Archean Chemical Industries Limited (ACI) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Archean Chemical Industries Limited Q3 FY '25 Earnings Conference Call. [Operator Instructions] Also before we go ahead, we would like to inform you that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinion and expectation of the company as on the date of this call. These statements are not the guarantee of future performance and involve risks and uncertainty that are difficult to predict. I now hand the conference over to Mr. Ranjit Pendurthi, Managing Director of Archean Chemical Industries Limited. Thank you, and over to you, sir.

Thank you. Good morning, everyone. A very warm welcome to all of you joining our Q3 and 9-month FY '25 earnings call today. I truly appreciate all of you taking the time to be with here -- to be here with us today. I know it's a busy morning and busy time in the market. So let us go ahead. Before we get into the business updates, I would like to take a moment to introduce our new CFO, Mr. Natarajan, Ramamurthy, who has joined us last month. He is a qualified chartered accountant and a certified public accountant from U.S., bringing over 3 decades of experience from a diverse range of industries. His insight and expertise will be invaluable to us, as we continue on our growth journey. We welcome him on board. At the same time, we would like to also thank and appreciate our erstwhile CFO, Mr. R. Raghunathan, for his contributions to the company, and we would like to wish him the very best for his future. Today, I'm also joined by Mr. N.R. Kannan, our Executive Director; Mr. Rajeev Kumar, DGM Finance; and SGA, our Investor Relations adviser. We have uploaded our presentation -- investor presentation last night, and I assume everyone had a chance to go through the financial results and the presentation, and this is available on the stock exchange as well as on our company website. I will give you a quick snapshot on the recent developments of the company. Post that, Mr. Natarajan, our CFO, will walk you through the operational and financial performance of the company as well. We'll start with the market overview and business outlook. As you know, the current macroeconomic conditions and uncertainties have heightened across the globe and the chemical market and industry remains quite challenging. And however, despite this, your company, we remain confident about our long-term trajectory and our growth vision. The domestic consumption and demand in major global markets, including the U.S., China and Europe have faced some challenges, and some of them remain sluggish resulting in an oversupply of certain raw materials, feedstocks, and to gain market share, aggressive pricing from major suppliers. Consequently, as you are aware, average realizations for the chemical industry as a whole have been under pressure for some time. While post the Chinese New Year, for our own business, we expect a partial recovery in both demand and pricing, and we are seeing this uptick happen as we speak. Of course, the impact of ongoing tariff changes in global trade will have to be ascertained as we go forward and everyone has to have their own strategy to deal with the same as and when it happens and if an impact happens on any of us. On the domestic front, India remains a strong structural growth story within the emerging markets, offering new opportunities. We obviously have a dominant position within the bromine space in India, and we continue to build on that. We are committed fully to navigating these challenges while staying focused on expanding our market share and improving operational efficiencies. Coming to our company itself, we are happy to announce that your company has been awarded the Responsible Care certification in the past quarter by the Indian Chemical Council, which is valid for the next 3 years. This recognition is a testament to our continued deep commitment to sustainability, safety and ethical business practices. I want to personally thank our employees for making this possible. It's their dedication that keeps us moving forward and the faith the shareholders have in the company. For Q3 FY '25, our revenue stood at INR 255 crores. While we have seen some short-term moderation in demand, we believe these are temporary. Our order book continues to be healthy, and for the next 6 months to 12 months, both bromine and salt have locked in volumes. We have been actively working to strengthen our relationships with customers, optimize costs and enhance supply chain efficiencies. More importantly, we have also been successful in onboarding new clients, which is a strong indicator for future growth and also the confidence that buyers have in us for the long term. With the weather-related disruptions that caused some slack in the supply chain and logistics that flowed into last quarter and some part of -- towards the end of the last quarter. This is largely now behind us, and we have been consistently improving our logistics performance this quarter and will continue to do so in the coming quarters. This obviously will help us do better in terms of both volumes and realizations. Coming to the segmental performance, elemental bromine, the bromine business is showing signs of recovery as we anticipate