IOL Chemicals and Pharmaceuticals Limited ($524164)

Ladies and gentlemen, good day, and welcome to the IOL Chemicals and Pharmaceuticals Limited Q4 FY '26 Earnings Conference Call, hosted by MUFG Interim Investor Relations. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Ms. Prachi Ambre from MUFG Investor Relations for opening remarks.

Thank you, Ron. Good afternoon, everyone, and welcome to IOL Chemicals and Pharmaceuticals Limited Q4 and FY '26 Earnings Conference Call. Today on the call, we have Mr. Pardeep Kumar Khanna, Chief Financial Officer; Mr. Abhay Raj Singh, Senior Vice President and Company Secretary; Mr. Kushal Kumar Rana, Director Works; and Mr. Rakesh Mahajan, Finance Advisor and strategic head to provide insights on the company's operational and financial performance. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon our beliefs and expectations as of today. The statements are not a guarantee of our future performance and involve unfortain risks and uncertainties. With this, I would like to hand over the call to Abhay sir for his opening remarks. Over to you, sir.

Thank you so much, Prachi. Good afternoon, everyone, and welcome to the Q4 and FY '26 Earnings Conference Call of IOL Chemicals and Pharmaceutical [indiscernible]. Thank you so much for joining us today and for your continued trust and their support. We really appreciate your time and your interest in the company. I hope you have had an opportunity to review our financial results and investor presentation, which has been uploaded on stock exchanges and the company's website. FY '26 has been a good year for the company, marked by consistent operational execution, improving efficiencies and healthy progress across both pharmaceutical and chemical business. Despite continued geopolitical uncertainties and volatility across global markets, the company may take a strong business momentum and resonate growth. FY '26 was particularly encouraging for us as the company reported its higher ever quarterly revenue, supported by cost optimization, improving product mix and enhanced capacity utilization across key product lines. More importantly, the quarter also reflected meaningful improvement in profitability in line with the operational direction and efficiency focus, we have been consistently working towards within pharmaceuticals, non ibuprofen API continued to witness healthy traction with key products such as paracetamol, Metformin, Capitol, Pantopan other improved demand across markets. The company further intend its nonaduopin segment through the launch of Noxidil and the expansion of pantaprazole capacity to cater to growing demand. This reflects the steady progress of our diversification strategy and operational strength. Our Chemicals business also delivered a strong performance during the quarter with improvement in both realization and profitability, supported by stable demand stable demand conditions and operational efficiencies. Also, the capacity enhancement in product such as highly and acetic anhydride, along with the recent commissioning of Design will further strengthen integration and supply chain efficiencies. During the year, the company continued to invest towards capacity expansion, process automation, infrastructure enhancement and operational improvements while maintaining a disciplined approach towards capital allocation and balance sheet management. Overall, the year reflects consistent addition of our long-term strategy, improved improving business fundamentals and continued focus on building a stronger and more diversified platform for sustainable growth. With that, I now it Mr. Mr. Pardeep Khanna, CFO, to take you through our financial performance for the Q4 and FY 2026.

Thank you, Mr. Abhay. Good afternoon, everyone. I will now share the financial performance for the quarter and full year. Following this, we will open the floor for questions and answers. During quarter 4 of an year 26, the company posted a strong top line performance with the revenue from operations top INR 19 crores as compared to INR 528 crores in the postponement quarter last year, reflecting a year-on-year growth of around 17.4%. For the full year of angler 26, revenue from operations stood at representing a growth of 11.5 percentage year-on-year. On the operating front, EBITDA for the quarter stood at INR 90 post year as against INR 68 in the quarter 4 of financial year '25, registering a growth of nearly 40%, while EBITDA margin improved by to 15.2 percentage for the full year of 26% EBITDA increased by around 29% to INR 29 this margin improving to 12.4% from 10.7 percentage in the previous year. Coming to the bottom line, profit after tax for quarter 4 stood at around INR 53 compared to INR 32 crores in the corresponding quarter of the last year, remain a growth of 68% with PAT margin improving by 62 basis points to 8.6%. For the full year, fancily6, PAT increased by around 36 percentage to from INR 38 crores. The stronger bottom line performance was supported by improved operating profitability and efficient working capital management, leading to and the cash generation. During financial year '26, the company impact CapEx of around INR 160 towards capacity expansion, operational improvement and infra enhancement and were funded entirely through internal approvals reflecting the shipment capital allocation. Going ahead, the company remains focused on sustaining growth to mention through increasing contribution from the on- portfolio, higher utilization of recent commission rests and continued improvement in operating efficiency. We remain confident of delivering mid-teens to high-teen revenue growth over the medium term, along with gradual improvement in EBITDA margin from the front trajectory, supported by an operating leverage and efficiency enhancements. Good will now open flow for questions and answers. Thank you.

