SRF Limited (SRF) Q3 FY23 Earnings Concall Transcript

SRF Limited (NSE:SRF) Q3 FY23 Earnings Concall dated Jan. 31, 2023.

Corporate Participants:

Nitika Dhawan — Head of Corporate Communications

Rahul Jain — President & Chief Financial Officer

Analysts:

Abhijit Akella — Kotak Securities — Analyst

Rohit Nagraj — Centrum Broking — Analyst

Sanjesh Jain — ICICI Securities — Analyst

Vishnu Kumar — Spark Capital — Analyst

Surya Patra — PhillipCapital — Analyst

Rohan Gupta — Nuvama Wealth — Analyst

Vivek Rajamani — Morgan Stanley — Analyst

Madhav Marda — Fidelity International — Analyst

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Tanveer Singh — Nuvama Wealth — Analyst

Keyur Pandya — ICICI Prudential Life Insurance Company Limited — Analyst

Ranjit Cirumalla — IIFL Securities — Analyst

Shaleen Kumar — UBS India — Analyst

Resham Jain — DSP Investment Managers — Analyst

Tejas Sheth — Nippon India Mutual Fund — Analyst

Nitin Tiwari — Yes Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to SRF Limited Q3 and Nine Months FY ’23 Earnings Conference Call hosted by Kotak Securities Limited. [Operator Instructions]

I now hand the conference over to Mr. Abhijit Akella from Kotak Securities. Thank you and over to you, sir.

Abhijit Akella — Kotak Securities — Analyst

Yeah, thank you, Tanvi. Ladies and gentlemen, good afternoon and thank you for joining us on SRF’s Q3 and nine month FY ’23 post-results conference call. On behalf of Kotak Securities, it’s my pleasure to welcome Mr. Rahul Jain, President and CFO of SRF Limited to this call. We will begin the call with opening remarks by management, following which we’ll open up the floor for a Q&A session.

I would now like to invite Ms. Nitika Dhawan, Head of Corporate Communications at SRF to take proceedings forward. Thank you and over to you, Nitika.

Nitika Dhawan — Head of Corporate Communications

Good afternoon, everyone, and thank you for joining us on SRF Limited’s quarter three and nine months FY ’23 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.

Rahul Jain — President & Chief Financial Officer

Thank you, Nitika and good afternoon everyone and thank you for joining us today on SRF’s Q3 and nine month earnings conference call. I trust all of 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 have the open — we will open the forum for a Q&A session.

During the quarter, we have repeated a good performance, given the challenging times being faced by some of our businesses. The Technical Textiles and Packaging Films businesses continued to witness a difficult operating environment, while the Chemicals Business performed exceedingly well, both on operating and financial parameters.

On a consolidated basis, revenue grew 4% year-on-year to INR3,470 crore in Q3 FY ’23. EBIT stood at INR726 crore, down 9% on a Y-o-Y basis, which is largely attributable to the weakness in TTB and the Packaging Films Business. Profit after tax stood at INR511 crore in Q3 FY ’23, up 1% Y-o-Y. During the quarter, the Board has approved a second interim dividend of INR3.6 per share in addition to the first interim dividend of a similar amount declared earlier. This will result in a payout of INR106.71 crores.

Coming to our segmental performance, our Chemicals Business reported robust growth. Revenue grew 23% Y-o-Y at INR1,757 crore in Q3 FY ’23. Within the chemical segment, our specialty chemicals business delivered record performance with the successful addition of new products, that received substantial market traction, the ramp-up of the state-of-the art MPP4 facility at Dahej and strong demand for key products and downstream derivatives. High level of customer engagement with global innovators continues to be our USP as complex and advanced products and AI remain in focus. Our pharma intermediate plant is also being commissioned and should be ramped up fairly quickly. New capex are in line with the projects that we are doing for our key customers.

We have now made announcements on capital expenditure in the specialty chemical business over the last two quarters that aggregate more than INR1,000 crores. I am pleased to share that the Board has approved another project for setting up a new and dedicated facility to produce an agrochemical intermediate at Dahej, at a project cost of INR110 crore to meet the growing demand of the product in the future. In addition, a new building structure at Dahej was approved at a cost of INR40 crore to meet the future requirements. All these projects are expected to be commissioned over a period of one year. Our customer engagement, execution capability and operational excellence gives us confidence of the long-term success of the business.Our R&D and scale-up facilities were further augmented, developing a variety of new technologies and platforms to bolster SRF into next level technological play in the future.

Our fluorochemicals business registered healthy performance on account of several key factors, including strong traction in the domestic market for refrigerants, continued demand for our Dymel HFA 134a/P pharma grade gas, healthy contributions from chloromethanes and gradual ramp-up of volumes of the recently commissioned facilities. All of our fluorochemical plants are running well and full benefit of the recently commercialized chloromethanes plant should be available from next quarter onwards. The chloromethanes plant has been successfully ramped up. Outlook for domestic demand for HFCs remains strong and we are also witnessing traction from the U.S. market.

There is, however, a slight delay in commissioning of the PTFE plant due to certain logistical issues for which we have already put countermeasures in place. I’m also pleased to announce that the Board has approved a project to establish a range of specialty fluoropolymers at Dahej at a cost of INR595 crores. The project seeks to enter into the lucrative PVDF, FEP and FKM space, which caters to range of industries that include battery, chemical, coating, solar, automotive and aerospace. With a highly backward-integrated value chain, we believe that we will start to cater to the needs of a growing segment. The project is expected to be commissioned in 24 months.

In total, we have now announced more than INR1,700 crores of capex over the past nine months in our chemicals businesses, which demonstrates our commitment to invest in the business. At our Dahej site, we have also recently commissioned a new 20 megawatt captive power plant, which should allow us to optimize our energy costs at the site.

Our Packaging Films Business reported a revenue of INR1,203 crore in Q3 FY ’23. The business faced headwinds with several new lines getting operationalized, both in the BOPET and BOPP film segments in India and overseas. In addition, a decline in global demand, elevated energy costs in Europe, adversely impacted our Hungary operations. Surplus supply in the near term are unlikely to get corrected. But we do believe that BOPP will start to witness an improving trend going forward. Energy costs in Europe are also witnessing some softness and we are hopeful for better performance in the next quarter, while full benefit of the reduction in energy costs will likely reflect in the next financial year only. Our VAPs story remains on track and the aluminum foil project is also expected to start during the end of Q2 FY ’24. The company remains optimistic that Packaging Films Business is well-prepared as demand pivots towards global suppliers with multi-locational facilities. Furthermore, the business remains focused on operational efficiencies [Technical Issues] initiatives to mitigate volatility in this segment.