a gradual pickup in demand ahead. And especially with China's recent stimulus measures, we are seeing some pickup on the ground in terms of construction activity and other projects in China. Prices have remained stable, and in some cases, we have seen slight improvements as well. We expect to produce nearly 20,000 to 25,000 tonnes of bromine in FY '26, including captive consumption. Moving on to Industrial Salt. As informed in our last call, we had faced some challenges last quarter due to monsoon and Cyclone Asna. And obviously, things are getting back on track. Our dispatch process has been smooth and likely to improve further, as I mentioned a few minutes ago, improving our volumes. We're optimistic about achieving 1 million to 1.2 million tonne run rate in the coming quarters and constantly working on improving the supply chain as well on this front. SOP, our SOP trials are progressing well. We see improved performance from this vertical in the very near future. These 3 core businesses form the backbone of our company ensuring a steady cash flow and giving us the financial flexibility to invest in future growth projects. Coming to Acume, our subsidiary for bromine derivative products, the ramp-up of our bromine derivatives plant is progressing steadily, and we anticipate meaningful revenue growth in FY '26. On the clear brine fluids, we have successfully dispatched through trial shipments, and we are working closely with clients to refine their specific requirements. However, as you all are aware, approval from oil and gas procurement departments is a bit slower because of the technical specifications and grades involved, but we are confident of getting these trials accepted and also the quantities improving in the coming quarters. We expect a healthy contribution from CBF segment in the coming quarters. In PTA synthesis, the demand remains steady, supported by growth in textiles and packaging industries. We see good opportunities here as polymer consumption increases. In all, we believe that the bromine derivatives business will pick up in the next few quarters, and we are confident of achieving the growth targets that we've set ourselves up for FY '26. Oren Hydrocarbons, this is the company that we had acquired through the NCLT route in July 2024. We are making good progress on bringing these units back into operation. After a number of years of being nonoperative, refurbishment works obviously takes time, and we plan to start -- restart 2 units this quarter with 2 more in the coming months. This business complements our CBF segment, which primarily caters to the oil and gas industry. The order inquiries look promising, and we're optimistic about its future potential as well. Coming to our strategic initiatives, which we have shared over the last few quarters, investment in the semiconductor manufacturing business. One of the recent developments for us has been the groundbreaking of our semiconductor facility at the Utkarsh Odisha conclave during end January 2025. This is an important step for our company and a proud moment for all of us. Through our subsidiary, SiCSem Private Limited, we will eventually invest up to INR 3,000 crores in a compound semiconductor facility, the first of its kind in the country, which integrates wafer fabrication for key industries such as electric vehicles, energy storage, industrial tools, data centers, fast chargers and consumer appliances, et cetera. The State Government of Odisha has allotted 14.5 acres of land in Bhubaneshwar for this project under the Odisha Semiconductor & Fabless Policy 2023 further reinforcing commitment to India's semiconductor ecosystem, which is encouraged and envisaged by ISM, India Semiconductor Mission. Earlier, we have made a strategic investment in Clas-Sic Wafer Fab Limited, a U.K.-based company specializing in silicon carbide wafer manufacturing. This is India's first investment in a company with silicon carbide MOSFET/devices production capability, primary subscription of GBP 10 million and secondary purchase of GBP 2.5 million is completed, and the balance GBP 2.5 million will be done at a later stage. Coming to our investment in Energy Storage Solutions, our company has committed a total investment of USD 12 million in Offgrid Energy Labs Inc., Delaware, U.S., a company specializing in zinc-bromide battery technology. This investment aligns with the company's broader strategy to enter the energy storage sector, particularly focusing on renewable energy and industrial storage applications. A bromine business synergizes directly with the zinc-bromide based batteries. We're confident that this will be a significant growth area for us in the future with the increasing focus on sustainable energy solutions in India and as well as storage solutions globally. We continue to remain a net debt-free company with a strong balance sheet. This financial resilience allows us to make strategic investments and sustain long-term growth. Our focus is on executing our business plans effectively and continue to create value for all stakeholders in both the present businesses and in the new growth businesses that we've identified and started investing in. Now I request our CFO, Mr. Natarajan, Ramamurthy, to give highlights on the financial performance.