[Operator Instructions] We take the first question from the line of Jainam Ghelani from Swan Investments.

Congratulations on a good set of numbers. Sir, we have acquired 100 acres of land near or not in the high -- so sir, any time line when do we wish to do the new CapEx? And what could be the quantum of that CapEx, like since it's such a line, I'm sure we have a mega project in mind. So any estimate on that, sir?

Thank you so much, Jainam, for asking this question. As I think we also discuss these questions in the last few conferences also the new land is being under the regulatory approvals as of now, a few regulatory approvals we have already secured and few are awaited environmental clearances is also done. And I think we are expecting this project to come up in the next 6 to 8 quarters or maybe 4 to 6 quarters. The investments, I see the model at that land is going to be more or less similar of the existing IOL plan, the mix of chemical and I think we always keep on saying that the doing, we will be doing mainly through internal accruals. And on an annual basis, we will be doing around INR 200 crores to INR 250 crore crores on annual basis. because all development will be done in a gradual in the phased manner. The whole investment will be completed in the next 4 to 5 years.

Okay. So almost we can say like almost INR 1,000 crores with the we have a broad mines, we have total outlet.

Yes, yes. Broad mindset is around 1,200 to 1,400 per.

Okay. Okay. And sir, in this quarter, our gross margins have improved substantially so do we expect the margins be the like in this particular range? Or was it a one-off because the prices increased and total inventory gain for us in this quarter. And going ahead, we should return to our normalized gross margin of 36.

So no, no, this is not that way we can read the numbers. The numbers is the result of everything. This is mainly because of the operational efficiencies from our side. and good tractions in the road I also performed well. And if you see the capacity utilizations for all these products and including the [indiscernible] for last around quarters and before even that also was we were doing very well, and we will keep on saying all these things. See the change what has been in this quarter is the uptick in the prices because we were having all the quantity volume we were having. So the little bit prices just coming to that number resulting into that number. But inventory, I don't think that we were having any meaningful inventory gain in that quarter because the uptick was, I think, in the very later part of the quarter. So we are hopeful that this will remain at least next some around 1 or 2 quarters as well. But see, if the prices are going for this in its products, the prices of raw materials are also going up. So I think this is not the way that we are not passing through the raw material prices. We are also passing through the raw material prices for the customers as well. But I think the more result is the company's efficiency and the product takes and the capacity utilization.

Okay. So sir, in our previous con call, you had mentioned that for FY '27, we should see 10% to 15% revenue growth and 15% to 20% improvement in PAT level. But I think do we maintain it or I think we upgrade that because if you're saying margins can be 14%, 15%. So can you comment on that?

So I think we are still maintaining that. The improvement I think quantity, actually, when we've given that improvement this year we set the 27 by 27%, so we are very sure about that we will be achieving it. But I think we will be remaining to that level, perhaps maybe a little bit improved. But semi side on a conservative side, we are if we say 27% by 27% from this. So I think it's around mid- to high-teen growth numbers.

Okay. So almost 15% to 20% revenue growth and EBITDA margin 14% to 15% revenue

18%.

We expect 15% growth in top line, it may be more or more or less. And for Beta margin, we expect 14%.

Thank you we take the next question from the line of Maulik Varia from 361 Capital.

I hope I'm audible. Congratulations on a good set of numbers. I just wanted to understand, so we've seen growth across chemicals and pharma segment. So in terms of products, which you mentioned, Paracetamol clopidogrel in to Brazil informing how much was the volume growth in these products, which drove the growth? And along with that, how was the volume growth for our other products as well, which is ibuprofen and the chemical side?

