NGL Fine-Chem Limited ($524774)

Ladies and gentlemen, good day, and welcome to the Q4 and FY '26 Earnings Conference Call of NGL Fine-Chem Limited. [Operator Instructions] Please note that this conference call is being recorded. I now hand the conference over to Mr. Abhishek Mehra from TIL Advisors. Thank you, and over to you, sir.

Thank you, [ Farah ]. Good afternoon, everyone, and thank you for joining this Q4 and FY '26 Earnings Conference Call of NGL Fine-Chem Limited. The results and investor update have been uploaded on the stock exchanges. To take us from the results of the quarter and answer your questions, we have with us today Mr. Rahul Nachane, Managing Director; Mr. Rajesh Lawande, Whole-time Director and Chief Financial Officer. We'll be starting the call with a brief look view of the financial performance, which will then be followed by the Q&A session. I would like to remind you that everything said on this call is reflecting any outlook for the future, which can be construed as a forward-looking statement, must be viewed by conjunction with uncertainties and risks that the company faces. These uncertainties and risks are included, but not limited to what we mentioned in our annual reports. With that said, I'll now hand over the call to Mr. Rahul. Over to you, sir.

Good afternoon, everyone, and a warm welcome to NGL Fine-Chem Limited's Q4 and FY '26 Earnings Call. Thank you for joining us today and for taking the time to review our investor presentation and financial results, which have already been uploaded on the stock exchanges. Let me begin with a brief view of our performance for the quarter and the full year. Q4 FY '26 was a strong quarter for the company, reflecting continued improvement in our operating performance. The revenue from operations for orders stood at INR 124.23 crores compared to INR 94.97 crores in Q4 FY '25, registering a growth of 57% year-on-year. On a sequential basis, revenues grew by 17% over Q3 FY '26. This growth was primarily driven by higher volume across our product portfolio and geographies, supported by improved capacity utilization. EBITDA for the quarter came in at INR 21.41 crore as against INR 6.3 crores in Q1 FY '25. EBITDA margin for the quarter stood at 14.3%, an expansion of 769 basis points over the same quarter last year. Profit after tax for the quarter was INR 13.49 crores compared to INR 0.54 crores in Q4 FY '25. This was the third consecutive quarter of strong improvement in our operating performance. the recovery that we are seeing is broad-based with healthy traction across our portfolio end markets. This gives us confidence in the resilience of our business and the demand outlook for our products. Moving to the full performance for FY '26. Revenue from operations stood at INR 500.95 crores compared to INR 368.26 crores in FY 2025, reflecting a growth of 6%. EBITDA for the year was INR 72.69 crores against INR 33.87 crores for the previous year, more than doubling on a year-on-year basis. EBITDA margin for FY '26 stood at 14.5%, an improvement of 31 basis points over FY '25. Profit after tax for the year stood at INR 48.13 crores compared to INR 21.12 crores in FY '25, growth of 18%. FY '26 has clearly been a year of recovery for the company. Of the 3 challenging years, we have returned to a stronger growth trajectory with improving operational performance and better business momentum. During the quarter, we continued to face some external challenges. Geopolitical development led to an increase in freight costs and raw material prices. Since the part of our business operates under fixed price contracts, these cost increases could not be passed on immediately to customers. In addition, ForEx movements resulted in mark-to-market provisions and also mark-to-market provisions on investments, which had some impact on margins during the quarter. As require margins were sharply higher on a year-on-year basis, they were marginally lower sequentially. I'm pleased to share that we have already been able to secure a partial price through with customers. in the first quarter of the current financial year, along with the continued volume momentum, they should support margin improvement going forward. On the capacity expansion front, Phase 1 of our ongoing expansion program is now contributing meaningfully to operations. The higher volumes during the quarter were comfortably absorbed with this expanded capacity, which reflects our readiness for the growth. With respect to Phase 2 of the greenfield expansion at Tarapur, we did face certain delays during the quarter due to the shortage of gas and lever, which affected the pace of construction. As a result, commissioning of Phase I, which was earlier expected in Q1 FY '27 is now scheduled for early Q2 FY '27. Although we remain on track to commence commercial production from the second half of financial year as previously guided. Of the total plan CapEx of INR 210 crores, we have invested INR 182.75 crores up to Q4 FY '26. In terms of business mix, animal API continues to be the core of our business and contributed 95% of revenues during the quarter. Our customer and product concentration remains well diversified with the top 10 customers accounting for 29% of sales and the top 10 products contributing 66% of sales. To summarize, FY '26 has been a year recovery marked by strong volume-led growth held margin expansion and steady progress on our capacity expansion plans. We are entering FY '27 with good operational momentum, expanded Phase I capacity origin service and Phase II progressing towards commissioning. With partial price through our already achieved and volume traction continuing, we are confident of building on this performance in the coming quarters. With this, I will now be happy to take your questions.

