Ladies and gentlemen, good day, and welcome to the Navin Fluorine International Limited Q2 and First Half FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhavya Shah from Orient Capital. Thank you, and over to you, sir. Thank you, Steve. Welcome to the Q2 and First Half FY 2025 earnings conference call. Today on this call, we have with us Mr. Vishad Mafatlal, Chairman, Mr. Nitin Kulkarni, Managing Director, and Mr. Anish Ganatra, Chief Financial Officer of Navin Fluorine International Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations as of today. Actual results may differ materially. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Our detailed safe harbor statement is given on page number two of investor presentation of the company, which has been uploaded on the stock exchange and company website. With this, I now hand over the call to Mr. Vishad Mafatlal for his opening remarks. Over to you, sir. Ladies and gentlemen, I would like to welcome you all to Q2 and first half FY 2025 earnings call. I'm joined by our MD, Nitin Kulkarni, our CFO, Anish Bhai, and Payal from Orient Capital, our investor relations advisor. I hope everyone got an opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchange as well as our company's website. I am pleased to begin by announcing that the board has decided to declare an interim dividend of INR 5 per share. At Navin Fluorine, we are committed to operating sustainably and responsibly. This commitment is reflected in our corporate culture and strategic approach. In the last quarter, we released the second edition of Navin Fluorine Sustainability Report, where we continue our journey towards sustainable excellence. Building upon the foundation laid in our inaugural report, we are proud to present our progress, achievements, and ongoing initiatives in advancing sustainability across our operations. I would request all of you to refer to our sustainability report uploaded on our website. As we move forward, I want to take this opportunity to share a broader perspective on our strategic direction. As we have mentioned, we remain committed to operational excellence, and this does not only mean optimizing our processes, but also embracing innovation, enhancing productivity, and ensuring that every facet of our operations remains efficient and resilient. In line with our commitment, we are focused on maintaining disciplined execution with highest standards of safety, compliance, reliability, and efficiency. Additionally, we continue to focus on strengthening partnerships and building scalable platforms. Both Nitin and I have met our key customers across geographies in the last few months, and we will continue the engagement to deepen our partnerships. Collaboration is key to unlocking new growth opportunities, and by nurturing these relationships, we aim to create long-term value for all our stakeholders. In addition to this, a robust financial framework underpins our growth. Our Net Debt to Equity remains below our guidance range of 0.5x. In the last few quarters, we have made efforts in optimizing the working capital cycle, ensuring robust operating cash flows. We remain focused on maintaining financial discipline, ensuring that our resources are allocated strategically, aligned with our long-term vision. We are confident about the future and the opportunities it holds. Thank you once again for your continued support. With that, let me hand over to Nitin to share our operating and business performance during the quarter. Thank you, Vishad for update, and good evening, everyone, and thank you for joining us on the earnings call. We appreciate your time and continued support. I want to start by recognizing that our relationships with strategic partners are growing stronger and deeper, reflecting the collaborative approach we have developed over time. As we navigate the evolving market landscape, our key priorities remain clear: maximizing capacity utilization, improving productivity, and driving efficiencies across businesses. These priorities will guide us as we commission new projects and develop future growth opportunities. Now, let me walk you through the performance of our key business verticals, starting with our high-performance product, that is HPP business. During the second quarter of FY 2025, the HPP business achieved 23% growth, with revenue increasing from INR 238 crore in Q2 FY 2024 to INR 293 crore in Q2 FY 2025. In the last quarter, all HPP assets continued to operate at optimal level. The growth is mainly attributed to higher R32 sales and better realization for R22. Additionally, the expansion of R32 capacity with a CapEx of INR 84 crore is proceeding as scheduled, and is expected to be completed by February 2025. Our interactions with existing and new customers giving us confidence on offtake of the upcoming capacities