You had just mentioned just to do a name. All our existing production, including au Metformin clopidogrel and this they are running almost 85% to 95% capacity utilized. This is a quarter and the year or it is also around capacity utilization. And for recently added enhanced of Paracetamol, we have achieved around 55% to passage utilization on an enhanced level. So as regard to our chemical in which we are producing a stick and hired it's high 2. They are all also running at almost 100% capacity utilization, 98% to 100% capacity utilization, even after increasing their capacity also. So the major portion of the increase in revenue is from an increase in capacity utilization and the sale of these products in addition to a little bit hike in finished got prices, but that prices are also complemented by increase in raw material for excels also.

Okay. Okay, sir. Sir, just a follow-up on that. Sir, we were seeing a little bit of weak demand in the previous year and then last 2, 3 quarters, you had guided that the demand is expected to revise and that's what has happened. And we've seen that in the numbers as well. So can you, sir, directionally or qualitatively help us understand that what had led to the weaker demand? And what is driving this demand? And is this demand will be sustainable in the coming 4 to 6 quarters?

There is as we have mentioned earlier that the demand is not in every product, but in special in due around 3, 4 quarters ago, the demand was lower due to restocking of productive do refi '23, '24, year '23 and '24. But for and the entrance of a new peer also in the market. But we were expecting that demand will be stabilized after destocking at these levels. And we were expecting these demand especially do from October 25 onward, and that has happened. And we anti-state at this level will maintain upcoming 4 to 6 quarters. And then as regard to IOL, our paracetamol capacity will expect it to rise to around 75% in current financial year. around 55% to 75%.

Okay. We are expecting capacity utilization increase from 65% to 75%.

Not [indiscernible]. And for the other 2 poles, it will be at the optimal [indiscernible] 65% to 95%.

Okay. Sir, just 1 last question from my end. You, I think, mentioned that the price increase happened in the later end of the quarter, and we do not see a lot of benefit from the price increase. So is that benefit expected in Q2 or sorry, Q1? And are we expecting that the price mean? I'm pretty sure the prices of raw materials also would have increased proportionately. So will there be any benefit in Q1? Or will that be passed in Q1 itself to the customer?

Yes. Yes, as we discuss with our potential customers and also for increasing prices of finished goods along with corresponding to the increase in the prices of raw materials and a certain portion of increase in cost has been passed to the customers also. So we are expecting because we are mostly playing to our direct consumers now to the traders. So the scope of getting the abnormal gain from the price is limited.

Okay. Okay. Okay. So these gross margins are broadly sustainable? Is what you alluding to? Am I understanding it right.

So basically, you need to know the quarter-to-quarter basis. However, we have more interest on discussing the full year basis. So if we -- because quarter-to-quarter business predictions is very complicated and it's very risky to say about that, also considering this so much of dynamism globally is happening. So I think the quarterly leaving apart from the quarter-to-quarter basis, if we see the annually, we are very hopeful that we will be improving the EBITDA number as well as the sales number as compared to the FY 6. And that level will be growth-wise is top line. We say that it's something around mid-teens and mid- to high teens and then the EBITDA is something around like Parts said in the previous question around 14 to 14.5 percentage. So this will be definitely be translating into the annual terms.

Understood, sir. Okay.

Every quarter cannot be the same.

We take the next question from the line of Sachin Kasera from Salveen.

Congratulations on a good set of numbers. My first question was regarding ibuprofen. So 1 of our other listed peers, they have mentioned that the prices are not revert we're not making margins there. and hence, they want to close down, is that an issue specific to maybe get player whereby there cost of production or commercials are not interact? Or are you also experiencing such type of scenario where the margins in profit are under severe pressure.

No, not at all. I don't know what they are feeling or their concerns are. But regarding the IOM, this is 1 of the best products for the IM, and that is witnessed by the capacity utilizations we are doing right now. And for us, few quarters. So we are managing around 90%, 95% capacity. And for the next 2, 3 quarters, we are not foreseen any problem or any conditions where we should be worried about this. And we are maintaining our leadership globally.

Sure. Second question was, we understand that the spreads in acetic business of yours, iterated, as modern $110, $120 to digitorus but down stand $150, $160, which is in line with historically. So is that understanding correct? And what is your view and comment on the spreads there?