[Operator Instructions] The first question is from the line of Dhwanil Desai from Tata Capital.

Congratulations for a very good set of numbers. Sir, my first question is, we talked about Unit 1 contributing significantly now to volumes. Our understanding was that Unit 1 was boldly a clean room for validation batches in order to kind of squeeze the time line. So if you can help us understand that you need 1 capacity coming in what kind of revenue run rate we can do even without unit if you can talk about that? .

Well, I think you're talking about the fees on and Phase 2, correct? .

Yes. I'm talking about Phase 1. I thought it was more for validation batches and clean room was more for kind of preparing us for the launches and squeeze the time line. So not much of incremental volume was to come from Phase I is our understanding. So if you can help us understand how should we look at the volume buildup in Phase 1 of the new plant? .

Yes. So in Phase 1, you are right, we have put up a small volume section for doing the valuation matters. But we are also putting an intermediate plant in the Phase I. So production has gone up because the we were able to produce more intermediates over here. Plus, we have also increased our outsourcing. So with these 2 things, we have been able to get a good strong volume growth. And Phase 2 is a total of 5 cleanrooms that will come into should be commissioned in the next quarter. .

Okay. So this INR 150 crore kind of a run rate plus whatever somewhat what 10%, 15% growth on that can be catered through Phase 1 and outsourcing put together? Is that a fair understanding? .

Yes, that is what we have achieved right now. Correct. .

On the Phase I part of it, again, I think whenever we kind of commercializing the -- so this year, the idea was that we will try to do regulated market business here, but it is contingent upon product type transfer happening and U.S. FDA coming and hence Europe plus U.S. is a scaling up. So till the time that happens, should we look at the capital utilization of Phase II unit? And on the same note, any standfront time line for the U.S. FDA inspection for the products that we have filed, which would have recused the U.S. FDA on it. So this is the question on Phase I. .

Yes. So we have already started filing our BMS, and we are in discussing with some customers and they have already started reverting our products. Samples have been sent across to them. They are running trials with those products. And they will file with our additional supplier. And once they file it configures the audit. So we do the Q then based on availability from the U.S. FDA team, the fuel the audit will get bigger. So -- that can happen anytime during the current year or probably next year also because it depends entirely on the regulator. There is no control that we can accelerate over that they .

Okay. But by the time, let's say, if it happens next year or towards the end of the year, how should we look at the utilization of the Phase II without U.S. FDA in place, what kind of markets we think we can scale up the Phase II or utilize the pace to capacity look?

So we will be manufacturing our regular products. We have got good demand growth going right now for -- in the existing markets also. So part of the capacity will get used for fueling the at volume. And we are fairly advanced currently in -- with the European registration right now. So we anticipate that business to start coming in towards the last half of this year. .

Okay. So we will use that for ROW plus Europe in the time U.S. ever comes in? .

Correct. .

