Vishnu Chemicals Limited (516072) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm Saumya, moderator for the conference call. Welcome to Vishnu Chemicals Limited Q1 FY '25 Earnings Conference Call hosted by Sunidhi Securities and Finance Limited. [Operator Instructions]. Please note that this conference is being recorded. I would now like to hand over the floor to Mr. Rohit Sinha. Thank you, and over to you, sir.

Thank you, Saumya. Good afternoon, everyone. Thank you for joining us on Vishnu Chemicals Q1 FY '25 Results Conference Call. I would like to thank the management for giving us this opportunity to host the call. From the management side, we are joined on this call, Mr. Hanumant Bhansali, Chief Financial Officer. I would like to invite Mr. Hanumant to initiate this proceeding with his opening remarks, post which we will have a Q&A session. Thank you, and over to you, sir.

Thank you, Mr. Rohit, and good afternoon, everyone. This is Hanumant Bhansali with you. I'm the Vice President, Finance and Strategy at Vishnu Chemicals Limited. Firstly, I'd like to greet all the participants from India, 78th Independence Day to all of you. Let's start with something about what we really want to convey before we start talking about the highlights of the quarter. India. So growth is the natural trajectory for any country in the world. But only in this time around, we are witnessing India becoming an important catalyst in global growth engine, be it in terms of visionary leadership, manufacturing ecosystem, quality of talent, ease of doing business, customer support, logistics or the standards of improving corporate governance. India specialty chemical sector has been playing a pivotal role in driving the chemical industry's growth. The theme make in India and sell globally is becoming a reality to some extent, underscoring India's growing significance on the international market. Overall we're delighted as a country and as a company to see this opportunity come our way as the world is looking to Indian manufacturers to deliver excellence on a global scale. Without much ado, I would now like to share the highlights of our business for the quarter gone by. Speaking about the consolidated results, the operating revenues increased by 13%, both on a Y-o-Y and a Q-on-Q basis. In Q1 FY '25, the operating revenues stood at INR 338.8 crores compared to INR 300.7 crores in preceding quarter last year. EBITDA increased by 9% on a Y-o-Y basis in Q1 FY '25 compared to INR 55.6 crores in Q1 FY '25 compared to INR 51.1 crores in Q1 FY '24. The consolidated PAT increased by 6% Y-o-Y in Q1 FY '25 to INR 30.5 crores compared to INR 28.6 crores in Q1 FY '24. Coming to stand-alone results. The operating revenues increased by 3% Y-o-Y from INR 249.9 crores in Q1 FY '24 to INR 258.2 crores in Q1 FY '25. The stand-alone EBITDA increased by 3% Y-o-Y from INR 42.6 crores in Q1 FY '24 to INR 43.8 crores in Q1 FY '25. The stand-alone EBITDA margin stood at 16.96% for Q1 FY '25 compared to 17.03% in Q1 FY '24. The stand-alone PAT of the company stood at INR 26.3 crores in Q1 FY '25 compared to INR 25.5 crores in Q1 FY. During the quarter gone by, the company achieved an all-time high production volume and maintained a balanced sales mix between domestic and export markets with a 50-50 ratio. To address rising freight and raw material costs, the company increased the realizations of its finished goods across most of the products. Additionally, we strategically invested a portion of our gross profits from barium chemistry into competitive markets, positioning ourselves well for the longer term. It is encouraging to note that despite the increase in freight costs, there is continued demand growth for our chemicals, which underscores the innovation in the use cases of our products. Since the discovery of chrome ore way back in 1798, industrialization and urbanization have driven new applications for chromium and barium chemicals. Today, these chemicals are key to producing super alloys. They are key to producing pharmaceutical products and also a lot of consumer products, which shows that our products are serving the pharmaceutical industry, consumer industry as well as the industrial sectors at large. Going forward, the company is poised to invest time, manpower and capital to leverage its operational capabilities and reach to better serve our customers throughout the year. Kindly note that our results and the investor presentations have been uploaded on the exchanges as well as company's website. With this, I thank you all and conclude my opening remarks. We can now commence the Q&A session.

[Operator Instructions] Our first question comes from Rohan Patil from Turtle Capital.

I just joined a little bit late. I might have missed your opening remarks. So can I get an update about our margins because quarter-on-quarter sequentially, our margins have decreased on consolidated basis.

