to be very strong. What is the sense are we getting? It is a restocking demand which they are seeing or there is an underlying recovery in the agrochemical demand or it is that we have sitting on a lot of approval and that is driving. So what exactly is playing out so strong for specialty chemical for us and in general for.
Rahul Jain
And I think it’s a combination of all of these factors. I think to a certain extent restocking is happening. I think to a certain extent balance sheets of some of the customers, they are probably also looking at getting this from a Q3 versus Q4 perspective because their financial year typically ends in December. And therefore, some of their future requirements they are looking to price out or take delivery for from Q1 onwards. So there is restocking, there is some underlying recovery that is happening. So multiple factors playing out, Sanjesh. And again, customer traction seems pretty decent going-forward as well.
Sanjesh Jain
And in the Q4 when you see a significant portion of incremental demand is coming from the new products or even the existing products.
Rahul Jain
A combination of both. Some of our existing products have seen a bit of a rundown when we look at the nine-month period. And to that extent, some of the existing products are seeing some good traction, but yes, certainly new products are providing a positive.
Sanjesh Jain
And one last question here. In your opening remarks, you said that you also had a better margin for Specialty chemical in this quarter. Was it more operating leverage or it’s that the cost has come down and that is benefiting us? What is — what is driving margin improvement for specialty Chemicals?
Rahul Jain
I think again a combination of both. To a certain extent, pricing has improved. To a certain extent, I would say operating leverage because newer plants are starting to kick-in, that’s giving the positive. And I would also say that volumes have also picked-up. So all of those three are adding to the margin. So when you say volumes have picked-up, it also adds to the operating leverage. When you say that new products have started to kick-in, therefore, again, operating leverage is a positive and to a certain extent pricing as well. I think combination of all of these factors, but I would really say volumes and to a certain extent, new products are creating the positives.
Sanjesh Jain
Got it. One last question. You looked a little cautious on the US HFC demand. Why you seem cautious given that industry-wide there appears to be some sort of shortage.
Rahul Jain
So I have not talked about US HFC demand. Again, thematically, US has gone through now another large cut on the HFC side. And therefore thematically there will be lower demand from the US. Yes, to a certain extent, what we have seen also is availability of the product and therefore some positive developing on that side is purely visible. But I’ve never said that we are negative on US demand. I have already said that pricing going-forward seems to be in good shape.
Sanjesh Jain
Got it. No, in your presentation, there was a statement, sorry, not in your opening remark, my bad. But got the point.
Rahul Jain
But I think that’s a thematic, Sanjesh, that thematically, because US will have to cut their GWP positioning because of the protocol, there will be a lower demand. There would also be a situation where because of, let’s say, lesser use of 125 32 goes up. So that’s the mechanics operating between the HFCs overall.
Sanjesh Jain
Got it, got it. Structurally next year, we should have more refrigerant gas exports than the domestic or because of the quota regime, you want to maximize the domestic quota than the export one. How you want to place yourself for the longer.
Rahul Jain
You’re talking about FY ’26.
Sanjesh Jain
I’m talking about CY ’25, correct?
Rahul Jain
Okay. Again, I think it’s been a stated position that we want to increase our domestic positions given quota positioning playing out. But we are also therefore happy to export our — because we have fairly large capacity on this side. Hopefully, both can work-out well. I think mix between 40% to 50% on HDFCs still is a good mix to have in terms of domestic versus export.
Sanjesh Jain
No, that’s fair enough. Pretty much clear. Thanks. Thanks, Rahul for answering all those questions and best of luck for the coming quarter.
Rahul Jain
Thank you.
Operator
Thank you. The next question comes from the line of Madhav from Fidelity. Please go-ahead.
Madhav Marda
Hi, good afternoon. Thank you so much for your time once again. I just wanted to check on the gas pricing. So obviously, there has been this decent increase in price coming out of China for exports of HFCs. I just wanted to understand how does our pricing contracts work-in India and in the key export markets like Middle-East and US, like are these quarterly contracts or monthly contracts or basically the impact of the increase like over what duration of time does it start flowing into our P&L?