Got it. And sir, last question, and I'll come back and back to you. You talked about the ForEx losses. Is that -- can you quantify that number? .

I don't have that number with me right now. but it's basically mark-to-market provisioning -- so I will need to check on that. I don't have it with me. .

The next question is from the line of Ishan Thakkar from Fort Capital. .

I have a couple of questions. So we currently have 3 CAP transistors in Europe. So earlier, you had indicated that another 3 CPs were review, an additional filing or plan until March 2026. And then also guided towards achieving a total 8 CAP approval by the end -- so could you share the current status of the approvals and the expected time line going forward? .

Currently, we have -- as you rightly said, we have 3 approved 3 year under review and 2 are being prepared for submission in the current quarter. Those 3 were submitted way back in the first quarter of last calendar year. And currently, they are taking probably in the range of something like 18 months to give it. So we expect it to come through in the second half of calendar year '26. .

Okay. So by end of the [ FY '26 ] right? .

The more are expected by the end of this calendar year. .

Okay. And 1 more?

No, I have 2 more are being filed in the current year. But that should come through only in '27. So let me give you this way. We have currently got 5 DMF registered and 3 CEPs, which are already done and registered -- we have got 4 more DMS, which are 5, which are under review, and we have about 3 CPs, which are under review. So that makes it by the end of this year, we are hopeful of getting a total of 6 and 9 years. That covers most of our products of our products. .

Sir, the current participant got disconnected. We'll move on to the next question. The next question is from the line of Rahul Jain from Credence Wealth.

Congratulations on your entire team for performance. a couple of questions. One, with regards to the CapEx. For Phase 2 CapEx, initially, we have talked about INR 50 crores. And the previous quarter presentation, you have mentioned about increasing that CapEx from INR 160 crores to INR 210 crores. So sir, with additional INR 50 crore basically, are we adding some more capacity? Or how much of it will be the additional capacity being done? And how much of it would be the cost up from INR 160 crores to INR 210 crores. That is my first question. .

Yes. So the total increase is of INR 50 crores, close to about increase due to some higher level of automation and digitization, which we have done in the plant. And roughly about INR 50 crores is due to increase in the cost of metals. .

And that effect on this INR 210 crores will be somewhere around 2x.... .

No, this may be really not result in additional sales. .

Okay. And so with regards to recovery in terms of you have mentioned the presentation that you have had some partial price hikes having done so typically, what kind of price will take up -- and what further do you anticipate to take to cover the kind of cost inflation which has happened due to the environment? .

The price increase depends on each product separately -- and basically, whatever the increase in cost has been we have tried to keep, it's fair by trying to just the price increase. So it varies from product to product.

So analysts you have spoken about coming back to margins. So are we talking about somewhere around 17%, 18% EBITDA margins man -- because our gross margins have been quite decent. .

Yes. So as -- I mean, we have maintained 15% to 18% is a level which we want to get to our EBITDA. We are close to that particular close to that line right now. .

And sir, last one, the other expenses have seen a sharp increase in the current quarter, almost about INR 10 crore 1 crores is the increase on a quarter-on-quarter basis. So I understand some part of it will be related to -- is there some additional costs due to also the new plant or some product education, which has come in, which is kind of a one-off and not to not be a regular expense? .

Mainly mark-to-market provisioning on ForEx and investments. .

Okay. So just one wish is if you could share those details, maybe in the result as a area of or in the presentation, that would be really helpful.

The next question is from the line of Ankit Gupta from Bamboo Capital. .

From actuation for a very good set of numbers and for and there is a commentary of the best we have seen the most bullish we've seen over the past now 3, 4 years. So, if you can or talk about the demand environment a about it in your opening comment as well as in the presentation. If you can elaborate a bit more on that? Like is it a broad-based demand that we are seeing across geographies, across products, what is leading to this demand. our top 3, 5, 10 products are doing well or the products about the new products have started scaling up. So if you can elaborate more on that. .