Thank you, Mr. Rohan, for this question. Sequentially, the EBITDA margins were about 16.4% on a consolidated level compared to 21.2% in Q4 FY '24. Q4 FY '24, we had more inventory of finished goods that was sold during this quarter. And thereby, there is a reduction of change in inventory, leading to better -- leading to a more normalized EBITDA margin for us during this quarter.

Okay. So can we expect -- as in last call also, you guided that this year due to your order book, we might be in the range of 20%, 21% EBITDA margin. So can we expect that...

So we have not given any guidance on the EBITDA margin for the financial year. What we have said is our EBITDA margins have improved significantly over the years from ranging around 12% to 15% a few years ago. Today, we are quite healthy in the range of 16% to 17%. We'd like to consolidate this and improve it further by the end of the year to reach to about 17.5%, 18%. But our target in the next 2 to 3 years is to achieve EBITDA margin consistently at 20%.

I still have a couple of questions, and please if I, yes. So this quarter, we have seen INR 80 crores revenue in barium sales that we have done around INR 80 crores. So can we expect this run rate to continue for the year?

We are hoping that the entire year gets better from here because in barium vertical, like you are aware, we are seeing improved traction for both the products that we have in the barium chemistry, primarily if I'm talking about barium carbonate as well as precipitated barium sulfate. So we hope to improve the run rate going forward.

And now the second question is on Chromium side. Yes, can I -- seeing that we currently contribute in a single digit in a lot of chromium products, like our market share is in single digit compared to the industry. So is there room for us to increase.

It's a very good question. So here, I'd like to discuss with the entire forum a little bit about our market share in Chromium chemistry. In India, we have a market share of 60%. And globally, our market share is close to 10%, around 8% to be specific. In the next 3 to 4 years, our target is to become a global market share leader with around 12% to 13%. And in India, we would like to further consolidate our market share. So in most of the products that we sell into India, we are -- we are already having a market share of more than 50%. And on an overall level, our Chromium chemicals market share is 60%.

Okay. So this 12% to 13%, is it achievable in the next 2 to 3 years?

Yes. We are investing in this context. And like we mentioned during our conference call last quarter, we will come back with a detailed CapEx plan after our Q2 results are announced.

Okay. And just on all the three divisions, one is Chromium and barium sulfate and carbon, can I just know the capacity utilization for this quarter?

We don't share because of confidentiality reasons, the capacity utilizations in either of our chemistries because the information that is shared with the shareholders also is shared with the stakeholders at large. And that's why we refrain ourselves as a company policy to share the exact capacity utilization. But I can tell you for a matter of fact that in Chromium chemicals, we are producing upwards of 80% from a capacity utilization point of view. And in barium chemicals, our capacity utilization is in the mid-range of 50s to 60.

Okay. So there is still room to increase capacity utilization in the area.

Correct.

Our next question comes from Sagar Jethwani from Phillip Capital.

Sir, I have three questions. One, what went wrong with the India business during the quarter? The revenue growth was subdued. Any specific client segment that saw a significant slowdown? That is one. Secondly, despite taking the pricing action in the barium segment, what happens to the margin of this segment on a sequential basis, specifically the gross margins? This is second. And third is the utilization of CO2 plant that you can highlight?

Thank you, Mr. Sagar, for your three questions. I'll start off with your first part. So -- at a consolidated level, our domestic sales was 50% of our total revenue and export sales were 50%, which is, as you can see, is in line with our past track record of maintaining a balanced mix between India sales as well as export sales. So we have not seen any dip in India business as such. It's only that we have seen improvement in our export sales. So in FY '24, our domestic to export sales mix was 53-47 for the entire year, which is now exports improving to 50. So that's the range that we will continue to work at. In some quarters, you'll see domestic doing better than exports and vice versa. But on the whole, this will be our revenue mix for the entire year.

Sorry, I'm intervening here. So basically, where I was coming from is that not about the mix, it's about the Y-o-Y revenue growth. If you see, export has grown by plus 20%, okay? And India has grown by around 5%. So that's where I was pointing at. Maybe if you can elaborate any reason for that, if any?

Yes, of course. So a very good observation. And I think over here, the major increase in export business that we have seen has come from the barium business. As barium business compared to last quarter, we did more turnover from the export business as we foray into newer markets for our barium carbonate sales. So that increased our overall turnover for the exports business compared to our India turnover. I hope that answers your question.

Yes. Okay. And about second question -- second point about the barium margins, if you can comment on that?