Rahul Jain
Yeah, even for US market, there will be some contracts that you will like, right? Again, the way domestic market operates is largely spot — but OEMs would be different. So the trade versus, let’s say, the OEM market would operate differently. OEMs typically a monthly maybe in some situations, a quarterly position, but largely, I would say some of the price benefit that we have seen should start to percolate down in Q4 as well.
Madhav Marda
Yeah, that’s what my question was that given some of this price increase has been more recent, is there some price ac benefit which will flow-through more in Q4 versus Q3 in our key markets? Is that the right way to think?
Rahul Jain
Keep telling you each pricing of each gas for each quarter very difficult to do that now. And thematically, pricing is higher, that’s what we would see.
Madhav Marda
Okay, got it. Got it. Thank you.
Operator
Thank you. The next question is from the line of Ankur Periwal with Axis Capital. Please go-ahead.
Ankur Periwal
Yeah, hi, sir. Thanks for the opportunity and congratulations on a good set of numbers. First question on the Specialty chemical side. Again from a demand recovery perspective, you did highlight that there is a general uptick — volumetric uptick from the existing portfolio as well. But what’s — what’s your thoughts on pricing front, at least for the existing portfolio, wherein there was some bit of pressure earlier and we had highlighted that we will be trimming our cost as well to come to negate that negativity. So where are we?
Rahul Jain
And anytime is Ankur, I think we commented on that also in our presentation to a certain extent, we will be able to mitigate some of the price negatives coming out of China. But it won’t be 100%. There is a price reduction in some of the key products that has happened. We will continue to fight for our share of those products. We will continue to cut our costs around it. There will be tech interventions around it. All of that we are doing. Some of that benefit we will start to see probably in Q4. Also, there is work going on in terms of cost of certain other products, which should pan-out over a longer period of time. I can tell you that there is still some pricing pressure that is going on, although we are starting to see some positive traction on that side where prices is starting to go in chap of it, but there is still price pressure on this.
Ankur Periwal
Okay, fair enough. And for the new AI is that we have been working with the global innovators, most of them have already been cracked at the R&D approval stage, etc., is done. Are we seeing pricing pressure over there as well or it is largely for the older portfolio that is seeing pressure?
Rahul Jain
Again, like I said during the initial remarks, we are seeing some of the registrations that we had — we had taken for coming through. Those have come through. Now as we will start to see traction building on some of those AIs, we will start to see more volumes. Again, because these are so new, I can’t even say that there is pricing pressure is. Pricing pressure will be witnessed, let’s say one — let’s say for some of the products we were selling it at $35, which has come down to $25, $28, that’s the pricing pressure that you end-up seeing. As these pan-out, we will see some positive on that side. Now whether there is pricing pressure, I really can’t comment on that, Tankurv.
Ankur Periwal
Okay. Fair enough. Fair enough. Secondly, on the PTFE side, you know, we have been sort of trying to getting the product approvals there, both in the domestic and international market. Any timelines or anything further that you can share over there in terms of ramp-up and over what timeframe?
C
Is out, there are — there are positive traction that we’ve seen from some of our global customers. Hopefully, that will pan-out positively more towards FY ’26 than let’s say, Q4 FY ’25. Sure. And this will be both commodity as well as the specialty grade. C As of now, we are only talking about INR3 crores, the suspension which is a pure commodity-type of grade plus the free flow and the fine-cut. So the free flow and fine-cut are platform more specialized, which has already gone out for sampling and in the process of getting customer approvals on it. Sure. Great. Last question on the capex guidance, if you can share some thoughts. C Yeah, again, for FY ’25, I think generally speaking, we should be in the — in the range of about INR1,500 crores overall cash spend. For FY ’26, current projects and let’s say, certain future projects, we should probably be again in the range of INR1,500 crores to INR2,000 crores. Hopefully, next year onwards, there can be some kick-in on the investment cycle and therefore, some more traction developing on that side. Great, sir. Thanks a lot for your answers. All the best. Thank you.
Operator
Thank you. The next question is from the line of Ashit Joshi from Nuvama Institutional Equities. Please go-ahead.
Archit Joshi
Thank you for the opportunity, sir, and congrats on a good set of numbers. I have a couple of short ones. First on packaging films, the aluminum foil capacity, where would we be in terms of utilization and the likely ramp-up ahead of us?