So today, we are doing close to something like 45 APIs now, which has substantially increased over probably about 3 years ago, where we are just about APIs in our product list. So we have doubled the pipeline in the last 3 years. Also, now we are able to penetrate and reach across different markets much more effectively. So we are now -- Latin America has turned out to be fairly successfully for us. we have been able to have our product registered and accepted by a number of the customers there. So overall, because of the larger product portfolio, which you have got and also better sales in marketing across different geographical functions. -- we are able to improve our sales. .

Got it. So like on specific, the new products have started scaling up and like we are seeing some reduction in our top 10 products contribution over the full year. So like -- is it the new products which have started scaling up and is that happening? And on geography, apart from LatAm, LatAm you have been alluding to in the past call also, but like even in Africa and Southeast Asia, how is the demand that you can talk about?

No, we have -- as I said, we have seen volume growth across geographies. So it's -- there has been a good demand coming from all across the world currently.

Sure. And secondly is on the competitive scenario, how is it currently because last 3 or 3.5, 4 years, we've seen significant increase of competitive intensity in India as well as from Chinese players. So of course, in the developed markets, the competitive -- the competition is in. But even in the market that we are largely serving today, how is the competitive scenario? And is [indiscernible]?

The competitive scenario continues to be the same. There's a lot of competition in the market from Chinese as well as Indian companies. erodable to trying to find their own fleet on the ground. So there is no reduction in the competitive sector I assume that given the other companies, [ Cavette ] are also doing well total demand improve, it's not unique only for us especially across the entire spectrum.

Sure, sure. . And then for the new plant for like as you alluded to, we'll be utilizing a plant also or our existing business? Will that be largely for Latin America or for the other geographies also? .

We don't look at just the geography. So we will move certain products into that product plan. So whichever geography that the demand will be, it will be [indiscernible]. .

Sure, sir. And sir, on the new -- on the CPs and the VMS that we are filing across as well as Europe. So if you can elaborate on a bit on how is the market size? Are they largely INR 40 crores, INR 50 crores kind of products, 200 -- sorry, INR 100 crores, INR 200 crores kind of products and we are trying to take like 10%, 20% of the market share over the next few years. So if you can elaborate a bit more on the market size of this product for which we have filed registrations and we are in the process of filing how big can be some of these products in terms of market size, if you can elaborate on [indiscernible]? .

More sort of products, which we do, there are significant companies already out there. Most of the suppliers already have to suppliers for each product at times, they may have a supplier also. Our intention is to go with our proposition by which we are able to diversify their portfolio and also go with the China plus 1 strategy. In terms of market size for this particular of these products, there is no published data on for each product that we can cut. And whatever proprietary information we have got, I would like to keep it with us only rather than disclosing the size. But whatever growth plans we have got in terms of getting to the of the sales. So we are fairly confident of reaching those volumes over the next 2 years, 3 years. .

SP1 Got sir. And just last question on the performance going ahead. So should we assume that the INR 150 crore quarterly run rate becomes a base for us going forward with new capacities also coming in, demand also significantly improving in our existing markets.

Yes, that is our aim, meaning to get to 150 plus sort of a situation. But it will take a little while for it to stabilize at those levels....

Stabilize at higher level or INR 150 crores?

Pardon?

Stabilized at higher levels than you.....

It should take a little while, probably 1 or 2 quarters to stabilize at that level and then go higher. .

Next question is from the line of [ Prit Jain ] from [indiscernible].

Congratulations on good set of numbers. My price portion expansion peak revenue potential was indicated at INR 36,400 crores. You already crossed INR 500 crores in FY '26 to outsourcing. To post the new plant commissioning, what is the new peak revenue potential at full utilization is INR 78 INR 800 crores a reasonable estimate.

We have indicated earlier that with the new plant, we should be able to generate that turnover of between INR 350 crores to INR 400 crores. .