Yes. A pertinent observation, I think, is why is there a dip in the gross margins of the barium business? Not necessarily a dip per se, but it's more from two points that, number one, we had higher finished goods inventory at the end of March quarter, which has got monetized and has been sold during the quarter, which has reduced our overall gain from changes in inventories. It's more of an accounting treatment rather than any major shift in our margin profile. And second thing is we have also used some part of our gross profitability achieved in the barium chemistry to penetrate into newer markets. some of them being like U.S.A., which is one of the most premium markets in the world, let's say, after Japan. And we have used some of the margins earned during the quarter in barium business to mark our foray into these markets. And that's the reason why you can see a little bit dip in our overall profitability or EBITDA margins in the Vishnu Barium business.

Okay. So when do you expect the revenue to flow in from these?

The revenues have already started flowing in. Like it was pointed out during the call earlier, our operating revenues from barium business has been in excess of INR 80 crores during the quarter gone by compared to nearly about INR 60 crores in Q4 FY '24. So we have seen an increase of more than INR 23 crores in just 1 quarter alone.

Okay. And lastly, about the utilization of CO2 plant during the quarter?

Thank you for this question. Our utilization of CO2 plant is quite encouraging, and we are now going to hit our optimum levels. Probably we have achieved close to about 80% utilization level, whatever we had envisaged. And today, our savings from that is close to about INR 4 crores to INR 4.5 crores a month, even in a cycle where CO2 is available for around INR 25, INR 26 a kg. So this is actually a very big achievement for us because there are very few companies globally, not just in India, who are converting carbon dioxide into sodium carbonate or soda ash as we all know. without necessarily procuring any other raw material to produce the same. So this is quite encouraging, and that's the reason why we are seeing more and more stability built into our gross margin profile over the years.

And what was the share of in-sourcing, the soda ash I'm speaking about?

Close to 40%.

It came down from 50%.

Yes. Close to 40% to 45% has been our sourcing, and we hope to maintain this ratio through the year.

[Operator Instructions]. Our next question comes from Aditya Chheda from InCred Asset Management.

So is on -- if you can tell us the gross debt number because the interest cost number is still consistent, and we were supposed to reduce some debt. So can you talk about the gross debt and about the finance cost trajectory going forward?

Thank you, Mr. Aditya, for your question on the debt. During the quarter, we do not report the balance sheet, but our gross debt is nearly the same compared to previous quarter that was ended on 31st March. Our overall finance cost is quite stable. We had an interest expense of nearly about INR 9.24 crores in the quarter ended 31st March. And in this quarter, we had an interest expense of about INR 9.12 crores. So there's not much difference in our finance costs in the reported quarter.

Right. Are we expected to reduce some debt in this financial year?

Overall, yes, because our term loans from banks are reducing. So -- as of 31st March 2023, we had term loans from banks at about INR 140 crores, which has come down to INR 84 crores as of 31st March 2024. And if the same run rate goes, we will be close to at INR 42 crores by the end of the year from the term loans position. So that reduces our overall outflow on the interest cost to the banks.

Right. And my next question is on the additional dichromate capacity that was supposed to be coming on stream around 10,000 tonnes. So can you guide us what is the status on that? And if you can also highlight the [indiscernible] capacity for segments as of today?

As of now, we have a total installed capacity of 80,000 tonnes in sodium dichromate. That is our primary finished good in the Chromium chemicals umbrella. We have been contemplating about adding 20,000 tonnes of sodium dichromate, and this will be built in phases, about 10,000 tonnes first and then the second phase would be about 10,000 tonnes again. We are still working on that. And -- but we are still working on completing that project. It's still taking some time for us to complete. But what we have done during the quarter gone by is we have done a complete exercise on debottlenecking our existing plants. So where we were hitting the capacity utilization of, let's say, 80% to 81%, we have seen most part of the quarter in Q1 FY '25, achieved capacity utilizations of more than 85% from the existing assets, which is helping us sweat it better, which is helping us give more production volume with the same fixed cost per se. So this is quite encouraging for us from a company where we were operating at a capacity utilization of 60% to 65% till about FY '22, we moved to about 80% in FY '23. And now we are looking at the same asset giving us a utilization of more than 85%. So going forward, we'll keep you posted on that on further increasing sodium dichromate capacity.

Right. And my last question is on the barium side. The additional revenue, can you talk if that was more from the new product launch that we had or from the base barium carbonate?