as these are operational. Our AHF project, which involves an investment of INR 450 crore, is on track, and we anticipate commissioning by the end of FY 2025 or early FY 2026. As we move forward to Specialty Chemicals business, we experienced a decline in revenue for this business with a degrowth of 15% from INR 185 crore in quarter two, FY 2024, to INR 158 crore in quarter two, FY 2025. Sales in this sector were affected by the current global situation, leading to cautious demand behaviors amidst continued competitive pressure being witnessed globally. Our strong customer relationship and strategy to drive value for our customers has started to show positive results as we speak. There is strong visibility to order pipeline for Dahej and Surat assets that will drive improved capacity utilization and growth from Q3 onwards. We are continuing to make progress in product innovation within this vertical, too. Recently, we introduced a new molecule at our Surat facility, and we are on track to launch two additional molecules in the upcoming quarter. On the capital expenditure front, our upcoming Agro Specialty plant at Dahej, with a planned CapEx of INR 540 crore, is under commissioning jointly with our customer to ensure a safe and efficient startup, and commence commercial production by November 2024. Simultaneously, our Surat project, with an outlay of INR 30 crore, is commissioned, and the first dispatch will be in November 2024. Moving into the CDMO business. CDMO revenue has increased from INR 48 crore in quarter two, FY 2024, to INR 68 crore in quarter two, FY 2025, reflecting a growth of 41% year-on-year. We have a strong order visibility with firm orders for the second half of FY 2025. Additionally, our strategic focus on late-stage and commercial molecules continues to yield positive results, with the business continuing to witness higher levels of customer inquiries than previously. We are encouraged by the traction with our European CDMO partner and the deepening of our relationship with them. Customer projections are strong for FY 2026. We are additionally secured order for two new late-stage intermediates, which are scheduled for supply in Q4 of this year. Furthermore, we continue to make progress with our EU major and US major clients. For the EU major client, we have supplied quantity for process performance qualification for late-stage study, and for our US major client, we have received scale-up order for supplies in Q3 FY 2025. On the capital expenditure side, our cGMP 4 project is advancing well. Phase one, involving an outlay of INR 160 crore, is progressing as planned, and we aim to have it commissioned by end of quarter three, FY 2026. So in conclusion, our strategic initiatives, combined with continued investment in capacity expansion and product innovation, position us well to drive sustainable growth across all our business verticals. Thanks for your continued trust and support. We look forward to sharing more updates on our progress in coming quarters. Now I would like to hand over to Anish to brief you on financial performance. Over to you, Anish. Thank you, Nitin. Good evening, all, and I welcome you all once again to the earnings call. Moving on to the financial performance of the company in Q2 and first half FY 2025. Quarterly performance. We reported revenues of INR 519 crore in quarter two, FY 2025, an increase of 10% year-on-year, led by an increase in revenue from our HPP and CDMO businesses. Operating EBITDA for Q2 FY 2025 was approximately 107 crore, an increase of 9% year-on-year. Operating EBITDA margin stood at 20.7%, as against 20.8% in Q2 of FY 2024, and improving sequentially from 19.2% in Q1 of FY 2025, reflecting higher realizations in HPP, as also benefits from efficiencies secured within the businesses. Profit after tax in Q2 FY 2025 stood at 58.8 crores, as against 60.6 crores in Q2 FY 2024, and 51.2 crores in Q1 of FY 2025. Half-yearly performance. For first half FY 2025 on a consolidated basis, the company reported net operating revenue of INR 1,042 crores, as against INR 963 crores in first half FY24, reflecting a growth of 8%. Operating EBITDA stood at INR 208 crores, as against INR 213 crores in first half FY 2024, down by 2%. Operating EBITDA margin for H1 stood at 19.9%, as against 22.1% in the same period last year. Profit after tax in first half FY 2025 stood at 110 crores, as against 122.1 crore in first half FY 2024, a decrease of 10%. We continue to ensure a tight financial framework while driving growth. As at thirtieth September, our net debt to equity stands at 0.39, well within our guidance range of 0.5, and reflects the strength of our balance sheet. Operating net working capital days at the end of thirtieth September is approximately 104 days of sales. That's all from my side. We can now open up the lines