Rahul Jain
So roughly speaking about 55% for Q3. But again the way it is, let’s say the learning cycle on this has been longer than what we expected. And therefore, I can also tell you that the product is now also out into Europe and US for approval. Again, like I — it’s probably a similar story to PTFE as well, where we believe traction develops on these products in FY ’26, you are all aware that there has been a duty ADD from an India market that is probably being proposed on this side. Hopefully, some of when that gets notified, probably the Indian market will start to show some positive trends in pricing as well.
Archit Joshi
Sure, sir. Thanks for that. Sir, second one, like you were mentioning before about the pricing pressure and our existing spec chem portfolio. Portfolio and I think DFPA has been one of the key losers there. Has anything changed on that account with respect to volumes? Of course, pricing will be a function of different market forces, but at least volume shaping up well?
Rahul Jain
Yes. So again, like I said, I think thematically what we are starting to see is some inch up on pricing, right? And but to when I had also answered Ankur’s question, some of the tech intervention and some of the interventions that we have done are also starting to show some positive signs that we are looking on that side. Volumetrically, I think we are slightly higher, if not flattish, price remains pretty much stable. Hopefully, some of that pricing pressure that is there gets down to a certain extent when we think about Q4 and going-forward in FY ’26 as well.
Archit Joshi
So certain volumes will be higher than going ahead. That’s what I was trying to get to.
Rahul Jain
Then Q3 versus Q2 certainly.
Archit Joshi
Sure, sure, sir. Got a point, sir. Thanks and all the best.
Operator
Thank you. The next question is from the line of Abhijit Akela from Hotak Securities. Please go-ahead.
Abhijit Akella
Yeah, good afternoon. Thank you so much. Just two questions from my side. One on specialty Chemicals. So just with regard to — given that we are already at the end of January, is there any…
Rahul Jain
So you are too quick for me to understand what you’re saying.
Abhijit Akella
Yeah, sorry, I’ll go slower. On Specialty Chemicals for fiscal ’25, given that we are just two months away from the close of the financial year, is there any update you might be able to help us with in terms of the expected growth for this full financial year?
Rahul Jain
So give me just one minute, let me talk about it. Give me one to answer your question. So again when we think about specialty chemicals year as a whole, Nine-Month to nine months, I think we have seen some increase in sales. So that’s a positive. Again, given our guidance for FY ’25, we think there should be a positive trend on that side as well. But the 20% number is certainly out-of-the picture, given the kind of environment that we will live with during FY ’25. Hopefully, we can get back on our growth track in FY ’26, Abhijit.
Abhijit Akella
Understood. Thank you. That’s very helpful. And the other one I just had was on the R32 capacity. Where do we stand-in terms of capacity utilization for that? I know we wanted to maximize output in CY ’24 through ’26. So sort of how are we progressing in terms of the utilization?
Rahul Jain
Let’s say about 7% to 5% in terms of overall capacity utilization month-on-month, we would have hit that peak. Hopefully, hopefully in Q4, we should see again what we had suffered with was EHF, right, availability. I think that problem is now pretty much sorted-out. Hopefully, you will see — you will listen to an announcement on HF probably in the next few months, which should give us the ability to produce more. My sense is we will probably in the 65% 70% overall nine months utilization range. But when we think about, let’s say, the overall year as a whole, hopefully better than that is what we can target.
Abhijit Akella
Understood. Thank you so much, sir. That’s very helpful. All the best.
Operator
Thank you. The next question is from the line of Baskal with Jefferies. Please go-ahead.
Bhaskar Chakraborty
Thank you very much. Hi,. Just wanted to check with you on the seven new AIs that we have been working on. How many of these are patented vis-a-vis generic? And has any of these started contributing to our revenues in 4Q or 3Q FY ’24?
Rahul Jain
I think, to a previous question, I had given that answer that there we have got some registrations that are now completed in our favor. As customer traction builds in, you will start to see revenue position from that also building. And I think most of them are patented, a couple of them maybe also generated, but I’ll have to check that and come back to you.
Bhaskar Chakraborty
Okay. Thank you. And just one other question, which is that across your portfolio, currently, what kind of increase will you have seen at your webcast portfolio export realizations compared to the last quarter.