It was a very good quarter for us from a barium perspective because not just we achieved higher revenues in the barium vertical, but you will also observe that this increase in revenues came primarily from export markets. So in Q4 FY '24, wherein our domestic turnover in barium was close to about INR 28-odd crores. In this quarter, we clocked in close to about INR 34 crores from domestic sales. But if you see about our export turnover in Vishnu Barium, which was around INR 32 crores in Q4 FY '24. In this quarter, we clocked in close to about INR 48 crores -- so we have seen increasing turnover in both the geographies in which we sell. But we are more excited about our entry into some of these premium markets for which we have really worked hard over the last 3 quarters and seeing a lot of sustained momentum over there.

[Operator Instructions] Our next question comes from Pradeep Rawat from Yogya Capital.

So my first question is regarding the inventory days. So it has increased significantly. So can you highlight the reason behind that?

Good afternoon, Mr. Pradeep. Thank you for your question. I'd like to highlight that we have not reported our balance sheet for the quarter gone by. So we have not given any updates on the inventory days in this quarter.

Yes. I was asking more about financial year ending 2024. So the inventory day is 262 and the preceding year, the inventory day was 142. So I was asking about that.

Okay. So as you have seen through the quarter gone by, that is 31st March 2024, there were issues related to logistics that were not just faced by us as a company, but also by the entire industry. And what it led to is that Red Sea crisis had increased the overall transit time by not just days, but between 2 to 3 weeks for us to ship our products to any other target end customer -- end customer country. As a result, we, as a company, decided that we will be maintaining higher inventories of raw materials to ensure continuous supply of our feedstock as well as higher inventories of finished goods to enable quick dispatches because there were two factors over here. We did not want to be in a situation that we run out of raw materials. At the same time, as and when there is logistic availability, we are there with the material ready to ship it out to the customers. And that's the reason why on an overall level, we've seen an increase in inventory days. But as logistic delays reside, which we expect would happen over the next few quarters, we will also restrategize and bring down our overall inventory days.

Yes. So can we expect the inventory days to go down to FY '23 levels?

Yes. I cannot put a time line to it. But like you have rightly pointed out, in FY '23, we had inventory days of close to 3 months. Our assumption is more from the basis of what we are seeing in global supply chain from a shipping point of view. As that eases, this automatically would ease the pressure on inventory holding of companies of our customers as well as us.

Okay. Understood. And my next question is regarding our utilization in barium segment. So optically, it looks quite a bit lower. So is there any specific reason for that?

So our capacities in Vishnu Barium was 90,000 tonnes as of 31st March, and it continues to remain at 90,000 tonnes. And we have launched a product that is precipitated barium sulfate that is operating at close to about 40% utilization right now. And as we go through the quarters, we expect to end the year at close to about 70%, 75% of utilization in precipitated barium sulfate, which will overall bring the utilization levels to about 70%.

Okay. Understood. And you mentioned that we have plans to increase our margin towards the range of 20%. Can you mention some measures which can lead us to go towards that range?

Yes. There are a couple of things that we are working at a group level. One is that we have done a lot of process and product level improvements to bring down our feedstock consumed to produce every kg of finished good. And that has helped us, especially in the premium chemical vertical to reduce our overall consumption of key feedstock by close to about 7% to 10% in different raw materials. Second, we have -- 2 years ago, we launched our backward integration project in Visakhapatnam that helps us reduce our overall dependency on one of our critical raw materials that is sodium carbonate or soda ash. Starting from about 40% utilization rates. Today, soda ash is a major contributor to our overall profitability in our stand-alone business. So it gives us not just security, but it also reduces our overall dependency on external procurement of a key raw material. The third thing that we are looking at is basically to expand our portfolio of products in both the verticals, that is chromium chemicals and barium chemicals, which increases our ability to be more flexible in our product mix and to sell depending on where the demand is coming from. And these are the three major reasons why we are seeing an improvement in the last couple of years. And this will also be the reason why we will continue to invest in forward as well as backward project -- backward integration projects that will help us continuously improve our top line and also sustain and improve our gross margins, thus enabling us to reach to an EBITDA margin of 20-odd percent.

Yes, understood. Understood. And we have increased our fixed assets by INR 200 crores. So is this the backward integration that we are talking about?