Can you repeat your question.

And see, we understand that in your chemical business, the spread has improved by around $40, $50 per ton. Is that understanding correct? And what is your view and comment on the sustainability of these import spreads in case the coding the chemical part of the business.

In it, we have increased our capacity from 110,000 to 120,000 tonnes of. And that is also running at around INR 98 crores and refund capacity utilization. Some of the figures you have mentioned is contributed by the past utilization on an enhanced level. And a little bit also continue to rate margin expansion from actuator driving season illicit prices.

I'm not understanding correct that currently, the margins are doing much better than they were in the March quarter for the month of April is the understanding that.

It is absolutely correct.

Sure. My next question is, sir, regarding the spend on R&D and our performance in terms of new product launches that we plan to launch in the pharma business and also we have been looking at increasing our revenues from the Delom markets because there the margins are better. So can you tell us how is the progress happening there? And are the exciting new products that we are looking to launch in the next 1, 2 years? And plus, how is the progress on increasing the share from the developed markets in the pharma part of the business.

So for Pharma part business, we are covering the approximately more than 80 countries worldwide. And this includes the complete Europe, Brazil, late countries. So -- these are the countries we are already covering and relating to the non ibuprofen portfolio, which we are maintaining our exports is underway because we have the CEP for all the products. And we are in touch with these so many customers relating to the increased exports. So I think we will be increasing the excess port the export numbers will be increased in this financial year as well. So I mean, definitely, the export will be more for the onaboproducts. For IB, we are already having around more than 40% or more than 50% export as of now. So that will also be increasing. And yes, this is the export.

Question was help market of Europe such an..

I do apologize to interact you, but your audio is not clear.

My question, sir, was more specific to the revenue contribution from developed markets like U.S. and Europe. I understand that the exports you mentioned are closing from other markets what is investment [indiscernible].

No. So realization, Europe as compared to because there was a lot of voice disturbances. So I'm just repeating the question you are asking that the realization with the domestic sales versus the Europe or the Europe.

No, no, my question is regarding.

Sachin? Since there is no response, we'll move on to the next question, which is from the line of Vignesh Iyer from Sequent Investments.

Sir, so my first question is on the increase in realization that we are seeing across different products, primarily ibubropane and paracetamol. I wanted to understand if we are seeing a higher realization coming from our export business? Or are we seeing the price increase also domestically? And if you could quantify, I mean, what how much percentage increase at prices that we have seen compared to from February to say now at this point of time. If you could.

So I think prices in fact, will be in the coming time because as we said and discussed the pricing, the last quarters were not very in the latter part of the March if we say. And this is not only the prices of the finished products is increasing the raw material prices are also increasing. So I think we should not bang upon that, the increase in the prices. This is the company's efforts for last few quarters and rather few years where we are working. So improved operational efficiency, better asset utilization, obviously, the market uptake has also contributed to the good set of the numbers. Relating to the product-wise prices contribution. So I think that will not be possible for us to discuss the product prices and their exact contribution. So we will not be able to quantify that.

So I didn't want the exact number. I wanted to just understand the spread has improved for us despite the increase in COGS, are we getting a faster higher realization versus a higher increase in raw material.

Vignesh, I think, is more or less same or might be a little bit increased because whatever until prices has been increased, the prices are also being adjusted into the lines product. So not much we can say.

Okay. Sir, 1 last question from me. I wanted to understand the gains of procurement of raw material, is there any issue on that side. I mean, on the supply chain side that we are not able to procure the raw material for some reason. So if you could because there are product companies who are facing such issue.

In the first week of March, we have had some crude base chemical and gas which are provided a marketing company, the government refineries. But within 1 week, we have 1 metrics where they started on to all the manufacturer on certain to services. So at 1 week, there was more relating tiara materials.

We take the next question from the line of Surabhi from NV Alfa Fund Management.

So my first question is a simple to make on how much contribution has come in terms of revenue from ibuprofen and non-IB segment? And within the non ibuprofen segment, you mentioned that we have CPs for all products. So have we started exporting to the European nations. And so what is the contribution to the European nations from the non-products.

