Fineotex Chemical Limited (FCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 and FY '25 Conference Call of Fineotex Chemicals Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Aarti Jhunjhunwala from Fineotex for opening remarks. Thank you, and over to you.

Thank you so much. Good afternoon, everyone. Let me start by extending a warm welcome to everyone who has joined us today on the call. It is always a pleasure to connect with our investors, analysts and stakeholders. We deeply appreciate your time and continued trust in Fineotex Chemicals Limited. Before delving into the operational performance, I would like to give a brief overview of the company. Let me begin by reiterating our core philosophy. Fineotex has always been more than just a specialty chemicals company with innovation, customer centricity and sustainability at the heart of everything we do while remaining cost effective. We are a single-stop solution provider across various lines of businesses, including textile chemicals, FMCG, cleaning and hygiene, oil and gas and water treatment. Our expertise in these areas, combined with our deep customer relationships allows us to deliver high-quality and tailor-made solutions that meet the evolving needs of the industries worldwide. With a strong manufacturing base and a global footprint, we are well positioned to capitalize on future high-growth opportunities. Coming on to our operational performance. Textile Chemicals segment remained stable with sustained demand across key geographies. We added 25 new customers during fourth quarter and a testament to our expanding reach and trusted performance. We also developed 15 new products, reinforcing our focus on innovation and our ability to respond swiftly to evolving customer requirements. While the FMCG cleaning and hygiene segment witnessed a temporary softness in volumes, the underlying demand fundamentals remain intact, and we anticipate a pickup in the coming quarters. Our new business lines, water treatment and oil and gas, delivered strong performance with a substantial increase in both volumes and value contributions backed by a robust and growing order pipeline. Further, we are undertaking focused capital expenditure and brand-building initiatives. These investments are aimed at enhanced production capabilities, strengthening our market presence and accelerating customer acquisition in these fast-growing business segments. These business lines are expected to play an increasingly significant role in our revenue mix in the coming years. In water treatment, the demand is driven by industrial expansion, environmental regulations and ZLD, which is zero liquid discharge mandates, increasing the need for biodegradable polymers, antiscalants, coagulants and metal chelating agents. The oil and gas sector is benefiting from increased upstream activity and refinery expansion driving demand for demulsifiers, corrosion innovators and stimulation chemicals with the growing shift towards eco-friendly and water-based formulation. This diversification strengthens our overall business and allows us to capture emerging opportunities in high-demand industries. A testament to our innovation and sustainability drive is the launch of our new product, Aquastrike Premium, a next-generation biotechnology-based mosquito control solution. This is nontoxic and eco-friendly, not only disrupts the mosquito life cycle more efficiently than conventional methods, but also contributes to water preservation. Aquastrike Premium presents a strong market opportunity, driving impactful innovations in the global chemical industry. Driven by the launch of innovative products through cutting edge R&D capabilities while remaining and maintaining a sharp focus on sustainability, we have developed 30 new products during the quarter, increasing our product offerings. I would now request Arindam Choudhuri to take us through our key developments.

Thank you, Aarti. Very good evening. It has been an eventful year for us, marked with several important milestones in our journey. The year witnessed growth in new business areas in the line with our diversification strategy. We expanded in water treatment chemicals, as explained by Aarti, obviously, with oil and gas to capitalize on the tremendous growth opportunity in these areas. We aim to leverage our expertise in these avenues and are already seeing an increase in pipeline orders across the domestic as well as export market. During this year, we developed Aquastrike Premium, which is our biotechnology-based mosquito control solution, formulated using a particular chemical called Azadirachtin. This product has already received government approval. This product gives us inroads into the public health domain, being an eco-friendly plant-based biocide, we expect Aquastrike to open new opportunities in both institutional and public health markets, particularly in the tropical and developing regions. Speaking about our Greenfield expansion initiative, we are happy to report that it is progressing well, and we aim to commence operation by quarter 2 financial year 2026. This new facility will add 15,000 metric tons per annum of capacity, taking our total installed capacity of 120,000 metric tons per annum, designed with state-of-the-art manufacturing technology and strong focus on environmental sustainability. The plant will enhance our ability to meet rising global demand while adhering to the highest ESG standards. Touching upon our industry scenario, the recently approved free trade agreement between India and the U.K. is expected to benefit Indian chemical exporters like us by improving market access, reducing tariffs and obviously enhancing supply chain efficiencies. This agreement positions Fineotex to strengthen its presence in the U.K. and broader European market, especially in textile and specialty chemicals. Moreover, it is heartening when our products garner recognition in the global industry. For instance, we received the ENEB accreditation for the third consecutive year. Our cleaning and hygiene range got the GreenPro certification. We also got the NSF 49 certification from U.S., which is a Certification and Inspection Limited U.K. and own EcoVadis commitment batch for proactive sustainability performance. This reflects our cognizance toward our environmental impact. Last but not the least, our company owned the Great Place to Work certification for the fourth consecutive year, which is itself a great achievement. So, with this, I would now like to hand over the call to Mr. Sanjay Tibrewala, who will take us through the financial performance of our company. Over to you, Sanjay.