So as of 31st March, we have had a total gross block of about INR 947 crores compared to about INR 735 crores gross block in FY '23. Partially, this has been because of our acquisition that we made last year in our subsidiary company, where we acquired a backward integration project. And at the same time, we invested close to about INR 45 crores as a replacement CapEx in our Chromium chemicals vertical that led to an increase of overall gross block.

Our next question comes from Prateek Chaudhary from Saamarthya Capital.

I think there a significant margin difference realization and margin difference between what you sell in India and internationally and what you would eventually sell in markets -- premium markets like U.S.

Yes. Good afternoon. Thank you for your question. The business model of our company does not rely on one market for its margin and other markets for its turnover. It's a pretty balanced mix of the product being in demand in big geography. So there are certain products in our portfolio, which are more in demand in India compared to global markets. And it helps us -- it helps us better plan and also recover our collections faster when we sell more in India. But let's say, in comparison, the export market typically gives us a premium of 3% to 5% for different products in our entire finished portfolio. But at the same time, we also have to look at a longer waiting period of close to about 45 to 60 days to recover the entire sales in terms of collections. So it's a pretty balanced mix. In certain territories, we see more demand of products in India. And in certain territories, certain product mixes, we see more demand in international markets. So that's the reason why we sell different products in different territories and not necessarily to attain a better margin profile from a particular market.

Currently, your U.S. sales are negligible, right?

From U.S.A.?

Currently, are your U.S. sales negligible?

At a consolidated level, U.S.A. is close to about 4%, 4.5% of our turnover. This was in the range of 1%, 1.5% 3 years ago, which has increased by nearly 300 basis points in the last 3 years compared to FY '21.

Does this market offer you any different [indiscernible] as far as -- I mean the working capital and the margins are concerned. Is this market any different or it's largely the same?

I request you to repeat your question. Your voice is not clear.

Is it better now?

Yes.

Yes. I was asking that if the percentage revenue coming from U.S. increases from, say, 5% to 10%, does this specific market offer any significant advantages over others or other markets?

It's a very good observation. If I have to talk about export markets, I think we look at U.S.A. not just from a premium point of view, but also from a longevity from a relationship point of view. And it's a well-known fact that after Japan, if there is one country in the world that gives more emphasis to relationship and also gives a value for your product on a higher scale, it's U.S.A. So, yes, we have benefited by expanding more in U.S.A. in the last few years. And we believe that we have the required product profile to further expand in U.S.A.

U.S. contribution reaching in 2 to 3 years?

It's very hard to put a number on that, but it would be significantly more than the current 4%, 4.5%. We expect it to be upwards of 5%, but still, it's something that we have to work on as a company once we complete looking at the numbers from different territories across the world.

And is U.S. largely a market catered to by their domestic manufacturers? Or do they also significantly rely on imports?

So in U.S.A., on the chromium chemicals, just like Vishnu is one of the largest players in India, there is already a player in U.S.A. that is catered by a domestic manufacturer. And that is one of the significant reasons why chromium chemicals are domestically procured by U.S.A. rather than importing. On the barium side, we have done a lot of work. And now we are one of the largest suppliers of barium chemicals in U.S.A. And in a few quarters to go, we are quite optimistic of increasing our market share in barium chemicals in U.S.A.

Okay. And just sir, one last direct question. What's the price difference that you charge globally versus what that competitor charges in U.S.

It's a good question. So there's quite a good amount of competitiveness that we bring to the table. And it's not just about being competing at the cost of our gross margins because at the same time, we also know that we are one of the most efficient producers and one of the lowest cost producers of chromium and barium chemicals globally. We leverage that to gain certain kind of market share in the territories that we want to penetrate in, but not at a huge discount to the existing price because price sometimes is a camouflage. It can be looked as a great achievement over a period of short term. But in the long term, U.S.A. market is open to those players like us, like who have improved their entire portfolio in terms of product quality in terms of customer support, packaging, logistics. So these are more driving factors instead of pricing just being one of them. So it's an important factor, but comes with the package of all the other things also in comparable to the existing suppliers that they have relationship with.

Sir, I would just, in the end, request you to put a number to it, what the U.S. price as a percentage of your price is how much higher to your international average price?

The U.S. price is close to about 8% higher compared to our prices that we sell to other markets, 8% to 9% higher.

Our next question comes from Srihari from P.C.S Securities.