Moving on to our Technical Textiles Business, we reported revenue of INR426 crore in Q3 FY ’23, versus INR538 crore in Q3 FY ’22. The segment witnessed a subdued performance during the quarter owing to weak demand for nylon tire cord fabric and polyester industrial yarn. The company anticipates an uptick in the medium term, based on customer interaction. Belting fabric segment continues to do well.

Lastly, in our other segment, revenue stood at INR92 crore in Q3 FY ’23. Both the coated and laminated fabric businesses met expectations in a challenging external environment. The weak rupee also led to recognition of a ForEx loss of INR15 [Phonetic] crores during the quarter. We believe that some of this should unwind over the next quarter and given that SRF is a net exporter, a weaker rupee should aid to our overall profitability. Additionally, we also witnessed increased interest outgo during the quarter from INR29 crores corresponding period last year to INR62 crores during Q3 FY ’23. This is largely due to the current interest rate scenario prevailing both globally and locally. The Fed has remained steadfast in its interest rate increase cycle and so has been the RBI. While some of the interest amount can be attributed to larger borrowing profile, majority of the sale is due to the increased interest rates that we have witnessed.

You would also have noticed a recognition of a MAT credit previously written off, now being recognized. The company has recognized the MAT credit of INR52 crores during Q3 FY ’23, and additionally, INR22 [Phonetic] crores will be recognized in Q4 FY ’23. This has been necessitated due to the expected shift to the new regime in FY ’24 from an SRF standalone perspective.

I am pleased to share that during the quarter, SRF received multiple awards across its businesses and functions. SRF’s chemical facility in Bhiwadi, Rajasthan was awarded the Bhamashah Award for contributing to education and infrastructure development of government schools in Alwar, Rajasthan. SRF’s Packaging Films Business won the IAQ Quality Sustainability Award from the International Academy for Quality. And our fluorochemicals business unit in Thailand was honored with the Best Supplier award by Toshiba.

SRF continues to grow and evolve its businesses in a purpose-driven way. I am pleased to share that our CSR wing, the SRF Foundation launched SmartShiksha Digital Bus in three locations, namely, Kashipur in Uttarakhand, Bharuch in Gujarat, and Mewat in Haryana during this quarter. Furthermore, in our constant endeavor to promote Indian arts and culture, we organized a two-day Indian classical music concert, namely, SMARAN, to honor the birth centenary of Padma Vibhushan Ustad Ali Akbar Khan Sahab in New Delhi.

To summarize, SRF has demonstrated resilience in the face of external challenges in the Packaging and Technical Textiles segments with performance in our Chemicals Business being a notable highlights. The company’s ability to overcome headwinds is a testament to its strong foundation, its infrastructure, well-developed R&D capabilities and investments in opportunities across various segments. Overall, we believe our solid multi-business model will withstand external challenges and create sustainable value for all stakeholders going forward.

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 very much. [Operator Instructions] The first question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead.

Rohit Nagraj — Centrum Broking — Analyst

Yeah, thanks for the opportunity and congrats on strong Chemicals performance. First question is on PTFE. So you indicated that it’s been delayed. So what are the timelines that we are looking at in terms of commissioning and then probably in terms of the optimal utilization of the facility? Thank you.

Rahul Jain — President & Chief Financial Officer

So, Rohit, thank you for your question. We believe either by the end of Q4 this financial year or early next quarter, probably, very early in April, we should be commissioning the plant. From a ramp-up perspective, I think we are in fairly good shape to be able to ramp it up [Technical Issues] customers that we are already starting to speak with. We believe in, the next six months, we should be able to ramp it up very, very swiftly.

Rohit Nagraj — Centrum Broking — Analyst

Right. Got it. Second question is on the Packaging Films Business. So during the first nine months, on a year-on-year basis, have we seen a volume increase or is it flattish volumes and the prices have been — the impact on the margins?

Rahul Jain — President & Chief Financial Officer

So I would really say, Rohit, that the new facilities that we have commissioned has actually led to higher volumes when we compare it to corresponding period last year nine months. And therefore, when you look at it, our overall sales, on a nine monthly basis, in the Packaging Films Business have been kind of higher when we compare it. So about INR3,300 crores to about INR4,000 crores in the nine month period is what we have witnessed. Largely, I think it is volume-driven because majority of the — let’s say, when we think about it from a margin perspective, that has come down. Also, when you look at it from a utilization perspective, I think we’ve been fairly good in terms of overall utilization. Q3 utilizations would have ranged between 80% 85% and that’s the situation, Rohit, while Hungary there would have been a negative because of the fact that there is the higher energy costs that are prevailing on that side.

Rohit Nagraj — Centrum Broking — Analyst

Right. Got it, thanks a lot. Yeah, thanks a lot and best of luck, sir.

Operator

Thank you. The next question is from the line of Sanjesh Jain from ICICI Securities. Please go ahead.

Sanjesh Jain — ICICI Securities — Analyst

Good afternoon, Rahul Ji. Thanks for taking the question. First off, continuing with the packaging film, in our presentation, we have mentioned that we have also seen some demand tapering down. So it is fair to assume that the spread contraction, what we are seeing in the market, is a combination of both excess supply and demand weakness? Will it be a fair assumption?

Rahul Jain — President & Chief Financial Officer

It’s a fair assumption, but I think the comment in the presentation was more referring to Q3 as such, while not in terms of saying that the overall demand, when you look at it on an annualized basis, that is coming down. I think, let’s say, from a pure quarter-on-quarter inventory destocking and certain other things happening, that’s the situation that we saw just pure quarter-on-quarter, Sanjesh.

Sanjesh Jain — ICICI Securities — Analyst

No, it is nothing, it’s just a transitory one quarter kind of an impact, right?

Rahul Jain — President & Chief Financial Officer

That’s right, so from a demand perspective — but from a supply-demand perspective, supply still outstrips demand to a very large extent. And that’s the comment you would’ve seen in the overall packaging film commentary as well.

Sanjesh Jain — ICICI Securities — Analyst

Got it, got it. Second question, in the fluoro specialty side of the business, I appreciate the details you have given, but can you also…

Rahul Jain — President & Chief Financial Officer

So specialty or specialty chemicals business?

Sanjesh Jain — ICICI Securities — Analyst

Fluoro specialty — specialty fluoropolymer.

Rahul Jain — President & Chief Financial Officer

Specialty fluoropolymer, so you are talking about the new capex…

Sanjesh Jain — ICICI Securities — Analyst

PVDF, FKM and FEP, we said. Can you share further detail in terms of capacity, if you can, as well as one clarification, this entire process will be free of PFAS kind of a product? Is that the right thing to understand?