So thank you, sorry for asking questions. I would like to take the first part of the question, contribution from the Ibn the non within the farmers. So this is around 62% this quarter contributed to bond the remaining around 38% from. And the non-Ioproducts exports relating to the CP, we started and actually started 2 years and yearly basis, this is increasing. And we will be having better export numbers for non-IB products in this current financial year. So we are expecting that we should achieve around 25% in FY'27.

25% of exports to regulated markets from non-hydro is that right?

Correct. Yes.

So correct currently, we are not doing as much regulated markets.

In Non [indiscernible], we are doing, but as compared to the overall, not very much.

So are the larger depressed to that extent because so are the margins, you addressed to that extent because once you start exporting to the developing nations like the European nations, the margins has the scope of increasing further? Is it possible.

Yes, it is possible in healthy because the export realization is better than the domestic sales. But that depends product to product. Some products have some better rate adjustments and some have a little it is not significant. Like, for example, if we take an example of Florida can be significant. But in case of others, it will be very significant.

Okay. And just 1 last question on my side. previous can also asked a major competitor from ibuprofen is looking to sell its assets. And they were largely in longer-term contracts in so is it possible that some of those regulated markets, long-term cost you have so those contracts.

So we think last part of the question could not understand but what I understand is that you are saying the long-term contract for the customers, which is being catered by some other of ours relating to the that can take the but it is possible it is possible all the marketing teams are marketing continuously work on things. I'm sure they will be taking care of all these things.

We take the follow-up question from the line of Sachin Kasera from Swan Investments.

So my question was, sir, regarding how are we looking to increase the revenue from regulated markets of U.S. and Europe how has been the progress in the last year? And how do we look to improve that in the coming next 1 to 2 years?

I think we're also discussing the same with [indiscernible] previous question. See, for ibuprofen, we are already doing around 45% of the exports. And that mainly include the Europe. Relating to the Americas on Arrott, but not directly. We are not doing that. much. We are in direct because you are already in the factor relating to the profile, and there is much difference whether we are selling into the euro or into the the U.S. because it is around 20 years back, the generic products in U.S. was getting more prices, but that is not the case right now. And related to the non-IO as of now, we are having around 50% export share and 18% comes from domestic share. So we are focusing to increase share into the devoting countries mainly Europe because we have a very good customer base into Europe and the Europe as well as indirectly also goes to the we also have been filed for all the products in the so that is also in our.

Ladies and gentlemen, we have the line management reconnect the management. Thank you ladies and gentlemen, we have the management line reconnected. We'll take the next question from the line of Sachin Kasera of Small Investments.

My question was regarding R&D. How much we are trying to spend this year? And what are the new good products we are looking to launch in the current financial year? And maybe if you can throw some way also in the next financial year?

Sachin ji R&D, we are having around 2% to 3% expenses annually. And there are not many products we are working on and the R&D is basically relating to the process related, it's not the product development, R&D, we are, I think we are having the R&D in process-based R&D. R&D has basically 2 sort of the functions in the company, number one. just to validate the process for these upcoming product we think of. And the second is the ongoing products we are having. So R&D keeps on continuing working continuously for various products. But I think the product pipeline, we are having a very great pipeline, but normally, we announced the product when we decided to go ahead.

Sure. But any exciting products you are trying to launch this year, which you think can be meaningful contributor going ahead?

I think we can expect.

Sure. Next question is regarding the CapEx. What is the capital expenditure for the current financial year at the existing side as well as the greenfield side and this INR 120 crores to INR 30 crores of CapEx at Greenfield. Can you share some more details with us how much standard we're looking to do it and what type of are looking to put there.

Sachin for greenfield, there has not been much CapEx as of now. It has not been initiated [indiscernible] developing the plant boundary creations, et cetera, because the plant is under various approvals seeking scale, we procure certain approvals like environmental appeals approvals is already in place. And apart from that, there are many more approvals is in the process, and we are hopeful that next to 4 months, we will be able to secure mostly all the process and we will start working there on. So the CapEx is not initiated as of now. And as before I mean, during this call also, we discussed that we will be doing around the 200 and 250 on annual basis at this new site as well because we will be having this more or less same model we are having right now. And all the projects will be coming up in next 4 to 5 years.