Thank you, Arindam. Good afternoon, everyone. Talking about our financial performance for the full year '25. Our total income remains flattish at INR 558 crores year-on-year. The gross profit for the year is INR 205 crores with margins being stable at 38.57 percentage, the gross margin. The EBITDA for the full year stood at INR 127 crores, while the EBITDA margin softened by 222 basis points to 23.85%. This was led by CapEx and brand-building initiatives taken by the company for future growth and the new business verticals and the product lines that the company is developing, especially for the oil and gas, for the water treatment and also for the mosquito life cycle controller. The PAT has been reported as INR 109 crores vis-a-vis INR 121 crores in the previous corresponding year. The PAT margin stood at 20.48%. The cash balance and equivalent cash equivalents for the year is reported at INR 52 crores. This is after the cash deployment, CapEx deployment in the new facility and the new corporate office located in Andheri and the new plant, which is upcoming, for which already deployment has been taken. The share of exports in the total income comes at 22% during the quarter. Moving to our financial ratios. The ROCE for the year stood at 3.56%, while the ROE was 18.32%. Due to the fundraise activity during the financial year '25, our return ratios have been moderately temporarily reflecting the higher capital base. We generated positive operating cash flows of INR 69.33 crores with a healthy CFO to EBITDA ratio of 54.50 percentage, underscoring once again our strong operational efficiency and prudent working capital management. The company has a healthy order book, reflecting its underlying business performance and customer trust. However, certain deliveries were postponed during the quarter 4 financial year '25 due to certain geopolitical tensions in Bangladesh and other places and the trade-related disruptions. These deferred orders are expected to be fulfilled in the current financial year. With the current improving global trade environment and the new policies which have been coming up and easing of the geopolitical conditions, Fineotex is well positioned to capitalize on these backlogs, which are likely to act as a strong tailwind in the upcoming quarters. Our long-term growth strategy remains focused on developing our core business while diversifying into new product segments and verticals. As Arindam has already mentioned, the upcoming plant is set to be operational in quarter 2 financial year '26. It's going to further bolster our manufacturing capability. Innovation is in our DNA and new solutions like Aquastrike Premium demonstrates our commitment to new product development and global market expansion while keeping sustainability in mind. Our disciplined financial management positions us to capitalize on any opportunities, both organic and inorganic, including strategic investments in R&D, market expansion and potential acquisitions that align with our long-term vision. Furthermore, our continued focus on operational excellence and customer-centric solutions should allow us to unlock new revenue streams and expand our footprint across key and emerging markets. With a clear road map, a strong order pipeline and ongoing diversification into high potential sectors, we are confident in delivering value to stakeholders and achieving our ambitious annual growth targets. We have entered a new fiscal financial year on a very optimistic note. With that, I now open the floor for questions. Over to you, Ryan.

[Operator Instructions] The first question comes from the line of Suraj Khaitan from SKP Securities Limited.

Sir, I want to know 2 things. EBITDA margins for this quarter were low. What is the reason behind it? And what is the guidance for the upcoming financial year?