And my another question is you mentioned that the veto patent expired in March 2025 and commercial launch happened in May 2025. Our data suggest that at least to be there, including [indiscernible] manufacturing and been active in APL. So how many prior competitors have actually come to market teams of patent expiry. And are you seeing the price [indiscernible] or it has already been done. .

Which product did you refer to?

[indiscernible].

[indiscernible]. So I have not had other file and Sequent are doing this product. We haven't seen them much in the market for this -- there are a lot of Chinese companies manufacturing it. And price erosion has already taken place. So it's more or less now at, I think, at a long-term price further going now from here -- we don't anticipate it to decrease significantly. .

Okay. And sir, if you can help us understand the utilization of new plant on debates, if we are witnessing such good volume growth, how can we quickly increase the outsourcing? And what is the current outsourced contribution in our revenue?

So we also mainly intermediate. So fine products are on metered by us. So in terms of volume of intermediates, purely, we are outsourcing currently about 20% of what we require. .

And on the capacity utilization side, what will be the utilization of new plant on annual basis? .

It is -- the Phase 1 is now more or less operational at about 70%, 80% Phase 2 is you to steal. .

Next question is from the line of [ Nishita from Sapphire Capital ]. .

Yes. I am fairly new to the company. So apologies if the questions are [indiscernible]. I just wanted to understand, you mentioned that from the new plant, we can generate revenue of around INR 150 crores to INR 200 crores. And from the existing plan, we've done around INR 40 crores of revenue is it safe to assume that we can -- our overall top line with the new capacity on the beaches it can be around INR 890 crores. .

I think I have indicated, I would not like to put this together. So yes. .

Okay. Okay. Understood. And we've already done CapEx of around INR 2 crores for our capacity expansion in Q2 and what is the before that we anticipate in FY '27?

Okay. the project will get over as we integrated at about INR 210 crores. And normal CapEx, which we incur is in the renew of about INR 15 to INR 20 crores. .

Okay. Understood. And how fast can we scale up to the to utilization and perform Phase 2 as well?

We would assume it will take us about 3 to 4 years.

The next question is from the line of [ Bhiraj Dave ] from [ Samvad ] Financial Services.

My question is, first of all, to relation on sale of business and also to go through the difficult time. One is the question is like we highlighted CapEx and so much kind of be as for the presentation. Now we are the setup around red crores. So what would be the management view on capital allocation for you see the 3 years kind of it? Like you would have cash flow -- free cash flow as per the current business operation to INR 100 crore kind of debt. But because we see constantly no improvement in dividend, it's being fixed that on above. So I just want to be our allied capital allocation and burden are looking at some further cap.

What was the question here exactly? .

My question is Yes, yes. So my question, we have INR 35 crores to INR 40 crores of cash flow coming every year. We had at outstanding of INR 100 crores approximately. So I assume like the INR 10 crore kind of incremental CapEx coming because of expansion the onstream. So will you be having broadly INR 50 crores CapEx end of the FY '28. And -- then what we will do with cash flow? Because we see significant growth, I understand you have done a large CapEx, so you couldn't a dividend. But after this taconite to improve dividend or do buyback or something like that? Or you have something for CapEx?

Currently, we are funding the entire increase in cost also, not by doing additional boring but by internal approvals. So the capitals are required for funding this. .

Yes, that is [ perforins ]. Not sorry that issue of that part, and you have done actually maintaining your equity and iCap. I'm looking at 3 years down the time because then you will be having a significant large free cash flow available. So what is your thought on this part I'm assuming 2 years repaying your debt as well because even if you are enter INR 30 crore 35 crores, INR 40 crores, we have INR 100 crores [indiscernible] that do decide 2 years then what is the management post whether we will see some up?

Frankly, we have not thought about our dividend strategy of 3 years down. .

[Operator Instructions] The next question is from the line of [ Tanmay from 361 Capital Markets ].