Yes, I had one question basically on the Chromium side. You are projecting 50% to 60% growth in volumes over 2, 3 years. But I see that your capacity would be going up by around 25%. So can you please explain this [indiscernible]?

Good afternoon, Mr. Srihari. Yes, right now, we have not invested -- completely invested in completing these capacities. We already have projects in pipeline, which are -- which require more capital allocation rather than investing in new product lines. But as we can see, we have -- we are already running our capacities in excess of 85%. So in the next few years, yes, there will be a significant investment in Chromium chemicals to further expand our market share, both at the global level as well as to cater to Indian growing markets.

So you mean to say the capacity will also increase to a similar extent, around 50%?

I'm sorry, but your voice was not clear. I request you to repeat your question.

Yes. I was asking was, do you expect -- I mean, will you be adding capacity also to the extent of around 50%?

Yes. Over a period of next 2 years, we have a plan to increase our capacity from 80,000 tonnes on an annual basis to close to about 1 lakh tonnes. So that comes to about an increase of 25%.

25%. Yes. So that's what I'm asking. The volume is set to go up by 25%, but you're projecting a 50% to 60% growth in our overall global market share.

That comes with a blend of different products within our portfolio. So while our sodium dichromate capacities will increase by nearly 25% over the next 2 years, approximately, we will also see an increase of other value-added products because we are producing today nearly about 90% of global products in the chromium chemicals chain. But all products do not have the same margin profile and the same realization. So as we increase our sodium dichromate capacity, we were already investing in further increasing the capacities of our derivatives such as chromic acid, chrome oxide green. So that will automatically increase our top line from the vertical from the stand-alone P&L point of view, thus giving us a better market share at a global level.

So I mean, if I were to understand this correctly, then over the next 2 to 3 years, what is the effective growth in average realization that you expect?

Average realization is a factor of raw material prices, freight and how the end market is working. So here, when we say end market, it can be both domestic market and export market. So whenever there is a change in these three factors, it eventually decides our realization or average realization per kg. How we clearly work out is our metrics on an EBITDA level at EBITDA margin level. With our fixed costs being nearly constant, our improvements help us increase our gross margins and that gives the entire benefit to the EBITDA.

I mean all I'm asking is, I mean, basically, you are forecasting a 25% volume growth, but around a 50% growth in top line. So is that the right understanding?

We have not given any guidance on the top line or any increase in top line.

No, but you said that...

As a company we have not given any guidance on the top line or any increase in top line.

But you said that you expect your global market share to go up from 8% to 12% to 13%.

Correct. Yes.

So that implies to 50% to 60% growth?

That implies to 50% to 60% growth from a global market share point of view. But here, we are looking at that number of 12-odd percent growth from a volume point of view. Now let's say, Sisecam, which is one of the largest companies in Chromium chemicals, which is based in Turkey, they have close to about 105,000 tonnes of sodium bromate as a capacity, right? And they have a market share of close to about 14%, 14.5% at a global scale and our volume market share. With Vishnu being at about 80,000 tonnes growing to about 1 lakh tonnes, it would automatically catapult our entire market share to about 12-odd percent.

Our next question comes from Agam Sharaj an Individual Investor.

Sir, I joined in the call late, so I don't know whether you have spoken. But a quick question. I think on the barium side, we're also working on a new products. So can you share any details on it?

We have been working on new products, but we'll be able to speak about this only once we detail out the plan, and that is expected to be announced to the market only after the Q2 results.

Sorry. After?

After second quarter results for the financial year.

[indiscernible] Will come out.

Yes, we will come out with a detailed plan on the CapEx and the areas of expenditures.

Okay. So a follow-up to that, so for all the new CapEx plans on the barium and the chromium side, any funding should be doing it or will be through all internal accruals.

We have no plans to raise any equity. We are quite healthy in terms of our balance sheet as well as debt position. So with our debt-to-equity being less than 0.5x and our internal accruals significantly improving, we don't necessarily see any opportunities to raise equity to fund our CapEx plans.

Okay. And in terms of your future plan on the Chromium side, can you more talk on the chrome metal and its defense applications and all?

We'd like to first go in cases. It's very important that we understand the entire supply chain point of view that chrome metal is a derivative, of a derivative that we are manufacturing. So right now, we are actually supplying to companies globally who are manufacturers of chrome metal. So for us, venturing into this product is a natural forward integration. But for that, we also need to expand our capacities in sodium dichromate, followed by expanding our capacities in chrome oxide green. And then we can commission our projects and plans around chrome metal. It's a very exciting product. It's an import substitute, and it has a very, very good future from both Indian consumption as well as global consumption. From a company point of view, we are also quite upbeat about the opportunities that chrome metal as a product provides. But for us to move forward on this, it's very important that we first complete our expansion on sodium dichromate and the related derivatives.