Okay. So, as you have mentioned, I would like to also touch on the gross margins, which has been pretty intact and in line with the delivering of the last 5 years as well. The EBITDA margins, as I also mentioned in the opening remarks, there has been a lot of sales promotional expenses being done by the company and which has already been going very positive. A lot of exhibitions, a lot of new product developments, a lot of promotional activities, which are all going, and that has also led to lower EBITDA margins for the quarter. However, as already mentioned, our EBITDA margins for the entire year is 24% as such. So going forward, we are quite confident with the new initiatives and the attention and the brand building exercise, which the company has done in the new product segment. We are looking for a strong concrete growth going forward. And we are quite confident that we will be having similar performances as we have done in the last 4, 5 years in the EBITDA percentages.

Sir, second question is one more question. Sir, the new product that we are launching, what is the target market size for this segment?

There are a lot many -- see, there is ongoing activities in the textile segment, and there is a lot of things going on routinely on those lines. The new product segment, which I'm referring mainly is the oil and gas and the water treatment. Now the oil and gas as we are also seeing a great geopolitical change happening around. So, the biggest market for this is the Middle East and the U.S. markets. And most of these companies operating from U.S. has diverted their supply chain to India or on the way of diverting it from to India right now with the same focus and the product lines we have and the executions we have been doing now. We have been participating in OTC in Houston, in Adipec, in Vertex in Dubai. In the last 3 months, our team has been visiting most of these countries, and I'm also personally taking care of this new exciting opportunities, which has come on our way. There's a lot of order booking, which has happened on this line, and we are very positive that this business will be also shaping up and showing and becoming one of our very important segments going forward.

We take the next question from the line of Kautuk Yemdey [indiscernible] Investment.

I have a couple of questions from my side. I wanted to know why there was a softening of the FMCG vertical of the business. Can you please elaborate on the same?

So, to the best of our knowledge -- Am I audible? Hello? As what we have understood perfectly…

Sir, just give me a moment. Kautuk, if you can please unmute your line.

That's better. So, I'll answer this question, which I heard. He asked about the drop in the hygiene and this thing. So as such, there has been quite a price rise in the detergent raw material prices in FMCG sectors. It was already from November, December, the chemical prices have gone up. And then what happens generally when these things do happen. There has always been a flexible in the demand and such situations where the performance boosters and the products and the sustainable solutions, which we offer for such FMCG players their consumption decreases because in turn, they also have softening in their demand. So as such, we have not lost any customer for sure. And this kind of demand is also because cheaper products were launched, there has been a change in the product mix. At the same time, there is a lot of new products being launched. There is a change in the market requirements from powders to liquids and any such changes takes time and the transition time for the things to settle around. So, I think I would rather say this quarter has been more of a transitional quarter where the things are shaping up. And already, we have got super exciting opportunities for the new product launch and the new product mix, which the customers have launched. And we are very confident that going forward, we should be seeing better numbers always.

And what are the investments that we're seeing in the books? So, the investments have actually tripled from last year. So, can you throw some light on that?

As you would also be knowing that we have already had a fund raiser and thereafter, we have invested in the new plant, which is being set up. And so, we have almost gone for a fund raiser of INR 342 crores, out of which the promoter has contributed INR 44 crores actually. And some of it has to be paid upon the 18 months of the warrants as such when the time comes in. So, this is a kind of investment, and there is a lot of capital in work progress also going around. So maybe by September, you will find more clarity on what all things have been installed because we are hoping that before September, we will be initiating our plant in Ambernath. This plant is also very close to our existing plant, Ambarnath one, which we started 3 years back, where we are already producing more than 61,000 tons. So, this will be another one, which is being done right now.

And the last question is regarding the future outlook. So, do you see things bottomed out in this quarter? Or do you further expect a quarter or 2 to be quite muted?

See, I can give you all the -- our view and our opinions, I can share with you. So, as you see in the last 5 years, the company has performed average 50% CAGR in the PAT and also performed almost the EBITDA numbers has also been 32% EBITDA in the last 5 years, CAGR level. So obviously, there is always a point where the company has now invested a lot. If you see also, there is a lot amount of depreciation, which has come into play now. At the same time, a lot of promotional activities, a lot of promotional sales, more team members, top senior people have joined us from different industries and product segments, which things are moving rapidly. I would say this is the inflection point probably. Also, I can say so because in textiles, we are hoping a great revival as far as the Indian markets are concerned, especially from the coming months from June onwards. That's one. Detergent markets are going to get normalized because the prices of the crude oil have softened, so the chemical prices will eventually get softened. So more special boosters will be added in the detergents. At the same time, our order books for water treatment and oil and gas, we are quite enthusiastic and excited with this kind of opportunities, which we have got right now. So, I think I would rather -- I'm quite confident that the going forward years will be something which we have done in the last 3, 4 years as well, looking at our opportunities we have and also the industrial direction.