I wanted to ask about the U.S. API FDA. There was supposed to be an audit triggering in FY '27 and commercial production also to commence in FY '27? Can you comment on the same?

Yes. So we have started filing our products. VMFs have been filed starting from second half of last calendar year. Until now we have 5 VMs already. And in the current year, there is a plan to file another another 6. And we have already started engaging with customers. As I said, they have started evaluating our samples, running it boxes with our product which will then go into stability and some clinical trials. And based on that, they will apply to U.S. FDA to add us as an additional source. And once they do the filing, that should figure the inspection requirement from the U.S. FDA. And then based on their schedule, they will do the inspection.

Any time line on the same?

Pardon? .

Sorry, any time line on the same? .

Unfortunately, the regular does not give a time line on this. So it can be every time this year or it may be even next year. .

Okay. And since we have passed on all the costs that escalated to the customers from Q1, can you give any margin guidance on that path....

Let me correct that we have been partially successful in past a price increase, not fully successful. So that one is the first one. And secondly, the -- as I said, our intention is to get to an EBITDA margin level of between 15% and 18%. And we are fairly close to that at the current level. .

Next question is from the line of Ayush Mittal from Mittal Analytics.

First , congratulations on the good top line growth that we have been doing. I want to understand more about the margin profile that we should expect going forward given that the oil prices have risen going sharply to have so many of the chemical commodity costs? We have talked about a partial price increase, but like in past C, whenever oil prices increase, our margins are some 50-odd percent. How do you expect them for coming couple of quarters given the current advisement?

It's a little bit difficult to predict what can happen in the short term, but... .

Given today how the things are barring that further increases happen or something, is that given where we are today, and the price increase that we have taken, based on that, what kind of profile do we see they should be -- we are achieving currently maybe? .

Yes. So for some products where we compete with China. China did not increase their prices at all in April and May -- sorry, March and April, they were able to keep at the same price level, which was very surprising for us. But we see now that the they have started reacting and there is an increase in price coming from China also. So partial price recovery is that, and we hope that as Minghe competitive scenario remains the same for everyone. Everybody is buying the same material at higher prices. . Probably China had larger stocks of the material and therefore, there was no sharp increase. But we really were clueless about that. So -- but we can see that price increases have started coming in from China also, which is a big relief to us. And as I said, going forward, we expect to reach an EBITDA level of between 15% and 18%.

Okay. And can you -- like for the whole vascular product, some kind of percentage indication you had like how much of price increase has happened? Is it 5%, 10% 15%, how much price increase has been done?

That is a little bit of market-sensitive knowledge... .

Like overall?

Let me put it partially gone through. So -- and I'm saying that our margin guidance is unchanged. So I guess you can target from that. .

Okay. Sir, second thing is like we have been doing this large expansion, and we are moving towards the regulated market thing. Can you give us a sense that by when do you think that some material numbers success will start coming in by then, should we be able to leased or in to utilize the new capacity that we have created. And also, as of today, what kind of margin profile are you seeing on this side of business?

Significant [indiscernible] at is a bit significant sort of revenue starting only from the next financial year. that is '27, '28. Margin profile in the end, how to a similar sort of thing 1 because OpEx also when time goes up. and price decreases, which took place in the last in the last 3 years, 2 years, especially basically '24 and '25, we saw a large price [indiscernible]. It started recovering a little bit now and overall being improved margins remain more or less in the same area when it looks at there's probably a 3% to 5% higher margin profile that we can expect. .

Okay. You mean 3% to 5% over your 15% to 18% band?

Yes. And that will be only on those things and not on....

Upwards. Yes. So if you have to assume like if you are aiming to do, say, a conservatively INR 800 crore number, Out of this, from the regulated market, how much do we aim to do? Will it be like INR 200 crores, INR 250 crores, INR 150 crores, what kind of numbers do you expect we should taking down 2 years or something. .