Thank you, sir. Thank you, and a very good morning to all the participants on the call. I would like to give you a quick financial summary of Q3 FY '25 on a stand-alone basis. Total income increased to INR 2,547 million in Q3 FY '25 from INR 2,520 million in Q2 FY '25. Operational profits increased to INR 755 million in Q3 FY '25 from INR 698 million in Q2 FY '25. Within the operating revenue, export market contributed around 76%, and remaining 24% came from domestic markets. Our business mix are as follows in Q3 FY '25. Bromine contributed 38% of the operating revenue, whereas industrial salt contributes around 61% of the total revenue. EBITDA for the company stood at INR 963 million in Q3 FY '25 with a margin of 38%, an improvement over the last quarter. ForEx gain in Q3 was INR 4.27 crores. Coming to 9-month FY '25 performance highlights, total income stood at INR 7,301 million in FY '25. Previous year total income was at INR 10,791 million. Operational profit stood at INR 2,104 million in FY '25, previous year it was INR 3,491 million. Export market contributed around 75%, and the remaining 25% came from domestic market. Our business mix are as follows in 9 months FY '25. Bromine contributed 40% of the total revenue, whereas industrial salt contributes around 60% of the total revenue. EBITDA for the company stood at INR 2,710 million in 9 months of FY '25 with a margin of 37.1%. We have started sourcing power from renewable resources, thereby reducing our carbon footprint and achieving the financial savings. ForEx gain for the 9 months of FY '25 was INR 7.32 crores. We continue to remain net debt-free and have a strong balance sheet. Thank you. Now I request SGA to open the floor for Q&A.

[Operator Instructions] The first question is from Aditya Khetan from SMIFS Institutional Equities.

Just a couple of questions. Sir, first on to the Bromine business, as you have mentioned in your commentary that you are witnessing an uptick, I believe, sir, so almost around 6 monthly volume when prices are already contracted. So this uptick would be largely visible from Q1. Is that a fair assumption to take?

Yes. I think it is a fair assumption to make. And I think you will continue seeing that go through the remaining quarters as well because obviously, as we keep finishing the contracts, we keep getting into the new ones, so yes.

Okay. Okay. Sir, on to the salt business, sir, we are seeing some moderation into the prices of salt. And there also, sir, I believe, almost around 1 year of the volumes and prices are contracted. So this moderation in prices, you see the new contracts, which we'll be making that would be at lower prices, I mean, because 60% of our business comes from salt. Do you see any sort of a decline in the Salt business from here on?

I think the Salt business continues to be very healthy. And given the fact that we've been in this business for a long time, most of our customers, again, are large customers. However, at the same time, we have tweaked the strategy a bit. There is an opportunity to make a little bit more on the pricing if we are doing some business on a more spot basis. When I say spot, it doesn't mean we fix today and ship tomorrow. It means 1 month out, right? So I think between that blend, the pricing would be -- I think, is still on a very firm footing. If we compare it to the last year's contract pricing, yes, it will be a bit below that. But at the same time, I think given the fact that some of these are C&F contracts, we may gain some on the freight given that oil prices are also a bit moderated now. So overall, I think on a contribution basis, we will still endeavor to maintain that margin.

Okay. Got it. Sir, my next question is on to the recent investment like we have planned for 2028. Sir, this INR 3,000 crores investment would be done solely by Archean or it would be done by your subsidiary SiCSem?

The investment will happen on SiCSem Private Limited books. Archean Chemicals will play a role either in helping with the financing as a parent or in terms of providing some ancillary services like industrial gases, et cetera, which are a very important component of the semiconductor plant.

Okay. And sir, this big investment, I believe, sir, we have not done any such big investment until now. Sir, how you see like things will shape up, like what would be the asset turnover? I believe this is a business which is more capital intensive. So what sort of a number you can -- if you can guide anything like from '28 to around 2030? This 2 years, how this business will shape up in terms of the financial performance? And for this, how much debt we will take, I think? For this, our balance sheet also would be leveraged to some extent considering even the operating cash flows and cash, which we have, you see like balance sheet also like -- so leveraging a bit on that part. And how the numbers will shape up?