The next question comes from the line of Ajay Kumar from [ Kason ] Capital.

Sir, my question is on the new product Aquastrike Premium. Is it WHO approval done, sir?

So, what we could do, we have taken the central insecticide Board approval, which is under the data from the ministry. At the same time, we have invested and we have got the approval from Haffkine Institute and a detailed report has come to us on that. Already, this has been offered to the National Vector Borne also and the Technical Administrative Committee, TAC, which we call it, is also considering that part as well. So, the reports have come extremely exciting, and we have got great results, and we are seeing a mortality rate of 100% in the use of 2 to 3 hours, which is quite phenomenal actually. So, in a short while, I can only express to you these updates that this is where it is today. And yes, that's the way it is.

Sir, any orders from Indian board, sir, like this summer season like from trial order from Bombay, Delhi, from southern states, like now is the peak of the product use.

So, what we have done now, we have just got the Haffkine’s reports, which is just 1 month old, and we have already submitted to several state governments. There is a quiet of interest coming up. But due to the political situation, which happened in the last 2 weeks back, the focus by most of the states and the central was not on this at the moment. However, it looks like now things have settled down and things are getting back to track, and there will be a faster approaches on this line.

At present, there is no order from this product.

As such, this product has already been sold in Singapore and Vietnam, as we have told you in the past also, it is going from the Malaysia. India has a procedure, it has systems. There are a lot of government machineries and authorities and approvals, et cetera. So, these things always we need to pass on the protocols. And as and when we pass it on, we'll be keeping on updating the investors by the stock exchange median also.

My second question is, sir, in this quarter, the PAT is down approximately to INR 20 crores from INR 27 crores from last quarter. Sir, I have just seen that goods purchased and inventory losses.

I'll tell you the answer. I think this is your third question, but I'll still answer it. So, the first thing is, as such, there has been intact, the gross margins have been totally intact, number one, almost intact, let's say. It's a minor drop of 1.5% or 1%, something like that, number one. As we have also mentioned, there has been a lot of investment done by the company for sales promotion, team adding, et cetera, et cetera, which I have already repeated twice today. At the same time, there has been an increase in the depreciation, as you can consider that part also. So, these things, if you can go through that, you will find that this is the situation where it is. Nevertheless, we are very hopeful that these investments are going to see the results in the coming times.

But I have seen that the inventory loss is also there, sir.

Yes. So that is also would be a point, but the major point, which I have already directed you and all the participants. And I think if you have some more queries, I think you can also meet our Investor Relations and our team as well or maybe Ryan can also join you again in the queue because, yes.

[Operator Instructions] The next question comes from the line of Bhavin Soni from B&K Securities.

Am I audible?

Yes, you are audible.

So just if you can help me for FY '25 revenue breakup between textile and FMCG and volume growth or degrowth, if any.

So, I mean, you require the revenue breakup, right? So, you can say now if you -- yes, so basically, the -- you can -- almost like 70% of the revenues is textile specialties for the entire year. 73% at the moment for this year. And in terms of volume, if you consider from the last year, there has been a drop of almost 10% in the volume. But as such, there are always changes in the product mix also because we have 1,500 SKUs. There are times when the product, let's assume like when the cotton prices move here and there, there has been shift and PVCs are launched, that is the polyester synthetic one, then the chemicals have to change again. Some prices of the products are not the same. So, we have more than 1,500 SKUs. But still to answer your number, this was the number which I shared with you.

And the 10% volume degrowth was overall basis or for textiles?

No. Actually, good, thanks for mentioning that point. As such, the textile has not gone down. The textile has, in fact, gone up by 15% in terms of volume and the revenue of the same has gone up by almost 10%. The gap has been coming up in the health and hygiene, the cleaning sector, and that has brought down the overall performance in terms of volume and the numbers.