Rahul Jain — President & Chief Financial Officer

Yeah, so from an overall capacity — I am unable to share singularly the capacity, but overall capacity should be in the range of 4,500 tonnes or so when you look at it in a total perspective. In terms of saying whether the process is PFOA-free, I think the technology that we will be using will be PFOA-free.

Sanjesh Jain — ICICI Securities — Analyst

Okay, okay, fair enough. My last question, it’s a bookkeeping, so I will — so on the ForEx loss, what we have incurred, INR15 crore, it is more to do with the receivables and payables. Is that the right assumption, right, what flows through the P&L?

Rahul Jain — President & Chief Financial Officer

So what happened, Sanjesh, is there are certain types of liabilities that I always have on my book which don’t — which flow through the P&L and the restatement of weaker rupee will lead to a negative in that sense. And therefore, there will be a negative in the profit and loss account because of the liability restatement that happens. With respect — and the other pieces in it will always be the receivables and payables that we have, also to a certain extent, the hedges that we have created over a long period of time, which have always been a positive for us because of the sudden depreciation, it’s a small negative, that also flows through the P&L.

Sanjesh Jain — ICICI Securities — Analyst

Is it fair to assume a lot of it is just a book entry and not a cash loss, right?

Rahul Jain — President & Chief Financial Officer

Majority of it should be, yes.

Sanjesh Jain — ICICI Securities — Analyst

Got it, got it, got it. Thank you, Rahul Ji, and best of luck for the coming quarters.

Rahul Jain — President & Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead.

Vishnu Kumar — Spark Capital — Analyst

Good evening, sir, and thanks for your time. Sir, firstly on the Chemicals Business, good results. On the margin front, any thoughts as to which segment has done well for you? Is it the ref gas or spec chem and — because we have seen a Q-o-Q increase in the margins? So some thoughts on this.

Rahul Jain — President & Chief Financial Officer

So again, I would say that the ref gas segment has done decently well. There has been no erosion. It’s been slight positive, but the majority of this has played out in the specialty chemicals space, and that’s something that we believe has the — is the one that has aided our margins for the quarter.

Vishnu Kumar — Spark Capital — Analyst

Okay. Sir, in the spec chem again, within this, is it to do with any raw material or any pricing or margin increase or new product launches that is aiding this kind of a growth?

Rahul Jain — President & Chief Financial Officer

So it is a combination of all of those. To a certain extent, I would say there is a pricing benefit that has come in. If you remember, in the last calls also I had said that some of our specialty chemicals business is contracted in nature, as some of those contracts have got renewed, there is a pricing benefit that has come in. To a certain extent, we’ve seen weakness in some of the key raw material prices also, that’s also created some benefit. That’s how we would look at it. It’s a combination of all that. And yes, there are a couple of new products that have been launched, which have also given a positive in that sense.

Vishnu Kumar — Spark Capital — Analyst

Broadly, in the next couple of quarters, this EBIT margin level should sustain or any thoughts?

Rahul Jain — President & Chief Financial Officer

So, again, I think purely just going by the number in terms of whether the overall margin should sustain, I think we have a fairly good visibility over the next two — one or two quarters that we should be able to sustain these. But again, you have to also understand that we don’t look at it from a pure quarter-on-quarter perspective, right? Again, we said that, in the Chemicals Business, the intent is to go into more high-value-added products, both in the specialty chemical space and the fluorochemicals space. So when we look at it — and to a certain extent, the fluorochemicals business has also some seasonality that play out in it. Now when we look at it from a nine month perspective, again you would see that the overall margin has expanded. When you look at it Q-on-Q, be it comparative of corresponding period last year or the previous quarter, again, there has been an expansion. My sense is we can sustain this going forward. But businesses remain dynamic, Vishnu, and they will keep going through some business cycles. As of now, it looks pretty much in good shape.

Vishnu Kumar — Spark Capital — Analyst

Got it, sir. Sir, just wanted to understand what are the new plants that will come live over the next three, four quarters? Broadly, if you could just give us some thoughts on that — the plants that are going to come live across various segment.

Rahul Jain — President & Chief Financial Officer

Over the — let me just talk about the specialty chemicals first. The ones that will come in probably are the TIP [Phonetic], the TO-1 [Phonetic], the recent announcements that we had made for two or three products that will be there. We will have the — on the fluorochemicals side, the PH1 and PH2, which is the HFC production that will come onstream. We have the TO-1 that will come onstream. We have the water capex that we were doing, that will come onstream. There will be the dedicated P38 plant that will come onstream. So multiple — and again, I think we’ve given timelines on each of the projects from when they are coming onstream.

Vishnu Kumar — Spark Capital — Analyst

Got it, sir. And finally one question on the Packaging Films Business. Are we seeing some energy cost normalizing? So should we see some reprieve on that in the next couple of quarters in your international segment?

Rahul Jain — President & Chief Financial Officer

So again, I have said that in the initial commentary also. I think we are seeing some normalization in terms of energy costs in Hungary coming in. However, these are not significant from a Q-on-Q perspective. We believe, as we go through that journey, next year is when we will see significant benefit of that coming in.

Vishnu Kumar — Spark Capital — Analyst

Any rough margin trends you think this business will settle down at least?

Rahul Jain — President & Chief Financial Officer

Not really, we can’t be able to give you a percentage margin trend. But what — as a generic thing, what I can tell you is, wherever we are today from an annualized — from a quarter-on-quarter perspective, we should be executing better and next year should be even better than this.

Vishnu Kumar — Spark Capital — Analyst

Got it, sir. Thank you and all the best.

Rahul Jain — President & Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead.

Surya Patra — PhillipCapital — Analyst

Yeah, thanks for the opportunity, sir. Sir, the first question is on the core chemical, the specialty — Chemicals Business EBIT margin increase. Sir, is it –see, in the current financial year, we have seen a kind of much improved margin scenario compared to the historical period. So whether it is due to largely because of the improved product mix to downstream and the active ingredients rather than the initial compounds? If it is so, could you also share what would be the share of this derivative — downstream products or the active ingredients [Technical Issues] in the overall Chemicals business?