I'll answer the first part and the last part of your question, and I'll address the middle part of your question. The first part is, I think in terms of any investment, right, small or large, ultimately, you need to keep 2, 3 things in mind. One is, does it create value for our stakeholders in the longer term. If we invest today, what is the risk and what is the reward and is it a right industry to be in from a growth perspective and is it future looking in terms of both, does it serve our unmet need within the domestic market and is there a potential for an export market? So we understand the markets well, right, both domestic and export. Now, in terms of risk and reward, obviously, we've done that analysis, and we believe that it is the right project to invest in. And the third part is, I think, does it create long-term value? For sure, it does in our view. Now the last part of the question in terms of leverage, I think we're very sensitive to leverage. As you know, since listing also, we continue to be a debt-free company. And we would like to see how best we can use the balance sheet without having to expose the parent unnecessarily. But at the same time, we will have to go to the banking system, and then, we have to see what kind of financing we are able to structure around this. At the same time, I think in terms of your middle part of your question in terms of what is the outlook in terms of cash flow, et cetera, between '28 and 2030, I think that's a bit of putting the horse before the cart. I think at the right time, when we do the financial closure, I think it will become clearer, and we are more than happy to update the stakeholders at that point. My colleague, Rajeev, would like to add something here.

Also, on the financing side, a good part of this CapEx will be provided as a subsidy by the state government, which is approved by the Odisha State Government under Odisha Semiconductor & Fabless Policy-2023. Our project is also pending with -- under review with Indian Semiconductor Mission. So the whole financing mix, we'll be able to answer once we have a clarity from the central government as well.

Sir, 1 last follow-up on to this, sir, what would be the like peak revenue from this business? And our overall margins are somewhere around 30%, 35% range. So since this is a capital-intensive business, margins would drift down on a consol basis. Any sort of numbers, sir, you can share, like what would be the peak revenues?

I mean, at the moment, we are, I think, not ready yet to share. But at the same time, I want to quickly also mention that not all capital-intensive businesses need to be low on margins. I think it's a sector-specific -- I mean, if I go back in history when we invested INR 1,200 crores, INR 1,300 crores in our Archean Chemicals project, it was considered high CapEx relative to anybody else having done a similar investment in a similar field, but we've been able to deliver healthy margins consistently for many years. And going forward, we plan to do that as well. So I think, like I said, things will become clearer once we move towards financial closure, and we'll be happy to update those -- I think, the business projections at that point.

The next question is from Sanjesh Jain from ICICI Securities.

Let me first start with the bookkeeping question, sir. Can you help us with the segmental revenue and volume sales?

Yes, this is Natarajan. In Q3, industrial salt sales was 758,000 metric tonnes, and the bromine was 4,600 metric tonnes.

Okay. And what was the revenue?

Revenue, industrial salt was INR 1,491 million and bromine was INR 929 million.

Okay. And there were no sales from the SOP side in this quarter.

Yes, there is -- there was a sale, some INR 4.3 million, SOP.

Okay. Very small. And volume would be?

Volume, already given, no, 82 metric tonnes.

82 metric tonnes. That's very clear. Now coming back to the bromine. Ranjit, sir, you mentioned that you're looking at 20,000 to 25,000 metric tonnes, including captive. How much do you expect captive will be required next year? Because we are looking at a gradual ramp-up both in clear brine fluid and PTA. And this year itself, I think in the elemental, we will be reaching about 19,000, 20,000 metric tonnes. So we're not looking at a significant jump in the elemental as well.

So thank you, Sanjesh, for the question. I'll probably have Mr. Kannan, our Executive Director, answer that question on how much captive we plan to use for next year, which is primarily in our downstream unit.

Sanjesh, this is Kannan. So currently, in this quarter, our share for captive will be around 5% to 7%, which will obviously grow next year, next full year, and this can exceed about 20%, 25%. That's the kind of numbers we are looking at.

In that case, what we are looking in elemental is not a material growth for the elemental. So what's stopping us driving that elemental to a potential of 28,000, 30,000 metric tonnes, which we were earlier aiming at?

I think we continue to give a conservative estimate because we would like to ensure that we're able to deliver. I think, 2 quarters in to the next year, we possibly will have a chance to review that number and see if we need to maintain it or upgrade it. But the improvements that we made in the last quarter and continue to make this quarter, I think we would like to start seeing those results before we promise more. But the fact is that we know what we would like to consume in the downstream unit and we know what we can produce at a minimum on the parent level. So in that combination, if you assume 25,000, so as Mr. Kannan said, 20% to 25% gets consumed. And if you back work, you do end up at about 20-odd thousand, which is what we are doing at the moment. So we would like to be a little bit cautious than be aggressive and promise things.