So that will be a part of our plan on anything for the next couple of years or not that soon?

It is still part of our plans. But for us to give a concrete outlook on the expansion in chrome metal, we will first start with giving an expansion plan related to sodium dichromate and chrome oxide green, which will be followed by chrome metal.

Okay. And that will be majorly on the defense side, right, for the use case base?

From a use case point of view, chrome metal finds its maximum use from the aerospace industry globally.

We have a follow-up question from Rohan Patil from Turtle Capital.

I just had -- I just wanted to know that with current capacity in our chromium as well as in barium, what kind of top line we can achieve at optimum utilization of capacity, if you can give us a broad idea?

So in Chromium chemicals, we have 80,000 tonnes of capacity. And the optimum top line that we can achieve from this is close to about -- in this range of INR 1,100 crores to INR 1,250 crores. That is depending on multiple factors, like I said, because realization is a factor of how export markets and domestic markets together are performing, cost of raw materials as well as freight. So in FY '23, with the same capacity, we achieved close to about INR 1,222 crores of operating revenues. In FY '24, we achieved about INR 1,011 crores. And in the quarter gone by, we have seen increase in realizations per kg in chromium chemicals. So this will be the range, at least from what we have historically experienced of what we can think about is a range in terms of optimum capacity and revenues that we can achieve in stand-alone business. And from a barium business, it will all be factored on two things. One is our capacity utilization increase through the year that we will see in barium sulfate, which has been a relatively new product for us. And we have seen very good market traction over there, both in India as well as exports. We see this traction to further fructify into better revenues and margins for us through the year as we go by. At the optimum level, we are looking at revenues of close to about INR 300 crores to INR 400 crores from our barium vertical alone.

Okay. And just to clarify, when you said we are operating 50% in barium [indiscernible] Vishnu Barium or you were just mentioning the barium sulfate.

Vishnu Barium Private Limited is the name of our subsidiary that produces barium chemicals.

That is operating at 50%, the barium segment as a whole.

Yes, it's operating at in the range of 50% to 60%. We actually don't give out the exact capacity utilization, but that's a broad range.

Okay. And in last call, if I can reiterate, you said that at a consol level, we might be growing our volumes by 30% to 35%. So are we on that trajectory of growing volumes?

Yes, we are in this trajectory, especially because of our growth that we are seeing in our barium capacities. So what we have achieved in production and sales in Q1 FY '25, it's nearly about 20% higher than what we had achieved exactly a year ago in Q1 FY '24. So with this traction and further momentum that we are seeing, we feel that overall, it should be a much higher volume-driven as well as value-driven P&L for our Vishnu Barium business.

We have a follow-up question from Aditya Chheda from InCred Asset Management.

An would you want to share a CapEx guidance number for 2026? And if there are any projects if you have a pecking order of what projects you want to embark on in the near term? Yes, that's my only question.

Good afternoon once again. Very important question on the areas where we are investing and the quantum that we are going to invest. As outlined in the earlier conference call, we are still working on the CapEx plan for the entire fiscal and the fiscal to come, that is FY '26. Here, it's very difficult for us to give a number right now. And we are already working on a few projects and few opportunities, both at an organic level and exploring certain inorganic opportunities. So we will keep you posted once we have more clarity on that. From a management point of view, we are also equally motivated to share the numbers with you. And it will be our efforts to share this CapEx plan with you at the end of our second quarter.

Due to time constraints, that will be the last question. Now I hand over the floor to the management for closing comments.

In conclusion, I would firstly like to thank everyone for your time today. Our company, Vishnu Chemicals Limited, remains firm in its commitment to optimizing our operations and investing strategically to ensure long-term success for all the stakeholders and the shareholders of the company. We sincerely appreciate your continued support as we work together towards a future of sustainable growth. For all the participants and the shareholders who are on this call and are going to read the transcript, if you have any further questions, please feel to reach out to us on [email protected]. Thank you, and have a good day.

Thank you so much, sir. Ladies and gentlemen, this concludes your conference call. Thank you for joining us, and you may all disconnect your lines now.