Rahul Jain — President & Chief Financial Officer

So, Surya, the answer to that question is absolutely right when we say that the product mix has been better. We are producing a larger set of derivatives. We are doing — we are bringing in new products that have given us the benefit, SS20, a couple of other products have also come in. That’s creating the positive. Whether it is — the second question was whether you think it is sustainable or not. I think it is pretty much there in terms of sustainability, but again you have to also understand that fact is that we are continuously investing. Like I said in the initial commentary also, more than INR1,000 crores of capex is what we’ve announced over last two quarters. Again timelines on execution of these capex are probably about 10 months to 12 months. Right? When we look at it from that perspective, I think growth positions that we are taking in the business are fairly significant. And majority of these are largely — a majority of these are based on customer discussions, customer contracts that have come in. So that’s how we are looking at it rather than just the mix that you’re talking about.

Surya Patra — PhillipCapital — Analyst

Okay. And simultaneously, sir, if I link this same question to the ref gas, so this quarter generally, seasonally, it should be a much weaker quarter in the overall year. And sequentially also if we see the margin improvement, considering that there is no or low contribution from the ref gas which was benefited by the price rises, so considering that, the performance looks really good for the core Chemicals Business in terms of margin performance. So, next quarter we will be going into the peak season of the ref gas and the continued performance in the core chemicals could further support the margin performance going ahead. Is the understanding correct, sir?

Rahul Jain — President & Chief Financial Officer

I can only answer that in one word, Surya: correct.

Surya Patra — PhillipCapital — Analyst

Okay, thank you, sir. My second question, sir, ref gas, whether there is a Y-o-Y growth in terms of export for the quarter?

Rahul Jain — President & Chief Financial Officer

Again, Surya, we don’t look at it from a Y-o-Y perspective, it is the annual number that we have to look at and when we look at it from an annual volume perspective, I think there has been growth in the HFC space as well as in the chloromethanes space, given that we have recently commissioned the plant. The point to make also is that the chloromethanes plant got commissioned somewhere in the middle of Q3. So full benefit of the chloromethanes plant on the volumes will come through in Q4, as well as when you look at it from an annualized perspective, the year as a whole. So that’s how we would look at it, Surya.

Surya Patra — PhillipCapital — Analyst

Sure, sir. Just last one question, sir. Regards to fluoropolymer that you have announced and the earlier fluoropolymer foray that we had earlier indicated, so now two developments, obviously. But on a futuristic basis, your thought process about the fluoropolymer and how integratedly that you want to play it and what would be just kind of a thought process about customer acquisition, coverage, cost efficiency? From those [Phonetic] angle, if you can share some brief view about it, that would be really helpful.

Rahul Jain — President & Chief Financial Officer

Surya, two or three things to point out here. First the PTFE, which is the earlier fluoropolymer that you’ve talked about, is going to get commissioned very soon and I alluded to that during the earlier part of the comment. Probably end of Q4 or early Q1 next year, we will have PTFE up and running. We believe we are in a good situation to be able to ramp that up on a very, very fast basis. So that’s the positive. What we were looking at it strategically was the fluoropolymer space overall and, given our ability in terms of execution of the project, in terms of our technological capability going backward and integrating that to key raw materials, for PVDF, be it VCM and subsequently, various other positions that we’re taking on it, we think there is a large positive that we can create on that side. Customer acquisition, the specific question that you asked is probably still some way down the line. While we have already started work on that side, it’s — the first thing to be able to do is to be able to supply the product. And once you have that product in place, only then you can talk about customer acquisition. So that’s how we would look at it, Surya.

Surya Patra — PhillipCapital — Analyst

Sure, sir. Okay. Thank you, sir. Thanks a lot.

Rahul Jain — President & Chief Financial Officer

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Jessica from Nuvama. Please go ahead.

Rohan Gupta — Nuvama Wealth — Analyst

Yeah, hi, sir. Rohan here and from Nuvama. Sir, couple of questions, sir. First is on your new capex on specialty chemical. So roughly we have done some INR1,700 crore total chemical capex announcement in last nine months. Recently, when we visited our plant, I think that one thing which came very strongly that our capabilities to deliver the capex part and shortening the overall capex commissioning timeframe which earlier used to be close to 18 months-plus. Now, we’re confident in delivering in almost in a year’s time. So, do we expect that this — all this capex benefit will be visible over next 12 months, or which will be prominently benefiting in FY ’24?

Rahul Jain — President & Chief Financial Officer

So, again, Rohan, I think it is a journey, right? Those that were announced in Q1, right, have already — will probably get commissioned by the end of Q1 next year or Q2 next year. So again, eight months to 10 months project. And again, I think we will continue to engage with the stock exchanges to tell you where the positive is. Some of the future year growth, which is FY ’24, will always be driven by the new projects that will get capitalized during the year. So, I don’t believe the entire 750 will come in. But when you look at it from an overall perspective, a majority of that should hit, some part of, let’s say, H1, H2 in FY ’24 is what we would look at.

Again, I think the key projects that are getting commercialized or capitalized in FY ’24 which will yield benefit will be the pharma intermediate plant, the PTFE plant, CMS, which was commissioned only in November. So, there are about two or three SCB projects that will get commercialized in FY ’24. So, all of those will certainly hit Q4, will hit FY ’24. But I think we have to look at it from a more longer-term perspective rather than just quarter-on-quarter perspective, Rohan.

Rohan Gupta — Nuvama Wealth — Analyst

Sure, sir. That we understand. Sir, second is on our HFC volumes. You have mentioned that in a domestic market, you have seen a strong demand. Surprisingly, sir, this is a weak quarter, I mean, for the — as far as the ref gases uses are concerned. So how we are looking at this HFC volume, which has seen a good traction in domestic market is primarily driven by the import placement, or we are taking market share from the unorganized market in a domestic market? How this domestic demand is [Speech Overlap].

Rahul Jain — President & Chief Financial Officer

Actually, there is no unorganized market here. There is either us or imports on that side. On the domestic side, I think the way we are looking at is that the domestic — auto manufacturing segment has grown about 22% over the current quarter when we look at it. So that’s the market growth that is giving us that demand. And even the RAC [Phonetic] segment has grown about 40% over the current period — corresponding period last year. So that’s where the domestic demand is coming in. We also believe that there is very strong traction in the domestic position on the refrigerant gases for Q4 and Q1 as well. So, that’s something that we believe is going to be a much larger positive only.

Rohan Gupta — Nuvama Wealth — Analyst

So it is basically the entire market itself has grown significantly that is helping us to grow in the domestic market?

Rahul Jain — President & Chief Financial Officer

Correct, when you are talking only about Q3. From an overall perspective, I think we have a position from an overall perspective at a very large market share from — in the Indian market.

Rohan Gupta — Nuvama Wealth — Analyst

Fine. Thank you.

Operator

Thank you. The next question is from the line of Vivek Rajamani from Morgan Stanley. Please go ahead.