for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vivek Rajamani from Morgan Stanley. Please go ahead. Hi, sir. Thank you so much for the presentation. Two questions from me. Firstly, on the Specialty Chemicals, just wanted to understand, you know, what gives us the confidence of the visibility or the improved visibility for the second half, given that, you know, we have seen some difference in the past. So could you just give some color in terms of what's changed in terms of the conversations that are happening with your customers? So, you know, to give you the feedback, you know, these are, you know, the firm numbers, because we have entered, you know, into the supply understanding, you know, for most of, you know, these molecules, you know, which we are talking, you know, for not only quarter three, quarter four, you know, but, you know, for the calendar year 2025. So, you know, based on, you know, our existing capacities, you know, we manage, you know, to speak and, you know, entered into the understanding with the customers, and that has helped us, you know, to address our three products, you know, which are, you know, one of the, I would say, high volume, high value products, to enter into, you know, the for, you know, the supplies, including, you know, quarter three, quarter four, you know, for, and, you know, the balance of, you know, the calendar 2025. So what we are talking over here is not, you know, any assumptions, you know, but based on, you know, the firm order which we have received. Sure, sir. And just a clarification on this. In terms of these orders, are these multi-year orders or... Because you're saying you have the visibility even in calendar 2025, correct? Correct. So, you know, there is a basket of products where, you know, we have received, you know, the visibility along with, you know, the POs till calendar year 2025, and based on that, you know, we are, you know, giving the feedback to you. Just, just to add, I mean, I'm just complementing what Nitin said there, Vivek. If you look at what Nitin mentioned, it's covering not only Surat assets, but also the Dahej assets. You know, we talk of the MPP and the dedicated agro plant. We have line of visibility to their full order book, not just for the remainder of this year, but going into next year. Sure, sir. That's great to hear. And the second question was on CDMO. I know it's difficult to give a clear guidance number over here, but given that you're making traction with both your European client and the US client, and obviously you have some two new molecules, could you just give us a sense of what is the trajectory we should expect for the second half of this year, as well as going into fiscal 2026, in terms of how these will ramp up? So, you know, again, on the CDMO front, Vivek, the order book is again based on the discussions that Nitin and Vishad have had with the customer. And again, you know, we should look to at least a like for like Q3, but a very strong Q4, and going forward, even stronger. Sure. So that's super helpful. I'll rejoin the queue. Thank you so much, and all the very best. Thank you. The next question is from the line of Sanjesh Jain from ICICI Securities. Please go ahead. Yeah. Hi, good evening. Thanks for taking my question. I got three questions from all the three segments. First, on the CDMO, if I remove the domestic, which I believe is a supply for the European client, the rest of the business doesn't look very exciting at under thirty crores of revenue. What's happening on that initial stage? Has that completely been defocused? How are we looking at that part of the business? A connected question is that now we have multiple order book, one, to the supply European client, two, late stage product to be supplied in Q3, Q4, one scale-up project for a U.S. client. So it appears to be jumbled up. Do we have capacity to meet all these orders requirement on time? So that's on the CDMO. On the specialty, domestic suddenly has shown a sharp improvement quarter- on- quarter. I thought we were defocusing the domestic pharma part of business and largely focusing on the agrochemical and the fine side of the business. What has driven this domestic revenue growth in the specialty part of it? And the third question on HPP, Nitin, I guess you mentioned in your opening remark that we have reached optimal capacity. Is it fair to assume that until the new capacity on R22 come, it's only pricing which will drive the incremental growth in the HPP? On Sandesh, thanks for your question, Sandesh. On CDMO, again, your question about capacity and to look at whether we can meet the orders. I think again, you know, this we signed the entire project of cGMP 4 coming in alongside considering what capacities are needed, one. Second, on the orders other than the, you know, the large CDMO, European CDMO, your question