Sure. This INR 200 crores CapEx in the current year, so focused on efficiency? Or it is also some existing products are we looking to increase capacity? Or is this for some new products? Can you give us some understanding this INR 200 crores of capital expenditure planned for financial year '27?

This is a mix of both for growth and in the ravelopments and efficiency improvements. So generally, we are doing 60% growth and for development of infra and automations and land covenants. So generally, 60% on growth activity.

But large part of this CapEx is for pharmaceuticals. Is that a fair understanding?

Yes, yes. Yes.

And sir, 1 of I think previous questions, you mentioned that the capacity pension is paracetamol is 55% currently. Is -- did I hear that correct?

You hear it correct, but need to understand the background also because 55 is of the recently increased facility, this is 10,800. Earlier, we were having INR 3,600, that was running around more than 100%. So from we reached the 10,800 new plants. So this is capacity, 55% utilization we are talking about the new plant having the installed capacity of 1,800 if we compare year-on-year basis relating to the 3,600 we were having previously novel having close to 11,000. So this is of that.

And how do we see this in the next 2 to 3 years? Should we look at the way we are looking at demand. We are looking at 2 to 3 years, please reaching full capacity, 10,000?

10,800 tonne, we are using that in the FY '26, we are hopeful that we will be reaching to around 70% to 75% capacity utilization in FY '27 itself. And I think in FY '28, we will be having the full capacity utilization by that time.

And sir, with the 3 sintering capacity, is the cost become better and we pass that on, are you able to get some better margins? If you can comment a bit on this?

The existing tomato fully automized. And because we have started around 3, 4 quarters ago. the increase in the capacity utilization will result in the lower cost of production.

We take the next question from the line of Rachit Singhania from Robo Capital.

Yes. congratulations on a great set of results. So I was just trying to understand like according to the capacity increase, what would be our approach like maximum revenue potential be right now?

On which product?

Like on the overall plant.

We have already discarwe are targeting around INR 2,500 crores in the next 2 FY 27. And we are expecting around 5% annual growth for top line every year. on the vesting level.

So it's like INR 3,700 crores are top capacity right now, talk to any potential as of the current capacity?

No. So I think the answer, marginally given is relating to how we are going to grow what you are asking is what is the maximum possible revenue can be generated from the existing capacities if I understand you correctly, is that Yes. So I think having considering the if we achieve 100% for all, this will be around 3,200 to INR 3,300

We take the next question from the line of [indiscernible] from Boeing AMC.

So would I know what type of customer was do we cater for the regulator market? Are the general clients on generic time for U.S. brands or big OTC players or there are multiple manufacturers. .

Our customer base, our customer base is the all grade customers, top customers we have in the pharma, though they are into the both generic as well as the branded products and you call OTC. So they are the mix of it.

Understood. And sir, I would like to know your strategy and scaling products which we have got approvals for across regulatory and unrelated markets for which we had made investment over the last few years and which are getting approvals right now, not Maxcom Parana, any other products which you think can scale up to that level such as Alupol or anything, INR 300 crore, INR 400 crore level.

INR 300 crores, INR 400 crores level you are talking about. So any a can scale up. So I think this is the product you have mentioned that paracetamol metformin, they are community high volume, but where other products like copy, Penta, [indiscernible] , we have the potential of around INR 100 to INR 150 crores in the upcoming 2 years.

Okay. Yes. Okay. Understood. And sir, the 1 Indian company, which is selling a ibuprofen asset, are you interested in it and taking their assets so you can get more clientele which were not under your basket.

I think we cannot comment on this sort of question and because of the regulatory as well as we are not sure about it, anything. We perhaps will not be able to comment on it.

What's the beyond that asset as a competitor?

We could not understand. Can you please come again.

What is your view on-asset whether it's a good or such scale asset compared to.

No comment no comments, sir.

We take the next question from the line of [indiscernible] from Alantra Growth Capital.

Regulation on a bit set up numbers. I now have 1 question, particularly on the pharmaceutical side. Could you please give some kind of directional margin numbers that we will do for say IBM non-IB business?