We take the next question from the line of Devender Kumar from Devendra Capital.

Sir, my question is on the front of FMCG sector, sir. The one order of INR 150 crores you got, I think, 3 years back, no such query or any update like big players are, you said querying about your product. No order 3, 4 years.

I could understand your question. So, if you see, we have already got it, we have already executed it. It's still going on. This was not 1 year. I think you were talking about at least 2023 or '22 December.

'21.

Okay, '21, still better. So, it's already 4 years old now, and this is what we have performed. And as you know, any order from any company is always subject to the market conditions and things. And if there are some changes in the market's external scenarios, we all have to adhere to that and respect it. And always, there are certain orders which do get postponed, not only for that industry, even for textile industry. Right now, also, as you know, due to the tariffs and all, lot many orders from Chinese to U.S.A. I mean, Americans have been stopped, similar for some of the Indian textiles also. So, this is part of it. There is no company which can get into those things. And all what we can do is, we do the things what is best for the company and in the interest of the stakeholders. So that's been done perfectly as long as it's in our control.

[Operator Instructions] We take the next question from the line of Ganesh Nagarsekar from Bharat Bet Research.

My question is regarding the FMCG part of our business. So, in Q4, if you could quantify the volume decrease that we've had. And this part of the business has been struggling for a couple of quarters now, even as some of our other listed competitors are seeing an improvement in this segment. So, I mean, the management would have thought about this as well. So where do you think we are doing wrong in terms of execution? And going forward into the next year, where can we see incremental improvement in the FMCG part of the business?

I'll tell you what, we are producing sustainable solutions and performance booster products, which help their performance to go up. So that is one. What happens is when the overall industry is not faring well due to price reasons or due to competitiveness, as you know, Hindustan Levers, PNG all had its all-certain markets and the there was a lot of issues in the market in the pricing this and that. What happens, people change the product mix to lower category of product mixes so that it fits the pocket size of the customers and the consumers. So those times, people don't get into too much of specialty performance boosters or sustainability is on the second level. It's something like that. I don't know what analogy I can give you. When there is a shortage of -- so basically, I can say that we are producing the peanut and the cheese of the products. And when the markets are not good, people don't have the cheese and the peanut, they have more of the [indiscernible] and the dosas. So that is something which I would like to give you an analogy. Those products which we are doing are sustainable solution providing and performance boosters. But when the pricing of the consumers, there is a restriction on that in terms of the demands and the disposable incomes and things like that. That time, a lot of economical products moved by the consumers and FMCG companies. And hence, this is the way. This is not happening first time, by the way. This happens, it's always the way it is. It happens once in always 7, 8 quarters. If you see even in '22, January, we had '21 or something, we had similar quarter where everything had gone down in this field. So, this is what I would say. We are not supplying the basic chemical of it. We are supplying the high-end, high EBITDA margins, solution providing sustainable solutions for the consumers. So, this is the place where it's not the bread-and-butter kind of things, it's something more on it. So, we are hoping that and already things are getting better than before. So that's the way we are.

And in terms of the volume decrease for the FMCG segment in this quarter, what would that be?

So actually, what the FMCG segment, what we are mentioning is, there are 2 sub verticals we have. One is the products which we have our own FDA pharma certification where institutions are using our product lines. We are working with big brands already. So that has not been much affected actually. The major effect which we got is, let's say, then we are supplying our products to detergent and FMCG companies. So that has affected mainly. So, if you say from that angle, there has been a drop of almost, I can say, 18% from -- but these things do happen sometimes. So, this is something on that line also.

And in FY '26, other than the market improvement scenario, anything proactively that we are doing for the FMCG segment?

Well, there are a lot more. Geographically, we have expanded, a lot many customers have come in, more sustainable solutions have been made. Things are getting better, a lot of new inquiries and new products we have started for the new product mix also. So right now, there is a lot of new demands for the liquid detergents. Also, if you are watching the performance of PNG and all, mainly the liquids are picking up because powders and spas have become a little old fashioned, I can say. And so already, a lot of our customers are shifting to liquid. Like I said, transition takes time. Everything takes a quarter or 2 to change over, get the product inside, get the market has to understand it and accept it. So, we are in that stage.