But how is the demand outlook? I got that cautiousness, but when you talk to the customer, do you see next year's volume coming up in a normalized way? Are you still seeing increased competition from ICL because they keep telling that they are pushing a lot more volume for them?

Yes. So I think I'll probably answer part of this question and then give it to Mr. Kannan. So I think it's good that ICL is pushing more volume, which means the market is healthy, right, and is ready to absorb. So it only comes down to how much more we can make. As you know, we've never struggled with having to sell the bromine. So we continue to sell whatever it is that we make. And our backlog also indicates that the offtake continues to remain healthy. And with the little price uptick that's happening, I think that will also flow down to our bottom line as well. On the demand side, we are not seeing any let up of any sorts. And I think as we continue to build that customer base as well, adding a few more customers, spreading the material down a little bit. This will also ensure in years to come we have a more diversified customer base. But maybe a little bit more insight into market, Mr. Kannan, can give because even the domestic market is an important one here in bromine.

Yes. Thank you. So basically, the growth of ICL if you look at from the different supplier share, it's also likely that a decline from one supplier would have contributed to ICL's growth. That's also a possibility. But overall, the other dimension, which includes -- which impacts our demand, our supply is basically some sectoral variations. For example, the agrochem industry in the last quarter has not been very, very strong. But it has been maintaining its share, not in a very aggressive way, but in a muted way. That we are looking at as a revival. It's likely to happen maybe later in this quarter. And definitely, when we move into Q1 of next financial year, we see a revival. And accordingly, that -- where we are already present, that's a sector space, we are already present, and we'll grow in that. So overall, as Mr. Ranjit said, we are not really worried about demand. There is a good demand, and we will rise up to the requirements and meet those demands, that we are confident of.

Got it. Got it. Next on the pricing of the bromine. I think rupee depreciation itself should add good 5%, 6% to the realization. When we say that we are looking at uptick in the realization, are we talking in dollar term or rupee term?

So we are talking in rupee terms. Basically, there are 2 factors. One, as you rightly said, there is a realization of increase -- the depreciation of dollar has improved realization, but we also have some past contracts which are continuing. So you will -- it's a combination of factors, which has resulted in the rupee level gain for bromine. Some past contracts at older price having a benefit of dollar depreciation and certain rupee transactions in the Indian market, which have also been increased. So it has been a combination of both factors, which you see a final impact on the realization for bromine.

Got it. Got it. My next question is on the SOP and Oren side. SOP, Ranjit, sir, you said that you are looking to restart the plant at a gradual ramp-up in volume possible. So next year, can we again touch the historical number of 20,000 metric tonne what we used to do earlier? Is it possible to achieve that number consistently and grow? Because we are sitting on a very large capacity gear? And on the Oren, I think you mentioned that you're planning to start 2 plants this quarter and another 2 plants in next few months. Any outlook for FY '26? The historical peak for Oren was almost INR 400 crore. The commissioning of these 4 plants should be touching as a 50% revenue target, say, in FY '25 -- sorry, in FY '26?

So I think on SOP, we are in the process of initiating the pilot runs and trials at site, basically moving it from lab where it's been tested, and the results are what we wanted. So that should happen. We are aiming to do it pre-monsoon because that's the best time to test it. So if that does happen, then the ramp-up will start post monsoon in the dry season. And we think we should be able to get some meaningful contribution from SOP. At the moment, I'm not very sure of committing a 20,000 tonne number. But yes, I think ideally that would be a reasonable number to expect, right? On Oren itself, the 2 plants basically are products that go into, again, oil and gas drilling, they are almost ready. And I think the trials, et cetera, with customers have started, and we'll probably have clarity over that, I think, towards the end of March or beginning April. But we are conscious that we would like to start bringing in revenues from that unit. Our investment, of course, remains low, considering the other CapExes that we have. But at the same time, since July, effectively when we got possession, et cetera, it was almost, I think, August, September. So in 4 or 5 months, we managed to get 2 plants up and ready. So I think we would start seeing meaningful revenues from there as well. I think over the next quarter, we'll probably be able to be in a better position to commit more on what the exact numbers would look like.

Very clear. One last question. On the bromine derivative side when we say that we are looking at a captive consumption of around INR 4,000-odd crores of bromine. This implies that CBF and the PTA volume should be upwards of 10,000 metric tonnes.