I would like to not speculate on this because the registrations need to go through for all the products. the regulator needs to come in, expect and apo facility. It would be a real cautious in not giving you numbers are this -- let us for a couple of more quarters before we start committing to it once we see that the movement is taking place. .

The next question is from the line of [indiscernible] from Credent [indiscernible].

So you have added 5 new plays in this maybe over the next 2 to 3 years products you could at?

Currently, our budgets to add 10 products on a yearly basis between 9 and 10. At times, it's chemistry is relatively similar to what we are and the number goes up, but our internal budget is to look at between 9 and 10. .

Okay. And you really 47 new customers in this quarter alone. Maybe can you talk a bit more about it because you see so many big numbers in just 1 quarter. So maybe can you explain more in detail. .

We are right now selling across better or better penetration in all the geographies which we are selling. That is the only reason for the customer number going up. .

So basically, one customer at say, was buying in 1 country, we start buying for some other countries will count it as 1 more customer?

Yes. If it's a multinational company, yes, each country where we start buying because the registration and approval process is different for each country that become a new customer. .

Okay. And also now you have leaned job. But in last few presentations, I have seen that you continue to cater to size of top 10 companies worldwide. What could be the reasons why we are not able to achieve a breakthrough in those sites, what could be the reason?

Some companies don't want to change their supply chain so easily. They look for a substantial saving before we change. So -- it's a question of time. I guess, sooner or later, we will be able to start catering to them also. .

The next question is from the line of Rohit from ithoughtPMS.

[indiscernible] so just 1 clarification, I think to, I think you mentioned that the regulated sales was will start from FY '28. I think to an earlier question, you had said that Europe probably will start somewhere in '27 as well in last quarter. So just wanted to understand I mean I just wanted to clarify this. .

Yes, yes. We expect to start selling to Europe in the current year and the U.S. in the next year. .

Okay. So essentially, you are saying that there will be some contribution from regulated markets, but the majority will happen in -- is that how 1 to be it? .

That's correct, yes. .

And in terms of -- sir, on sort of to go back to the margins. So of course, I mean, without the regulatory business needed were the majority of last -- I mean, between FY '15 to '21, '22, I'm not of the high margin that we did post COVID even before that, we were doing 20%, 21% kind of margins on a fairly regular basis, given that we -- I mean -- so excluding the regulated business for a minute, do you think those margins are tough to get back to or because of confidence? Or is this -- you're saying that demand is coming back for everybody and like now things are improving. So just wanted to get more sense on that?

So we were seeing a classical oversee situation and which led to a lot of price erosion in '24 and '25. And that that's definitely been a date on attaining higher margin profitability. Now whether this changes and mean fiber situation where demand is now outgrowing supply. I think that is still probably a few years off because China is known to have capacity to lose amount of capacity. -- created to over of capacity. And also in India, also, there has been capacity expansion. So I am not too sure that we can see the return to those numbers at least in the next near at least 2, 3 years. .

The next question is from the line of Dhwanil Desai from Turtle Capital.

Two questions. Sir, one is, sir, if we -- in terms of product portfolio, I think after large animal, we are focusing on the companion animal side. So if you can talk about out of the products that we have currently around 43%, -- how many of them are on the companion animal side and typically in the regulated market companion animal business are significantly larger and growing faster also. So in terms of the VMS that we have filed or are going to file, are we focusing on the companion animal side of the business? And tied into this would be a Furar, -- we are the only 1 we were thinking in the India. So how the scale up is happening on that product? If you can talk about that.

Yes. So -- when we say that comparing an animal health business is growing, it's mainly for the finished dose companies. It brings in more value for that. On our API sale by side, there's really no great segregation between these 2. It's just lot of the large MLPs are also used for compared I think it was also like d-dimers or supplements. What is unique is probably acaricide is unique to companion animals. And [indiscernible] is 1 example of that. . But for us, the volumes actually come from farm animals. Just to give you an example, a cow or Buffalo weighs 1,000 kilos and a dog weighs 40 kilos. So proportionately, the more medicine, which to will consume will be far more than what a dog will. So for us, volume always comes from farm.