Rahul Jain
For rare gases, yes. So again, like I said, I think from an export perspective, gas prices on 32 has been better, while we have also seen softer prices for other HFCs, which hopefully should recover in Q4 as well.
Bhaskar Chakraborty
As a portfolio level, would you be positive or would you be flat?
Rahul Jain
From a portfolio level? These are all different product markets.
Bhaskar Chakraborty
Okay. Thank you.
Operator
Thank you. The next question is from the line of Rohit Nagraj from B&K Securities. Please go-ahead, sir.
Rohit Nagraj
Yeah. Thanks for the opportunity and congratulations on good set of numbers. First question is on-again delving into ref gases. For the first-nine months, given that the quotas have kicked-in from January for the US market, what is the kind of overall growth that we have seen in terms of volumes for overall portfolio of…
Rahul Jain
US market?
Rohit Nagraj
Overall — and then US obviously will be lower, I guess.
Rahul Jain
Again, when we think about export, I think overall export volume growth has been roughly in the range of about 7%, 8%. All that is put together, HFCs.
Rohit Nagraj
Okay. And domestic, so I mean, combined together, together domestic and exports for the first-nine months?
Rahul Jain
Yeah. So domestic has been definitely pretty significant. I think it’s about 60% overall.
Rohit Nagraj
Okay. Fair enough. Second question again on the front. So we have done the registrations. From the customer perspective, have they also done with the registrations and where are they in-process of commercialize or marketing their products? Just broader sense on whatever.
Rahul Jain
That customer has already done their registration. We will get included in the dossier. And once that happens, we will see the positive traction on it when they start to see demand and start to buy the product.
Rohit Nagraj
Yeah, fair enough. That’s all from my side. Thanks and all the best.
Operator
Thank you. The next question is from the line of Parawani with JM Financial. Please go-ahead.
Krishan Parwani
Yeah, hi, jee. Congrats on good set of numbers. Just two couple of them. So firstly, when you mentioned large contribution from AI is expected in FY ’26. So just wanted to understand.
Rahul Jain
We will start to see some positive on that side. Don’t miss corporate question.
Krishan Parwani
Okay, okay. Fair enough. I mean a point taken. So just what percentage of incremental spec chem sales do you expect from AIs in FY ’26?
Rahul Jain
Again, I can’t comment on what percentage. I can only tell you that there will be positive traction. The existing one big AI that we are doing is P32, but it’s slightly been smaller when we think about overall volumes of P32, which will start to kick-in probably from Q4, that’s the position that the customer is at. And again, some of these probably two to three, we will start to see some traction in Q1, Q2 as well. Hopefully, by Q4, some of these would have ramped-up and some of these would have started as well.
Krishan Parwani
Got it, got it. And on the left gas capacity utilization, did you mention 65% 70% in nine months?
Rahul Jain
Roughly 132 is what I talked about.
Krishan Parwani
Okay. And so overall, what is the capacity utilization, let’s say, 65,000 tons what we have versus the utilization in nine months FY ’25?
Rahul Jain
Again, I’ll have to delve into that detail, probably in the range of about 75% overall.
Krishan Parwani
And so do you expect to achieve a peak utilization in FY ’26 or would you be leaving some room for FY ’27?
Rahul Jain
Again, the intent would be to achieve full utilization. But again, it would depend on current pricing, markets of various other elements around it.
Krishan Parwani
Got it. And just a last bit. I think I missed out on the chemicals EBIT margin guidance for FY ’26. Did you give it or did I miss it?
Rahul Jain
I never give guidance.
Krishan Parwani
Okay. So do you — are you going to give or no. After media ask you. Not happening,. Good try, but…
Rahul Jain
No, no, fair enough, fair enough. No, no, I genuinely missed out.
Krishan Parwani
But thank you. Thank you for patiently answering my question. Thank you.
Operator
Thank you. The next question comes from the line of Surya Patra with PhillipCapital. Please go-ahead.