around the fact that, you know, are you de-emphasizing early stage? So the answer to that is no. We're not de-emphasizing, but obviously the commercial molecules will start to occupy greater pie because their volume is large, right? I mean, that's the very nature, that's the precise reason why we are going into that business, right? And so it's not de-emphasizing, but it's balancing. And like we've always said, that you will see a proportion of 60% or coming from commercial going forward. But remember, the pie size grows bigger, not smaller. So that, that's what will come in over there. On the specialty side, the domestic revenue, some of it is very opportunistic. We saw an opportunity to do some of the old molecules that we were doing in the pharma, and we picked it up in the current market scenario. So that is there. Plus, also, we supply to local customers on behalf of large global players. So some of that also plays into the domestic pie. I wouldn't read over there any different message because as Nitin has mentioned before, you know, on the Spec Chem side, both Surat and Dahej, we are witnessing and we are seeing a very strong order book in hand in the Q3 and Q4. Just to add to that, now, means, Sandesh, to be very frank with you, I, you know, failed to pick up, you know, that, well, how you have arrived, you know, that only in a domestic, you know, space has, you know, given us the, you know, the betterment. Because, basically, most of you know, the Spec Chem business, I think you know the major portion is for the export as well as, you know, the products, you know, which we supply, you know, in the domestic market, those are also, you know, as a part of the supply chain. You know, so there are, you know, couple of products, you know, so which are, you know, in the supply chain, which, you know, normally, you know, gets exported. So this is everything, you know, is triggered off, you know, more than 70% of the business, you know, into the agro space only, and that too also, you know, with the innovators. Pharma, there is a very small, you know, portion of, you know, this particular, revenue, that too also of, you know, the one of the traditional molecules which, you know, customer requested us, you know, to restart, you know, the operations. Absolutely, as far as you know, the Spec Chem business is concerned, the growth which we have observed in Q2 or, you know, whatever, you know, we have done and what we are, talking, you know, in Q3, Q4 and forward, is based on, you know, the existing global agrochemical customers, which are already working with us and to whom we are giving, you know, these products. As far as your point of, you know, the R22 expansion concern, is it about 22 or 32? No. So your point... So, Sandesh, please repeat your question, if you don't mind. Yeah. HPP. HPP. I said that we have optimized the capacity utilization on most of the product, is what Nitin said in his opening remark. That means until the new R32 capacity come in, it is only pricing which can drive the growth in that sector. No, no. So, new R32 is absolutely a new capacity that will come in. Also, as we mentioned before, remember on the HFO project, we've always said that what we are doing today is we've got the plant running to optimal capacity. That's still meeting about 80% of the demand. So there is growth over there, too, right? Correct. So, there is stuff happening on that front. Plus, even within the R32, there are options to build, which we are working on, to debottleneck and get greater capacities, but that's still work in progress. But- It will be pricing and volume growth. Exactly. Plus, we are, you know, putting up, you know, this R32 CapEx, you know, which you are already aware, you know, which is going to come, you know, in the Q4 of the FY 2025. Correct. So, based on, you know, the visibility, what we see with respect to volume and price, you know, definitely, you know, this is going to drive, you know, the future growth. Just one follow-up on all those answers. Anish, you said that cGMP4 will help us, but I was more asking for the second half of FY 2025, now we have to deliver so many HFO products. Do we have capacity from cGMP? So, Sanjay, again, these products are campaign-driven, so their quantities tend to be smaller. The commercial stage products that we talked about are actually study stage products, you know, and we clarified that even last time, right? Those are being worked, so those volumes will come in. There will be even more RFPs that we are receiving, as also Nitin mentioned in his commentary. So there is work that will carry on, but there is no concern on the capacity and the growth. If you remember what we've done in Q4 of FY 2023, if I remember, that number is significantly high just with the current base. So, as we are not really concerned on the capacity