And we were pitching to some of the MNC clients for the FMCG businesses as well, right? So, any progress on that front? Or is that still in the works?

Everything is under progress. I mean, I would not like to diverge too much of the exact updates here. But yes, so everything is going on as we are expecting it to be.

We take the next question from the line of Rohit Ohri from Progressive Shares.

A couple of questions. The first one, we know that there are certain clients, customers who are trying to revamp their portfolios. By when do you think that this exercise will be completed from their end?

It's an ongoing exercise, but that is not the only thing. I mean, apart from that, we are already getting more stronger in the existing product range and getting more consumers as well. But I think by the coming month or, let's say, another month or so, everything should be getting back to normalcy where it was. I'm referring about only the FMCG industry. Rest all is going fine. Like I mentioned now, textile is already booming for us. By the way, it's not exactly for everyone right now due to these changes. But yes, again, the future for textiles from June is looking one of the most optimistic sectors as far as we can understand it.

That's encouraging. But is it possible to share the value of orders, which must have gotten deferred from quarter 4 to quarter 1? Is it possible to quantify that?

It is tough to right now find that answer for you, but we can connect again from Mr. Rohit.

You and your team, they have been investing quite a lot in the exhibitions and you all have seen quite a lot in the chem exports, while you have also added 25 new customers. Is it possible to give a breakup of that which are the segments where these customers are added in?

Right now, we have our business heads and everyone are doing the best they can. We have got interesting orders and tie-ups with the biggest oil and gas companies of the world. These companies, each of them are about $20 billion businesses globally. And I cannot name those names, but I can just tell you some thought processes, which is going on the back end that some of these companies are, let's say, like example, one of them is buying, let's say, $150 million of chemicals from India, and they have been mandated by the headquarters U.S.A. to divert the Chinese procurement by $500 million, and it should be procured from India. And there is a big supply gap happening. We are drenched with inquiries. We are drenched with these -- so in the oil and gas, there is something amazing happening. It's something which we were not anticipating, and we are increasing our manpower, our exposures. Last week also, all of us were in the Middle East and the month before. I mean, we are participating in the Oman show and exciting orders and contracts have been achieved there. I would not be able to diverge numbers and other things on these calls. But yes, so we are very opportunistic and excited about these opportunities. I think this is just to give an idea to you what we are talking about and where the industry is going.

Because Aarti also mentioned quite a lot about oil and gas, and she mentioned about these upstream activities, which we can also read in the newspapers with ONGC Reliance India and Saudi Aramco doing quite a lot of things. Any idea as to what sort of numbers that we can.

Mr. Rohit, we have already signed certain NDAs with these giant companies, and we are already supporting them. And yes, rightly said, we also exhibited in Russia and FT gas. That was just 3 weeks back. And so, one team was in Middle East, one was in Russia. So, every month, we have international trips and a lot of transactions going on. And in fact, with Russia, I can say India is the only country which has the maximum potential to supplies to Russian requirements. The Russian market itself needs chemicals of INR 70,000 crores in the oil and gas sector. And it's equivalent to a lot many Middle East countries. And also, as you know, that due to the geopolitical situation, U.S. companies are not allowed to do business with Russia, even UAE and others. And India has the best chance to have great relations with the U.S. as well as Russia. So, I think in the oil and gas sector, Indian companies are poised to do much better than before. And also, if you see companies like [ Doctel ] and other names, they have been progressing rapidly on that. We also hear a lot of some acquisitions happening in the oil and gas sector. Indian companies are also looking at more opportunities. And also, the cost economies in India is much better. So, it's definitely, the European chemicals not only oil and gas, I would say, even the European textile chemical companies or the European oil and gas chemical companies are already facing a problem and competition from Indian companies like us. So, I think this is going to continue.

Sanjay, Ryan, one last question from my side. With these warrant conversions or without the warrant conversions, which can probably lead to some increase in the shares outstanding in the market, do you think you will be able to sustain maybe 22%, 23% kind of growth in the earnings per share from '26 to '28. Is it possible?

Well, like I said, so there has been a lot of organic expansion going on. Also, we are looking at inorganic opportunities’ day in, day out. I am quite hopeful that with the kind of opportunities we have now, I think we should be at least continuing the trend of the last 5 years, which we have done. Of course, there has to be certain quarters or overs or whatever in which we -- everything cannot be having the same pattern of this way because there are -- so that is all I can say today.