Vivek Rajamani — Morgan Stanley — Analyst

Hi, sir. Thank you so much for the presentation. Two questions from my side. Firstly, you did touch upon this before, but if you could just comment on the operating rates that you’ve seen across your different segments this quarter. And maybe just for Hungary, if you can just talk about how you’re running the plant since January, that would really be helpful?

Rahul Jain — President & Chief Financial Officer

Okay. So, I didn’t understand the first part of the question. Operating rate is what you said?

Vivek Rajamani — Morgan Stanley — Analyst

Operating rates for your different segments.

Rahul Jain — President & Chief Financial Officer

Operating rates. So, Vivek, I think when we look at it from a technical textile perspective, probably in the range of about 65%, 70%. From an overall NTCF positioning, melting is pretty much full in terms of the capacity that we have. On the packaging films side, about 80%, 82% is the operating position on that. This is also including Hungary in that sense. But when I look at purely Hungary, Hungary is probably operating at 40%, 50% in terms of the operating rate on the Hungary side.

On the fluorochemical space, all the plants are running very well. While there is some piece that would have been obviously inventoried for future sale, but the plants — even the new CMS plant is running very well. On the specialty chemicals, again, I think pretty much full on operating efficiencies in the plant. MPP by design will have some spare capacity available. But even the MPP4, we are very happy with the way it is starting to ramp up. So that’s what I would probably put through. So that’s the operating rate.

Vivek Rajamani — Morgan Stanley — Analyst

Got it, sir. Very, very helpful. And just a clarification, sir. On Hungary, would it be fair to say they are still at 40%, 45% in this current quarter?

Rahul Jain — President & Chief Financial Officer

Between 40% to 50%.

Vivek Rajamani — Morgan Stanley — Analyst

Got it, sir. Thank you so much. And sir, secondly, just on from a strategic standpoint on the capex, just if you could give some color in terms of your new investments. Will it now be focused more on some of these new applications like fluoropolymers going forward? Or will agrochemicals continue to be the bigger focus as has been the case for you guys?

Rahul Jain — President & Chief Financial Officer

See. Again, I think what you are looking at, Vivek, is from a timing perspective. I think when you look at the investments that we’re making in the specialty chemical side, the investment typically would cost between for a smaller plant INR75 crores to INR125 crores on an aggregate 300 to 350 MT plant. While when we look at it from a fluorochemical perspective, investments are larger, right? Again, I am not differentiating between whether we are only doing this or that. I think [Technical Issues] that we are seeing both in the fluorochemicals space as well as the spec chem space. We are happy to invest if we are getting our appropriate IRRs there.

Vivek Rajamani — Morgan Stanley — Analyst

Understood, sir. I’ll just get back in the queue. Thank you so much for your time.

Rahul Jain — President & Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Madhav Marda from Fidelity International. Please go ahead.

Madhav Marda — Fidelity International — Analyst

Hi, sir. Good afternoon. Thank you so much for your time once again. I just want to understand the kind of business that SRF is targeting in the global agrochemical market. Is it fair to say that we are targeting a lot of pipeline molecules of innovator customers? Is that also the kind of market that we’re going after, which could kind of help drive growth over the medium-term?

Rahul Jain — President & Chief Financial Officer

So again, we’ve always said this, Madhav, that are our key customer sets are global innovators. And when we look at it, their pipeline becomes an important element for us, as also, let’s say, expansion of their existing product becomes a very important element for us. So when you say that we are targeting that, yes, that’s probably the way to look at it as well.

Madhav Marda — Fidelity International — Analyst

I understood. And what about the pharma business? How is that scaling up in terms of sort of our pipeline getting closer to commercialization. I think you did mention one product was commercialized in the pharma space.

Rahul Jain — President & Chief Financial Officer

When we say commercialized, Madhav, what it really means is that our commercial lot has been supplied, right? It will ramp up over a period of time. Again, I would say it’s a journey. It’s not something that happens overnight. And again, we’ve always said this, don’t look at it on a quarter-on-quarter basis.

Madhav Marda — Fidelity International — Analyst

Understood, understood. Okay. Thank you.

Operator

Thank you. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead.

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Sir, thank you for taking my question and congratulation on a good set of numbers on the chemical side. Just to understand a little bit on the tax rate, so you did in the presentation alluded to the MAT credit and moving to the new regime. If I look at the consolidated tax rate for FY ’22 and ’21, I see 25.5%. So is it a correct understanding that the consolidated tax rate [Speech Overlap]

Rahul Jain — President & Chief Financial Officer

Arjun, I have always said this, whenever, you are looking at tax rate, when you start to look at it on a consolidated basis, it creates a very volatile picture. The best thing to do when you are looking at tax rate is look at standalone numbers. That’s how we should look at it. And when you — I would typically say that the utilization of the MAT credit, which was previously written-off, some portion of that, about INR52 crore has been accounted for in this year, this quarter. INR22 crores will get accounted for in the next quarter as well, because that’s how the accounting standards are structured. They don’t allow you to take it immediately whenever you are saying that there is a possibility of recognizing it. It has to flow through the effective tax rate. So that’s how it happens.

But from a guidance perspective, I think the way our numbers are structured today, the way projections are because you have to do longer-term projections when we are looking at tax rate, we believe we will shift into the new regime next year, which then means that we will be probably at an ETR on a standalone perspective at about 25%. Therefore, the global rate will actually be much lower than that.

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Sure. So, we definitely or probably be lower than that 25% going forward on a consolidated basis.

Rahul Jain — President & Chief Financial Officer

Arjun, I go back to the same point, look at standalone, I can give you guidance on that and that’s what I’ve done.

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Sure, sure. And just to refresh in terms of Hungary and Thailand, what would our tax rates be?

Rahul Jain — President & Chief Financial Officer

Hungary is a very low tax rate practically, non-existent, 2%, 2.5% is where it is on an ETR perspective. Thailand is probably in the range of about 25% — 20% on an overall basis, but there is a very large tax solidarity based on the investments that we’ve done. So that’s how Thailand will pan out. South Africa is now in normal tax rate, which is about 27%. But again, you would have some previous year losses that will come through. Those will be allowed to be used. There would be certain positions that you’ve taken, so all of those. That’s why I don’t give you a consolidated tax position. I, therefore, give you the standalone one, which is more, more easier to understand.

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Sure. Perfect. No, this helps a lot. My next question is in terms of U.S. HFC sales. So in the last quarter, we mentioned we’d probably be doing in the third quarter or the fourth quarter onwards HFC sales in the U.S. Any update in terms of outlook?