And on [indiscernible]. We thought it was a very large opportunity and then faces also coming in for liners will be a large opportunity in next 2, 3 years. So how are we positioned there?

So we are also pretty optimistic on that. We have already got -- Surana is now commercial fusion liner technologies is developed. We have also sampled this product extensively. So that comes there are companies who will be ready to launch this when it pulls out of in the next 2, 2.5 years in. So we are bullish on these markets. We see that market will also expand significantly in these products. Generic products have started coming into the market now. A lot of companies are offering these -- the [indiscernible]. And price revision has taken place significantly. But at the same time, the original inventor its also across later prices. So it will play out in next 2 to 5 years. We are fairly confident it will be a good product for us. .

Okay. And sir, second question on the ROW market. So even previously before we put up this CapEx or even after while we are in the [indiscernible], we always mention that. Idea is to continue to grow in the ROW market at whatever 15% kind of a number -- now once currently, we have the new capacity available in the time the regulated market business scales up in the new facility. But eventually, for ROW market, because we are operating at a full capacity in the existing units. Do we see a CapEx requirement for that? And are we kind of thinking along that line at the moment?

We have got some plans of doing expansions in our existing facilities. However, they are not for the current year. It's planned for the next financial year. It will help us shore up our capacity for the market. .

Got it. It will be brownfield then, right? You are seeing existing facility .

At our existing plant, yes. .

Next question is from the line of Ankit, an Individual Investor.

Sir, I wanted to understand, you talked about 15% to 18% of margin possibility. But given -- but in FY '20, this we made much lesser margins -- and given crude volatility, you said that things may not be looking that well and China hasn't taken much pricing. So what is making us confident to give us these numbers 15% to 18% range?

We have been able to partially pass on the price increase. So we are fairly confident that it's [indiscernible]. And as I said, we see that China is a raising prices now from the current month onwards. So we are -- that is what gives us the confidence. .

So this margin range we expect to start from Q1 only and things will start to stay in this range is what am I understanding.

I would expect it to start from Q2 onwards. 2 month, [indiscernible] was -- would really not be all that great because we might see probably a 1%, 2% variation here or there because price increases started going through mainly from the current fund. .

Got it, sir. And sir, in terms of volume expectation, growth expectation, what should we expect given Europe is also starting this year and next year, U.S. also start over, say, 1 to 2 years when things recover, improving regulated side. So how should we look at overall revenue growth for the company?

However, we were also surprised by the revenue growth which we saw last year because we -- and initially, for the first 2 quarters, we were pretty cautious in saying that we need to see that this growth continues for at least 3 to 4 quarters before we can be sure that the demand is back. And we have seen that happen now for the last 3 quarters. Growth has been stable. We are seeing numbers go up. That gives us confidence of achieving the run rate quarterly similar update for this year also. .

Sure, sir. And sir, in terms of overall revenue potential at peak utilization, what is our number? Any range, sir?

Normally, we don't give forward-looking numbers. So I would be a little hesitant in doing that right now. p.

No, I'm just asking peak potential if full utilization happens. .

So from a new expiration, we expect to generate up to INR 350 crores turnover. So -- and we should be able to get to that level over the next 3 to 4 years. .

[Operator Instructions] As there are no further questions from participants. I hand the floor over to Mr. Rahul Nachane for closing comments.

Just give me a minute, please. Thank you all once again for your participation and for the thoughtful questions. We look forward to building the momentum of FY '26 and update you or not for progress in the quarters ahead. Thank you, everyone, for your time. .

Thank you very much. On behalf of NGL Fine-Chem Limited, that concludes this conference call. Thank you all for joining, and you may now disconnect your lines. Thank you.