Surya Patra
Yeah, thanks for the opportunity, sir. And good set of numbers — congratulations for the good set of numbers. First question is on the — on the specialty chemical side, see, in the last almost like six, seven quarter we have capitalized a specialty chemical project over around INR200 odd crore. And generally, we have been saying that our new projects are backed by customers contract and all that. So if there is a visibility now coming better in terms of the demand and all, so what is the kind of a utilization that one can target in, let’s say FY ’26.
Rahul Jain
Again, the way we’ve looked at it is that, yes, the capitalization has happened. I think the fact is that we believe for FY ’26, there will be a better capacity utilization that should come through. There is the AI block that we’ve also put in, which should give us traction on the AI side. And overall, I would say that it’s a chemical business, it does not ramp-up like — it’s not a turnover switch where you can ramp it up. It will probably take between 12 to 18 months for it to fully ramp-up.
Surya Patra
Okay. So that means if the trend reverses really, then we will by ’27 see the full benefit of this expanded capacities. That understanding would be right, sir.
Rahul Jain
More or less, I would say. Okay. We would target it to be faster, but yeah, more or less that should be a good target.
Surya Patra
Okay. Regards the refrigerated gas, sir, so there are contradicting trends. While in the export market, it looks like the pricing is kind of moderating or have been moderating so-far. And on the domestic side, we have seen price rise and also we are anticipating there is a kind of a significant optimal utilization of the assets to qualify for whatever the quota that is likely. And there is a kind of a Chinese supply that is anywhere that has been continuously there. So given all these, so how should one think because, see this quarter or following quarter could be because of the seasonality, we can see a better pricing situation for. But generally for FY ’26 as a whole, how should one think if you can give some sense, sir.
Rahul Jain
Okay, I think Sur, you are answering the question yourself. Again, the fact is that we have seen some pricing positive on the HFCs. I think that’s a trend that can continue given where product positions are, given where availability of the product in the market is some uptick in price can continue going-forward is what we certainly believe. But what will the price be? Really nobody knows.
Surya Patra
Okay. Just last one point here, sir. Regards to — you mentioned that for the nine-month period, the export share of refrigerant gas in terms of volume is 42-odd percentage. For this quarter, could you see what similar now? Similar, sorry, I missed it. Thank you very much. Yes. Okay. Okay. Sure. Thank you, sir. Wish you all the best.
Operator
Thank you. The next question is from the line of Niril from Orega [Phonetic]. Please go-ahead.
Unidentified Participant
Hi, sir. Thanks for giving me the opportunity. I’d might use your handset, sir.
Operator
You’re not clearly audible, sir.
Unidentified Participant
Hello. Am I audible now?
Operator
Yes, sir. Please go-ahead.
Unidentified Participant
Okay. So my question is with respect to the spread. So in the presentation, you had mentioned that…
Rahul Jain
I was able to hear you. Your question is with respect to spread both spread or capex spread?
Unidentified Participant
Opex spreads, packaging film segment. So over there, in the presentation, you had mentioned that the Chinese guy are impacting your Thailand operations. So if you can give an outlook of what are the spreads prevailing in Thailand, for example, in India, the BOPET spreads are roughly 40 42 kgs. So what could be that be prevailing in the Thailand?
Rahul Jain
I would typically say maybe 5% to 20% lower. That’s probably the range. Again, I have not looked at it from that perspective. Maybe you want to send that question out and if possible and within permissible, we’ll try and-answer it.
Unidentified Participant
Okay. Thanks a lot, sir. And just to add one more question, that is, are you observing any new BOPET or BOPP lines coming onboard for in the next couple of years globally?
Rahul Jain
Again, you are talking SRF perspective or you are talking market perspective, market perspective. There are multiple lines where I should do, but given the current scenario, I think some of those might get delayed as well.
Unidentified Participant
Okay, understood, sir. Thanks a lot. That’s from my end.
Rahul Jain
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for the question-and-answer session. I now hand the conference over to the management for closing comments.
Rahul Jain
Thank you, everyone. I hope we have been able to answer all your questions. I wish that each one of you remain safe and healthy. If you have any further questions, we would be happy to be our assistance. We hope to have your valuable support on a continued basis as we move ahead. On the behalf of the management, I once again thank you for taking the time to join us on this call. Bye-bye.
Operator
Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us and you may now disconnect your lines.