Yes. Yes, for sure.

Yes. That's the right understanding, correct?

Yes. For sure, yes.

Any update on the flame retardant or it still remains in the pause?

No. We have restarted, I think, the dialogue on transfer of technology on flame retardant given that -- I think we've always believed in that business being a natural extension of our derivative business, and I think we have -- like I said, we restarted the work on that on paper. And over the next few months, we'll hopefully start working on the ground in that direction. And given that, of course, on the electronics side, there's a lot of movement on FR products. It continues to be an attractive area for us as a bromine manufacturer.

Got it. And it will be with the long-term contract or just a technology transfer?

Well, I think we would like to have more flexibility with pricing and not have to necessarily tie ourselves up into a buyback type of arrangement. So I think we'd like to see a product that's technically qualified from an end-user perspective. And if we are to do any sort of long-term contracts, we'd like to probably do them with end users and not intermediate players.

The next question is from Rohit Nagraj from B&K Securities.

The first question is again on the semiconductor initiatives. Do we have any project timelines for the same given that we have already done the groundbreaking ceremony? What could be the milestones that we would achieve over the next 2 to 3 years, any basic timelines if you can share?

Yes. So I think we're obviously very excited about the groundbreaking. And I think it is definitely an important step in our journey towards getting this project up and running. However, I think between groundbreaking and actually starting construction, there's obviously a whole host of things that need to be in place. One of the important ones is land, which, again, we already have and allotted. So I think that's an important step as well. And then we move into the local permissions, et cetera, for construction and then start calling and reviewing tenders, bids, et cetera. So we are evaluating working with a large firm for managing this as a PMO, and I think that will assist us in putting things together very quickly and having to maintain a lean team internally, but at the same time, bringing better execution capability than what we may have internally. And I think these are the factors that we have to take into place over the next few months. So I think, again, this is something possibly we'll have a clearer and a better update for you in the next quarter. But between now and then, I think we're putting the pieces together in the background.

But would it be safe to assume -- I mean, we had earlier indicated that it'll take about 24 to 36 months, is that the time line that we can expect from, say, early January 2025?

No. I think once we put shovel to ground, I think it's 24 to 30 months, not from January '25.

Fair enough. But again, slightly delving into it, given that it's a combination of projects with the Government of Odisha, does that mark the leads to faster approvals, at least from the regulatory perspective that land has been given and the allied approvals? So -- I mean, is it safe to assume that those EC, et cetera, which takes usually anywhere between 6 months to 1 year, should we probably -- we'll be able to get it faster than the normal process?

I think we have great support from the Odisha Government, which is why we've been able to get it up, so -- get it up and running in terms of approvals, et cetera, that we got so far. And also, the Government of India has also a very strategic and important role to play in the semiconductor space. So I think it's the combination of both their supports that we will need to get this project ready and commissioned. Yes, I think the fact that the Odisha Government is 100% behind this project and has committed to helping us in any which way they can, it should help us in being able to navigate the approvals, et cetera, at a quicker pace.

Just last clarification. So in terms of the products that will be manufactured in here, it will be the acquisition that we have done on the Clas-Sic Wafer Fab, so the products and technology that we will be receiving from this investment. Are those all the products which will be manufactured in SiCSem or there will be any additional things which could also come in?

So the investment in Clas-Sic is for the technology and the process know-how to make certain products. So that will be obviously used by SiCSem under the licensing royalty and controlling agreement. And in order -- for the products that we make at SiCSem, we will be solely responsible for what we wish to make and want to make. So that's within our domain. We are not bound by an agreement as such with anyone. So I think that call we will take given the very large end use for the products. So it's a very vast area. So we'll start working with industry on that front.

And the technology that we'll be using here, we'll be paying royalty for the same, but we don't have restrictions in terms of using those technology products only in India so that we can have the global market as well. So is that the right assumption?

So the technology is for a fab to be set up in India, but the end product can be sold anywhere.

That was very helpful. Sir, a couple of questions on the legacy business. One is in terms of the salt volumes, so Q2, the volumes were impacted because of the cyclone. Why it has continued even in Q3? And if you can give just 9 months volumes and revenue figures for all the 3 products.