The next question comes from the line of Rushabh from RBSA Investment Manager.

Just carrying from the optimism, you had in the Oil and Gas segment. I believe this could be as big as the textile segment if all things go in our favor. So should we not be announcing significant capacity already since you're saying that you expect significant orders. So, when can we expect some significant CapEx in this segment from my side?

See, our capacities are fungible. And we are already vendors to ONGC from 2008, by the way, although we were not too active in that sector because in India, oil and gas business is not great. I mean, historically, if you talk about, not great, what I mean is comparatively, if you talk about ADNOC, if you talk about PD Oman or Aramco or KOCs. Now KOC is doing 200, 250,000 barrels a day, and they are expecting in the next 18 months or 2 years, they're going to do 4 large barrels, which is a jump of 50% almost, let's say, a little more. And they are worried that who's going to supply, how is the supply trend going to happen, et cetera, et cetera. So, what has happened is we are not exactly too much focused-on oil and gas in India because [indiscernible], as you know, it's more having its government-owned companies are here more or less, but still we have been there. So, these products, what we are doing like polymerization, esterification, sulfonation, phosphonation, these are for all the industries, it is a fungible capacity. So, in the same machinery setup, we can make these kinds of products. And so, we don't need a separate investment for oil and gas. However, having said that, there can be some requirements specific for product lines because some products are like in powder farms or this and that, where we will need INR 20 crores, INR 30 crores of investment. So, as we have also mentioned that we have a cash balance of INR 355 crores odd at the moment, apart which this is after the investment of almost INR 110 crores or INR 115 crores, which we have already done in the last financial year or a little more than that, let's say, in the last 15 months. So, I think we have enough of internal accruals and also generating good cash. So, I don't think we have to worry on the cost of the expansion on that line for production capacities in the future.

What is the capacity share for FY '25?

FY '25, it is around 59% or so. Around 60%, you can say round off. Actually, I think we have to get back in the queue because there are some more questions which are coming up, please. Thank you for that.

We take the next question from the line of Anirudh Daga from AV Securities.

Sanjay sir, any update regarding the acquisition plans [indiscernible].

So yes, Mr. Anirudh, like we have been mentioning any kind of such substantial material fact which comes up, it will be shared with all as per the protocol on the stock exchange. Right now, yes, we have been negotiating. There have been negotiations and a lot of changes have happened in the last 4, 5 months. So, we also have to be very careful with whatever action plan we do. And so yes, so things are on.

And sir, regarding the conversion of the balance money that is going to come in, say, by November or September or whatever. Are we confident of getting the balance 75% into the company? Because to be fair, the stock price and the conversion at INR 387 is so far.

So, then the point is that it is of November, there is 6 months to go, number one. Number 2, the company has enough of cash, which can be utilized for any inorganic opportunities or organic opportunities. Organically, like I said, we have already invested INR 115 crores by now. And right now, we have INR 355 crores of liquid cash and cash equivalents available for further expansion. So even if that doesn't happen, it doesn't affect the working of the company or any opportunity of the company to be missed out, number one. And number 2, as you might be knowing, if that 75% doesn't come in, the 25% is retained by the company tax-free and directly added to the reserves. So, in any case, the company is not having any issue or a worry point right now. The promoter, in fact, myself, invested almost INR 11 crores and INR 33 crores yet to be done in the conversion by November.

I'm assuming the promoter is definitely going to convert over, right?

I mean I don't know what to answer to you right now. But yes, I mean, let's see what happens. I mean, but ours was at 345, not at 385.

Ladies and gentlemen, with that, we conclude the question-and-answer session. I now hand the conference over to Mr. Sanjay Tibrewala for his closing comments.

Thank you, participants. It has been lovely to have this kind of attendance again, more than 100. And I would like to thank all of our employees, customers, investors and stakeholders for your continued support and trust in Fineotex. We are totally committed, and we are in the right directions. We are, in fact, more excited than before ever in the future, and we will continue to be committed to create long-term value for all of you. Thank you so much. Have a great evening ahead. Thank you very much.

Thank you. On behalf of Fineotex Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.