Company, as a branded, we discussed that top line we expect that the next France we can achieve around mid- to high teen revenue side, and we would like to have maintained the better EBITDA margin. But product-wise or it will be difficult to comment as of now? So go and non-above consider it as 1 segment. So we do not share the number what Ibu is giving in the bottom line revenue number we discussed that the bottom line is not being discussed.

Okay. But would it be safe to assume that it would be around the company average EBITDA margin as pharmaceutical overall business for moving.

Blended the margin for this year is 12.4%. And what we expect for the next year is around 14% to 14.5%.

And last question, more on IV business actually. Why you spoke about you looking at exports? Do you think there can be some growth in this business for the next 2, 3 years?

Yes, definitely, we can have we can expect some growth in IB also because still there is a little bit of scope of improving the capacity as well as the export market. And the annual growth rate of 3% to 4% every year for in mind.

We take the next question from the line of Ruchi from Bora Family Office.

Yes. Okay. So I can watch my questions are quite clear right now, but I just wanted to understand where to the -- we've completed 2 months of the first quarter. And of course, you said that we cannot analyze quarter-on-quarter. But how far do you see the company position for the next 3 to 6 months from now when being the cobalt situation also.

I think we will be able to maintain the momentum for next 1 or 2 quarters. But as you also accepting, we also said that it will be better if we gauge the company's performance on the yearly basis rather than the quarterly basis because so much dynamism is happening across the globe. So this is risky to comment on it coming quarter or next quarter. But because we had some expected funds, we also have the market history, and we also know about our efforts which direction we do we also know the development relating to the various customers. So on a yearly basis, we feel more comfortable to discuss.

Right. So currently, if we set a guidance for FY '27, how are we looking forward and what are our targets for the strong development.

So this is around mid-teen revenue growth we foresee, we will be achieving coupled with the EBITDA around something 14% to 14.5% for this FY '27. And I think last year, we also discussed, so we will be able to achieve that

We take the next question from the line of Maulik Varia from 361 Capital.

Just wanted to check, is there any update from the USFDA regarding the inspection?

See, the inspection, because U.S. already made 2 inspections for us are all the products are CP approved. And we have also the approval from Brazilian and others. So I think considering the products we are in general so whenever there is product comes for this approval, I think U.S. FDA is approving the products considering their requirement as well even without discussing without visiting us in that sequence, the Metformin was approved by the U.S. FDA and followed by the fenofibrate and other 2, 3 products and is already filing. So they have certain questions so we replied and if they are going to approve the end of the formulator, we also get approved by the debt. So this is not necessary for the U.S. FDA to visit us for approval. They are approving even without visiting.

We take the next question from the line of Shiekh Muhammad an individual investor.

Congratulations for the excellent set of numbers. My question is, we are making many chemicals. I heard that there is a price rise in the chemical side. But my question is, what kind of business we are doing with the chemicals man for in-house utilization?

So in-house utilization means they are the part of the backward integration process for the API products so we are using for manufacturing the and in case of Acetic anhydride, we whatever the capacity we are having around 50% to 60% is being utilized for the captively and remaining we are selling into the open market However, it highly stat is the product which is 100% being used for the merchant sale because we do not have any use captive for captive consumption of this product.

Sir, what kind of price increase we have received in Parana is there any price increase in Paracetamol in the India or nonregulated market because in the I have rate transcript of Granules India, they have told that there is no price increase in parastomal. Mostly, they are catering in the regulated margins so maybe, but I need to ask this question to you also because we are also doing in India.

So basically, prices see, prices increase was there for -- across all the products in chemicals and APIs because of some disturbances globally, logistics problems are there. The raw material price has also gone up so to that extent, the prices have gone up? In India or in the side?

So are we have an inventory maintained in the March month only starting of March. March.

Pricing increased pricing, in fact, the effect was later part of the March. So and that was due to the increase in the raw material prices.

In the results section, I have seen there is some INR 30 crore inventory. What kind of inventory we are having.

INR 30 crores.

Inventory or INR 30 crores inventory are INR 329 crores.

So it's a INR 371 crores inventory not INR 30 crores so that basically whatever products we are maintaining, we are also maintaining the inventory of the products we manufacture.

Okay. Okay. I don't know again.

Maybe we can you can ask this question separately as well with the details we will be happy to answer.

What is that way to asking the question after the conference call?