Rahul Jain — President & Chief Financial Officer

Yeah. Again, I think we’ve always — we said that the U.S. [Technical Issues] a majority of the sales. Sales to the U.S. market will pan out in Q4. We have good traction on that side, Arjun.

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Sure. And the new capex is on stream for the HFCs? Would that be within expected timelines?

Rahul Jain — President & Chief Financial Officer

Oh, I didn’t catch that. Could you repeat, please?

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

So, we are undergoing a capex expansion for HFCs also, would that be in the timeline as we envisaged?

Rahul Jain — President & Chief Financial Officer

Yes. As of now, we believe, September is when it should come up.

Arjun Khanna — Kotak Mahindra Asset Management Company — Analyst

Perfect. Thank you so much for your time. Thank you.

Operator

Thank you. The next question is from the line of Tanveer Singh [Phonetic] from Nuvama Wealth. Please go ahead.

Tanveer Singh — Nuvama Wealth — Analyst

Yeah. Thank you for taking my question. The question related to the textile and the packaging business. Though headwinds are there, just wanted to understand that we have a significant [Indecipherable] in asset there and oversupply in asset means it’s unlikely to increase the next two, three years. [Speech Overlap]

Rahul Jain — President & Chief Financial Officer

Things will do well.

Tanveer Singh — Nuvama Wealth — Analyst

Yeah. Sir, even in a oversupply position, whether it’s — because I understand that the volume would be difficult to ramp. So pricing, how we are going to play with the pricing [Indecipherable]?

Rahul Jain — President & Chief Financial Officer

Tanveer, I’m sorry, I fail to understand the question. Could you please repeat?

Tanveer Singh — Nuvama Wealth — Analyst

No, I wanted to know that now [Indecipherable] has really come down significantly. So whether it’s the pricing where we will be playing there by reducing the price, or we can — even having the same price, we can increase the volume going forward on the basis of our customer demand?

Rahul Jain — President & Chief Financial Officer

Conversion margin is a function of the price, right, because there is excess supply available in the market today, Tanveer, we are seeing a reduction in conversion margin that has happened. Again, to a certain extent, this business is commoditized. This business has a supply situation that is there in the market today, especially in BOPET. We believe that while there will be some negatives around it, we should be better off given our customer contracts, given our value-added product profile, given our R&D capability and given our position with some of our key customers. So while the industry will go through, let’s say, to a certain extent an extended lull, BOPP should still do better that BOPET. So, that’s how we’re looking at it. And your question with respect to, can we play with the price? It’s not really relevant. You are — there is a certain market price that you are dealing with. And therefore, if the market price has come down, our conversion margin also has come down.

Tanveer Singh — Nuvama Wealth — Analyst

Okay, sir. Can you just provide what is the spread on the BOPET segment?

Rahul Jain — President & Chief Financial Officer

Not really. The spreads are pretty localized from an India perspective or a Thailand perspective or a South Africa perspective. Each one will have a different kind of spread, whether it is exporting or domestic market, very, very different positions to play around from that. So very, very — even if I aggregate of the spread and give you a signal BOPET spread, that would really not be the right thing to do.

Tanveer Singh — Nuvama Wealth — Analyst

Okay. Okay. And secondly, in chemicals segment, the growth we see in Q3 or even in nine months, how much of this is [Indecipherable] to MPP4 ramp up?

Rahul Jain — President & Chief Financial Officer

Not very significant. MPP4 is something that we commissioned only in Q3. So while there are a couple of products that we have sold, the full ramp-up of MPP4 will come through in Q4, as well as FY ’24. So, I would not attribute very significant change in terms of, let’s say, the revenue growth of 23% that we’ve seen over corresponding period last year to just on MPP4. MPP4 is a good positive, but not only the positive that’s there.

Tanveer Singh — Nuvama Wealth — Analyst

Okay. Sir, agrochem and pharma intermediate, currently we have started this. So can you give any guidance for how much more products we are likely to add? Or in existing products, which we already we had started this, so the ramp-up — how the ramp-up is going to happen in that existing product?

Rahul Jain — President & Chief Financial Officer

The PIP plant is not being commissioned as of now. We have said in the commentary as well, Tanveer, where the PIP plant is in the process of getting commissioned. And what we are — what we believe is that we will ramp it up very, very fast. So that’s what we’ve said.

Tanveer Singh — Nuvama Wealth — Analyst

Okay. Okay. Understood. Understood. Yeah, that’s it from my side. Thank you.

Operator

Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead.

Abhijit Akella — Kotak Securities — Analyst

Thank you so much. Rahul, just a couple of clarifications I was hoping to seek. One is with regard to the new capex on the specialty fluoropolymers. While you’ve indicated the capacity roughly, is there a broad revenue and margin profile kind of outlook that you could share with us?

Rahul Jain — President & Chief Financial Officer

So, roughly speaking, I think we have roughly about 45% to 28% IRR positioning on this one, probably about a four-year payback that we believe we can generate. To be able to give you, let’s say, stable state sales or current positioning on it is very difficult. I think it should be similar to the chemical business, say, between 0.8 to 1.2, is what we believe will pan out on this one. But I think it is also important to understand, Abhijit, that this is a strategic investment that we are saying that we will do. And we believe that this will allow us to cater towards the large fluorocarbon sales in total, rather than just being on the fluoro, let’s say, fluorochemicals space. So that’s how we are looking at it. And therefore, we believe this is a strategic call that we’re taking to get into fluoropolymers.

Abhijit Akella — Kotak Securities — Analyst

Understood. That’s helpful, sir. And then just on the capex for this year and next year, we are still on track for our INR3,000 crore plus number for this year, I presume. Any broad number [Speech Overlap].

Rahul Jain — President & Chief Financial Officer

Yes.

Abhijit Akella — Kotak Securities — Analyst

Yeah. For next year as well should we assume a similar kind of number?

Rahul Jain — President & Chief Financial Officer

See, again, Abhijit, I will probably be able to give you better clarity on the number in the next call because there is work going on in terms of what is going to be the capexes. But given where our current capex announcements are, we believe anywhere between INR2,000 crores or, let’s say, about INR2,500 crores of capexes are already on the ground, right? Some of it will get incurred in FY ’24, and some will probably like the new fluoropolymer capex is a two-year capex, right? Some of that will get incurred in FY ’25 as well. So from a visibility perspective, we believe INR2,200 crores to INR2,500 crores is pretty much well doable. INR2,800 crores to INR3,000 crores is what we should be targeting going forward as well.