Yes. Okay. This is Natarajan. I will give you the number up to 9 months. Sales quantity of industrial salts is 2.2 million and the bromine is 14,000.

That was 2.2 million for the first 9 months.

Right. And the revenue as well?

INR 4,140 million.

And for bromine?

Bromine is INR 2,769 million.

Okay. And salt volumes, I mean, why there is impact again in Q3?

So I think this I had mentioned during my introduction -- introductory comments. So I think we had some logistical challenges on the mobilization and transport. But I think that's -- it's actually what we've ironed out over the last month or so, towards the end of the quarter. I think that done, you will see that the volumes pick up this quarter and in the coming quarters.

Right. Just one last question. On the lease front, any new update that we have received from the government?

It's, I think, a work in progress. I don't have any fresh update as such. But I think we continue to await the approvals, and we've just been, I think, told that it's under progress.

And is there any similar incidents with parallel maybe companies or so where the approval has elongated for such a long time?

To my knowledge, again, my update is a few weeks old. I believe people are waiting or companies are waiting.

[Operator Instructions] The next question is from Rushabh Shah from RBSA Investment Managers.

Just on the FY '26 direction on the revenue growth front, given that you're anticipating a pickup in the base business as well as the derivative business coming on stream. So can we expect a double-digit kind of growth in revenues in FY '26? Is that a reasonable assumption?

Sorry, you are a little muffled. I couldn't hear the question. Can you repeat?

Yes. Okay. So I just want to understand directionally from your end in terms of revenue growth for FY '26, given that you are expecting pickup in base business as well as derivatives coming on stream. So is the double-digit revenue growth kind of a reasonable assumption for FY '26?

It is.

Okay. And secondly, sir, you mentioned that we may be eligible for the central government subsidy in the -- under ISM, so what's the probability that we might get that subsidy? Or when can we know the decision of the government?

I think, as a company, I can only be very hopeful for the sake of all the stakeholders. But I think -- do we have a very good application put in? Yes, we do. And I think it checks all the boxes. So now we have to leave it for them to evaluate. And I think given the track record they have shown in the last couple of years, I think they've been very sensible and very pragmatic in how they have approved projects. And I think they're a very capable set of people, and I think we'll get the right evaluation done, and we can only hope for the best.

And just last clarification from my end. We had pledged certain shares of the company at the promoter group level. Just want to understand what is the use of the money. And are we going to further pledge this rolling in Archean Chemicals?

I think the pledge that happened is not necessarily connected to Archean Chemicals or the business on Archean Chemicals. It's at a promoter level. So I think on and off, there is some amount of funding required, which is what the pledge serves as. But we don't anticipate any big movements in pledge. So I think we are -- at the moment, we are about 3%. So I anticipate we should not be crossing more than 5% now or in the near future.

Next question is from Srishti Jain from Monarch AIF.

Sir, with respect to the INR 3,000 crore investment in the semiconductor facility, will the investment ex-subsidy, whatever it may be, be shared between us and the partner considering it's a 70% holding subsidiary?

Yes. We hold 70% in the subsidiary and there is a co-founder with us, a gentleman with the background and know-how of the semiconductor business. So what was the question again, madam?

Will this investment be shared between us? So -- is he just the technology provider? Or do we...

No, I think he is an operating partner cum shareholder. So he is the Managing Director of that company. So the investment will be from our side.

Understood. And sir, there are -- the state wants to attract a lot of companies. So we're expecting a lot of companies to set up shop in the semiconductor space. So what we think is the right of being here? And are we expecting more tie-ups, like towards the classic wafer tie-up?

I mean I can give you a generic answer because I don't know the strategy of each state, but obviously, each state runs their own invest in so and so state programs, which I think is great for the country as a whole. The more investments come in, more jobs, the economy moves. There's a multiplier effect. We create higher-paying jobs. We develop skillsets in areas that we don't have today. Institutes get to play a role in it, premier, local, et cetera. So I think -- as an ecosystem, I think it's a great thing. I think one can't be afraid of competition because even if you are novel today in the business you do, tomorrow, somebody may set it up and compete with you. So I think each one has their own strategy in how to address the market and similar to what we have, right? So there is a certain capability that we have. There's a certain faith we have in the business. There's a certain belief we have in the future of the business. And then, like I said earlier, when we measure the risk/reward metrics, we take a call that is a good place to put money into, and then, we move forward. So I think -- to answer your question, I think it's good if more investments come in because you have a larger talent of people, resources available to carry on the business.