Our [indiscernible] has the detail in the last part of that, the e-mail ids are provided on the IR team as well as the company's executives. You can ask them or.

Next question is, what are the effect of crude oil pricing and West India complete on the company performance. And I am talking about logistic issues or raw material procurement issues any issues.

I think not much issue, but the prices across the board of all the raw materials has gone up. To the extent that crude is having the impact. Logistics has also gone up and is going up and some delays into the logistically across the globe. So that to that extent, it is impacting us. But no major and no direct.

Okay. Sir, do we import some materials from China?

Yes, we do.

Okay. Sir, regarding metformin, some key cashing materials are brokered from China only, right is there any company which is the manufacturing in India have started manufacturing in India.

As of now, no company is manufacturing.

Is there any buyback scenario you have in consideration?

And no, as of now, no, because -- as of now, this has not been discussed in the Board. But I think whenever this will be discussed, we will be able to get it because whatever the as of now, we are focusing on the growth. If we start buying back, then the growth will be impacted because you know that we also come up with the another land of 100 acres. So we also need to invest there in. So the company funds laserly will be utilized for the enhancing and just having the growth because we have not many growth projects. So but in the time we are adding a lot of many growth projects, I think buyback perhaps maybe the second option.

So we are having lots of capacity in our growth.

Yes.

Sir, the purpose of triacetin production, what is the rationale behind that? Are we using that in some API production.

Basically, it gives us technological advantage as well as the supply chain advantage internally. So that is the basic that we have come up with the price it so why are these being consumed prior it's many users we have outside the company also because it the use into the food industry, pharma industry, cosmetics perfumery. So it has provided applications. And it can also be the import substitute. It is also used into the filter segment filter. So it has lost many applications, and it can also be the import substitute.

Okay. Sir, next question is employees deepens and other expenses are rising continuously because what I have observed is the employee benefit expenses around 2 years by it was around INR 340 crores. Now it is almost INR 70 crores so we are having a lot many employees, right?

Because see, for this quarter, I think for this financial year, you whatever the increase you are looking at basis mainly because of the variable, which we give the next year we have provided for this year this year. So that is the reason. And there is no there is increase in the numbers because we have come up with new plants as well. So that is another reason. But there is no which stance change beyond this.

Can you give just the guidance or is that employee benefit expense full year?

So usually 10% to 12% no, related based on the turnover, we are having around 10%.

10% of revenue, right?

Yes.

We take the last question from the line of Canal from Boeing AMC.

Sir, I had 2 questions. Are we any planning to do some R&D on reducing our imported bill for the country? Any product you think you pull an denies over next couple of years which is dependent China. And second, are we seeing a decrease in API assets across Europe and Western action linked to more API demand for India and China and particularly for us, over last couple of years due to the environment regulation getting stricter in Europe for the last 2 years.

So the API demand from India is -- keeps on increasing on a regular basis. So I think this momentum will remain same.

Okay. No, no, I was asking there has been decreasing investment in APA across European and Western nations which is leading to any demand increase from them for our products?

So that is what I'm saying. The demand is increasing, and we also expect increase in the demand because either maybe because of the reduced investment by the European countries for the last few years. And the investment is also coming into the India and the demand from the India is increasing.

Understood. And any product you could you are planning to import substitute from China to.

As of now, we do not have any such product.

With that, we conclude the question-and-answer session. I now hand the conference over to the management for their closing comments.

Thank you very much for joining us today and for your continued towards the company. [indiscernible] 26 has been an encouraging year for the AUL we come improvement in operational and financial performance despite a challenging global environment, the powder, we are witnessing across both pharmaceutical and chemical businesses sorted by imperil product mix, optimum capacity utilization and disciplined execution give us confidence in our ability to sustain growth going ahead. Our continued focus on expanding the non-auto enhancing integration capabilities, improving scale across key APIs and maintaining prudent financial discipline will remain central to our long-term strategy. We believe that the company is well positioned to build on the current momentum and deliver consistent growth. Thank you very much and for any further query, please to contact our IR team. We would like to thank all our stakeholders for their continued transport. Thank you once again, and have a good day.

Thank you, sir. On behalf of MUFG Interim Investor Relations, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.