Abhijit Akella — Kotak Securities — Analyst

Got it. Got it. And one last quick thing. Last quarter you had told us that for fluorospecialty, you do expect to do better than the 20% revenue growth guidance you had provided at the beginning of the year. Any further updates you would like to make to that guidance?

Rohit Nagraj — Centrum Broking — Analyst

Abhijit, you’ve seen the nine month number, you are putting me on a spot. To be very frank about it, I think there is significant traction that we’ve generated in nine months in the fluoro — in the specialty chemical business space. The next question, I didn’t know that you are going to ask is, what is your target for next year. Again, I’ll give you better clarity on that next quarter, but yeah, that 20% number is far out of the window for FY ’23.

Abhijit Akella — Kotak Securities — Analyst

Okay. Thank you so much, Rahul. I’ll get back in queue. Thanks.

Rahul Jain — President & Chief Financial Officer

Thank you, Abhijit.

Operator

Thank you. The next question is from the line of Keyur from ICICI Prudential Life Insurance. Please go ahead.

Keyur Pandya — ICICI Prudential Life Insurance Company Limited — Analyst

Thanks for the opportunity. Sir, the question is on the two new products that we are starting. So first aluminum foil and second is PTFE. Since both the products are new, I mean, our portfolio, so basically just want to understand what would be the peak utilization or peak revenue or asset tonne? And from that peak, should be assume 20%, 30% kind of utilization in FY ’24, since there — I mean, since this is new products?

Rahul Jain — President & Chief Financial Officer

So both are different animals. Aluminum foil is the packaging film, let’s say, substrate within the business positioning that we have and therefore the kind of rates that we’ve seen in the past in the packaging films space and specifically on aluminum foil would probably be 1.75 to 2 times as asset turns. Also all of that does depend on the market pricing of some of these products. PTFE, we should also typically be following similar to Chemicals Business positioning in terms of the overall revenue. Given our — given the current rates of PTFE, I think the peak revenues that it could get to is 1.25, 1.3 of the overall cost of the project. On the — whether everything will hit FY ’24, again both of these are kind of coming up in September. So the rated capacity availability of these is only about four — five, six months. Aluminum foil should be faster. PTFE will come in April, and therefore six months in terms of the product approvals and that cycle should take and therefore typically be available for a six-month period in the FY ’24 as well from a full utilization perspective.

Keyur Pandya — ICICI Prudential Life Insurance Company Limited — Analyst

Understood, understood. Sir, thanks a lot and all the very best. Thank you.

Rahul Jain — President & Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Ranjit from IIFL Securities. Please go ahead.

Ranjit Cirumalla — IIFL Securities — Analyst

Yeah, hi, sir, thanks for giving me the opportunity. The question is on the Chemicals Business, so the nine months performance that we have seen. Would you like to call out some trends? Historically what we have seen, the exports has been a bit heavy on the fluorochemicals and the specialty chemicals. But of late, we are also seeing some traction in the domestic market for both these segments. So just wanted to get a sense from you, how these trends are shaping up and what is the likely trend to be in the future?

Rahul Jain — President & Chief Financial Officer

So, again, when you look at the specialty chemicals business, Ranjit, we’ve seen H2 to be always heavier than H1. Again, — but you, of all people, know the fact that fluorochemicals business, especially the ref gas space, there is a seasonality that does play out. From a trending perspective, we believe that we have good traction on the fluorochemicals business and the ref gas side. Market is looking very, very positive for us. The domestic demand is very, very significantly positive despite, despite a low — let’s say, seasonally weaker quarter Q3, Q4 should — performing as it has already, I think Q4 should give us very, very large traction in FY ’23. Again from an FY ’24 perspective, the seasonality play in the fluorochemicals will remain. Q1 should do well, but again that seasonality trend does play out. In the specialty chemicals space, as our new plants get capitalized and [Technical Issues] plants get commercialized, TIP does well, there is large traction that we’re seeing from an overall sales perspective in the specialty chemical play as well. Ranjit?

Ranjit Cirumalla — IIFL Securities — Analyst

Yeah, thank you, sir. But more on the export versus domestic, the traction is likely to be equal?

Rahul Jain — President & Chief Financial Officer

In the specialty chemical play or the fluorochemicals side?

Ranjit Cirumalla — IIFL Securities — Analyst

Spec chem.

Rahul Jain — President & Chief Financial Officer

See, again, specialty chemicals business in itself is focused on exports. Now it’s largely the new projects that are commissioned are also — are being commissioned are also export-focused. So to that extent, the focus remains on exports, the positioning that we are creating in the specialty chemicals space is also largely exports. So that’s how it should play out, Ranjit.

Ranjit Cirumalla — IIFL Securities — Analyst

Okay, sir, that’s helpful. Thank you. The second question, in the opening commentary, you did talk about a variety of technologies and platforms in the spec chem space. Just wanted a bit more granularity on that front. This might be a bit more technical, but would be helpful to us. Thank you.

Rahul Jain — President & Chief Financial Officer

Ranjit, if you want to get into the technological piece of it, I will have to get an expert to talk to you about it. I will — I’m not the expert here. So maybe we can come back to you in terms of what we’re talking about on that.

Ranjit Cirumalla — IIFL Securities — Analyst

Sure sir, that would be very helpful. Thank you.

Operator

Thank you. The next question is from the line of Shaleen from UBS. Please go ahead.

Shaleen Kumar — UBS India — Analyst

Hello?

Rahul Jain — President & Chief Financial Officer

Yeah, Shaleen.

Shaleen Kumar — UBS India — Analyst

Hi, sir. Yeah, congratulations, sir, on a good set of numbers.

Rahul Jain — President & Chief Financial Officer

Thank you.

Shaleen Kumar — UBS India — Analyst

So, more of a hypothetical question, if you can answer. Is our specialty chemical getting benefited with the cost of production going up in Europe? So — and that gives us — it is giving us a chance to move up the value chain. Is this a right understanding?

Rahul Jain — President & Chief Financial Officer

Yeah, to a very large extent, the way we should look at it, Shaleen, is that, while cost of production, purely that, that piece is transitory, it could come down in the future, given where energy prices are now coming down too in Europe. I think the thought process of the customers and the innovator is more important here in terms of saying that we want to outsource more. And I think that as a trend is playing out, where we are getting the benefit of that. Cost of production coming — going up today, is probably more transitory, Shaleen.

Shaleen Kumar — UBS India — Analyst

I agree with you, that could be a triggering point and I agree with you, but it’s maybe a triggering point but that’s giving us an opportunity to move up the value chain and hence that is reflecting in our margins.

Rahul Jain — President & Chief Financial Officer

Without a doubt, Shaleen.