Sure, sir. But are we also looking at more tie-ups in terms of technological or any other way?

At the moment, I don't think we need any more tie-ups. I think we got the most important one, which is the process know-how for the compound semiconductor. And I think with our equity investment also in the company that's giving us that, I think it gives us a very sound firm footing. And I think, as I said in the commentary, this makes us unique in our position in India. We're probably -- irrespective of the size we are, I think we're the only ones who've ventured and made an investment in a compound semiconductor fab overseas. Albeit small, but the size is not the important thing. The process and know-how and the capability of the company we've invested, and that's the most important thing in the semiconductor business.

Understood, sir. And sir, one last question on Offgrid Energy Labs. So the 2-year roadmap that we have is for the current plan to set up in U.K., right?

Yes.

And post which, you will think about a [indiscernible] factory, if at all required in India.

Yes, definitely. I think that business also, obviously, growth potential is pretty large. The market is large, especially for stationary storage systems and energy storage. I think that's a growing market. The fact that it ties in with our bromine business through zinc bromide technology, I think helps us on both fronts, one, for our own business of bromine as well as secondly in getting into a high-growth space with a very sound battery technology that remains under control and can be produced without having to depend too much or maybe if anything or nothing at all on imported parts or components.

Sure, sir. And do we expect in the near term any additional capital commitment here?

I think in the near term, in the next 6 months to a year, I don't think we have any big capital commitments, maybe towards these 2 projects, not necessarily Offgrid, but semiconductor, maybe things related to groundwork, civil, et cetera, some advances on equipment and all those things. But beyond that, we don't have any large CapEes planned at the moment.

[Operator Instructions] Next question is from Chetan Doshi from Tulsi Capital.

My first question is that in June '24, that was the lowest quarterly sales, which you had done, none from maybe last 2.5, 3 years. Can we expect that, that will be the lowest, and from here, we will see improvement and try to achieve the figures, which we are doing earlier such as '21-'22 or '22-'23? And which project -- second question is which project, the battery one or the semiconductor one, which will go on sale first?

I heard the second question, clearly, but the first one was a bit muffled. So I will answer the second.

Okay. Shall I repeat?

Sure. You can repeat, yes.

See, in June '24, we -- that was the lowest sale which we achieved for June quarter '24 in last 2 years. Now can we expect that, that is the bottom, which we -- which was there and from here onwards the benchmark will be that definitely there will be improvement in the sales in coming quarters after the addition of these 2 new units, which we have bought?

So I think the June '24 quarter, I mean, apologies, I don't have a figure right away in front of me because it's 6 months old. But anyhow, I think going by your question, yes, I think we don't anticipate to be hitting anywhere near that number in the coming quarters. Like I said, I think our volumes are picked up over the last couple of months, and we'll continue to do so on both bromine and salt. And I think we will continue to endeavor to improve those volumes. So the second part of your question, I think, which will come first? I think you're talking about 24 to 30 months. However, the second one, the Offgrid Energy is first going to be commissioned in the pilot plant stage which itself is maybe 18 months, 24. So in all probability, we would anticipate that the semiconductor project would come up first from a commercial revenue generation perspective.

Due to time constraint, we will take that as the last question. I would now like to hand the conference over to Mr. Ranjit Pendurthi for closing comments.

Thank you. Thank you, everyone, for joining us on this earnings call today. We appreciate your time and showing interest in our company. We understand things are challenging. The market on the chemical industry side is challenging. However, I think we are holding our ground. And I think your company continues to be resilient to market forces, and we continue to see improvements on the ground, and we are firmly behind our commitment to keep it going. And our investments that we are making also will create, we believe, a longer-term value, and that's the vision we have, and we would like to look beyond a quarter or 2. I think the company is being set up in a way that it will deliver value in the immediate term as well as in the longer term, and our investments will pay off. So, however, in case of any queries, please feel free to get in touch with us or SGA, our Investor Relations advisers. And thank you once again, and we look forward to meeting all of you over the next call. Have a good day.

On behalf of Archean Chemical Industries Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.