Shaleen Kumar — UBS India — Analyst

Okay, okay. So I think I got dropped off in between, so not sure if you’ve answered already. Any sense on the…

Rahul Jain — President & Chief Financial Officer

Your voice is kind of cracking, could you just get the phone to your — close to you so that it is easier?

Operator

Shaleen, if you’re using earphones, please use the handset instead.

Shaleen Kumar — UBS India — Analyst

Okay, is it better? I just moved. Is it better?

Operator

Yes

Rahul Jain — President & Chief Financial Officer

Yes, please.

Shaleen Kumar — UBS India — Analyst

Yeah, so, sir, one more thing, I don’t know if you’ve already answered this question because I got dropped off in between. On the pricing of refrigerant gas, so like any color that how is it shaping up for you and because we are entering into a strong season or we are already into a strong season?

Rahul Jain — President & Chief Financial Officer

Yeah, again, unfortunately I can’t talk about just the pricing of ref gas for the future. There are contracts that we are doing, there are positions that we are creating on that side. It always happens that when there is excess demand and lower supply, prices do go up, but very difficult to be able to comment whether generically, the prices will keep going up in Q4 or Q1 FY ’24. So that’s very difficult to be able to comment on it, but yes, I think that the way we look at it, I think the pricing should remain strong both from a domestic and an export market.

Shaleen Kumar — UBS India — Analyst

As we stand today, pricing is quite strong.

Rahul Jain — President & Chief Financial Officer

This is forward-looking too much, Shaleen.

Shaleen Kumar — UBS India — Analyst

Okay, okay, okay. All right, sir. Okay sir, that’s it from my side. Thank you so much.

Operator

Thank you. The next question is from the line of Resham Jain from DSP Investment Managers. Please go ahead.

Resham Jain — DSP Investment Managers — Analyst

Yeah, hi. Good evening. So my question is on the agrochemical piece, the end market for us. Few of the global companies have mentioned about slightly higher level of inventory. Are you seeing any inventory glut kind of situation for your kind — your products like in the near term or no such issues for us?

Rahul Jain — President & Chief Financial Officer

Not really, Resham. I think what we’ve seen is good traction from customers. We have not had a position where some of the customers have ended up either deferring or changing their contracts or orders. So that’s remained for us. So I’ve not seen a position there, let’s say, that some of the orders have got deferred or delayed because of the customer having large inventories, not as of now, Resham.

Resham Jain — DSP Investment Managers — Analyst

Okay, so our overall inventory remains — inventory days remains in specialty chemical, specifically, similar to or normalized level, no…

Rahul Jain — President & Chief Financial Officer

That’s a different question. The first question that you have asked was whether we are seeing, let’s say, higher inventory levels at customers end and therefore higher– a position where it is getting deferred. That’s not happening. The second question that you are asking is my inventory levels. Now again, on the some of the products that we do are also in batch and therefore, to a certain extent, we have to kind of inventorize it when the next sale process comes in. So there could be some changes. But overall, we believe that when we look at it from a year-as-a-whole perspective, year ending perspective, I think we should be in fairly good shape in terms of our working capital management even in the specialty chemical business.

Resham Jain — DSP Investment Managers — Analyst

Okay, great, sir. Thank you. All the best.

Operator

Thank you. The next question is from the line of Tejas Sheth from Nippon India. Please go ahead.

Tejas Sheth — Nippon India Mutual Fund — Analyst

Hi, Rahul.

Rahul Jain — President & Chief Financial Officer

Yes, please.

Operator

Tejas, your voice is not clear. Tejas, are you able to hear me?

Rahul Jain — President & Chief Financial Officer

Tejas, we have not been able to hear your questions.

Operator

Tejas, are you able to hear me? As there is no response, we’ll move to the next question from the line of Nitin Tiwari from Yes Securities. Please go ahead.

Nitin Tiwari — Yes Securities — Analyst

Good evening, sir and thanks for the opportunity. So my question is related to the Chemicals Business. Is it possible to give us some bifurcation of Chemicals revenue in terms of fluorochemicals and specialty chemicals? That’s one. And secondly, bifurcation of growth in terms of growth from pricing and volume?

Rahul Jain — President & Chief Financial Officer

Nitin, unfortunately, we do that only from an annualized basis. So on a quarter-on-quarter or a nine month to nine month period, we don’t differentiate between — and we don’t give the numbers out for spec chem versus fluorochem. So that we don’t do. I will give you the numbers for the year as a whole, post-March end.

Nitin Tiwari — Yes Securities — Analyst

Sir, any broad indication is possible? I just want exact numbers.

Rahul Jain — President & Chief Financial Officer

No, we don’t do that, Nitin, sorry.

Nitin Tiwari — Yes Securities — Analyst

All right, sir. And secondly, you already answered on the guidance, so I won’t ask that question. And next on the contract terms and duration. Sir do you see any changes in terms of the contract terms and duration post the regular change in the cost of production and the volatility of raw material prices that we have been simply observing in the past few quarters? So with your clients, are you observing any change in the duration of contracts that you are entering into?

Rahul Jain — President & Chief Financial Officer

Are you talking about the specialty chemicals business, Nitin?

Nitin Tiwari — Yes Securities — Analyst

Yes, yes.

Rahul Jain — President & Chief Financial Officer

So again, contract positions are typically one to three years depending on the product that you are making. If it is a CDMO kind of a position or a CMO kind of a position, you would typically get a two to three-year contract. As you go out and ensure that the product is a more longer term commitment that the customer has made, you will then kind of get into annual contracts. So that’s how it works, Nitin.

Nitin Tiwari — Yes Securities — Analyst

Sure, sir, that’s it from me. Thanks.

Rahul Jain — President & Chief Financial Officer

In terms of what was happening earlier and what is happening now.

Nitin Tiwari — Yes Securities — Analyst

So that remains the same, there is no change as such in terms of these terms.

Rahul Jain — President & Chief Financial Officer

Not really. The positioning of that remains similar.

Nitin Tiwari — Yes Securities — Analyst

Sure, sir, thank you so much, sir. That’s all from my end.

Operator

Thank you very much. Due to time constraint, that was the last question for today. I now hand the conference over to management for closing remarks.

Rahul Jain — President & Chief Financial Officer

Yeah, thank you so much everyone for getting on the call. I hope we’ve been able to answer some of your questions. I wish that each one of you to continue to remain safe and healthy. If you have any further questions, we would be happy to be of assistance. We hope to have your valuable support on a continued basis as we move ahead. On behalf of the management, I once again thank you for taking the time to join us on this call. Bye bye.

Operator

[Operator Closing Remarks]