side there, of course, our idea, because of the continuous growth in the business that you're looking for, you will have a CDMO 4 that will largely, as we talked at the site visit, you know, phase one will get virtually dedicated to the European CDMO player. The other capacities will continue to fuel the growth for new pipeline coming in and, you know, also phase two of CDMO 4. That's clear. Thanks. Thanks, Nitin. Thanks, Anish Bhai, for answering all those. Thanks, Sanjay. Yeah, best of luck. Thank you. Thank you. The next question is from the line of Madhav Marda from Fidelity. Please go ahead. Hi, good evening. I have two questions. Firstly, on the Specialty Chemical business, when we see that we have strong visibility into second half of FY 2025, does that mean that, if you compare to the last year of the second half, we are looking at year-over-year growth coming back for us? Because first half has been obviously impacted by the industry-level challenges which everyone's facing. No, yes, indeed. Remember, we shared our way and approach in the Spec Chem business, and particularly, you know, both Nitin and Vishad have been very clear how we need to respond to the current market scenario, and that has started to play and show success, so I think you should expect to see a year-on-year growth coming through. This is what we are talking is based on, you know, the POs and the firm orders which we have in hand. Okay. So second half, Specialty Chemicals you're saying can grow over last year's product. Okay. Yes. And, my second question was on the CDMO business. Given that, you know, we are addressing pipeline molecules of pharma customers, innovator customers, would it- just a suggestion, could we start giving just in the presentation how many molecules we have in different phases, like phase one, phase two, phase three, and how many are in, you know, process of registration, just as a disclosure, so it just becomes easier for us to track it every quarter? So, so I again, you know, point taken. Yeah, point taken. Yeah. So like, total number of molecules that you are addressing and just the phase-wise, spread that will be- We don't see typically the number of molecules. I mean, we've shared a couple of key material ones. If you remember, Madhav, when we spoke, when we started sharing this, the idea was, and the intent was to show how our strategy is working across the globe. Therefore, we shared the geographies and the most material molecules that we think today are potential molecules, right? There are several others we are working for, but each of these are different chemistries. You know, we don't count or monitor the business in that sense, you know, to look at the number of molecules in different stages, et cetera. Our bigger thing that we are focused on is ensuring that the pie grows and the proportion of the pie starts to look more like 60/40, 65/35, you know, between the- No, no. No, no, No, no, I understand that. I'm just saying that given that this is a CRAMS or a CDMO business for innovative pharma customers, that's how the peers disclose in India, if you look at some of the other names. So just helpful for us to maybe make a comparison. That's all. We'll think about it. Point taken. Point taken. But we, that's not how we internally look at. So, but point taken. Okay, thank you very much. Thanks. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Hello, Mr. Abhijit, your line has been unmuted. Please go ahead with your question. Yeah, yeah. Good evening. I hope I'm audible. Yeah. Okay. Thank you. So just one clarification first, regarding the CDMO outlook for the second half. Anish, if I heard you correctly, based on the order book, we expect at least a flattish third quarter year- over- year, followed by a very strong fourth quarter, and then even stronger in FY 2026. I hope I got that correctly. Yeah, I think that's a fair take, Abhijit. Okay, got it. And both for CDMO for, say, fiscal 2026, as well as Specialty Chemicals, given the kind of order visibility you have, would you be able to help us with some sort of, you know, percentage growth guidance for fiscal 2026? So we don't give guidance. I've given you directionally, but unfortunately, I won't be able to give you guidance. Okay. Then just on the 540 crore project, how much? The timeline seems to have slipped a little bit. We are now talking about November. You know, it does seem to have slipped since it was previously envisaged, I think, for December last year. So what exactly is the issue there? Are there technical problems, or is it just market environment? And then how much revenue can we expect from it in fiscal 2025, given that we only have four or five months now left to deliver? So, this is Nitin. So, you know, just to give you the, you know, answer about the market or, you know, the, PO, you know, absolutely, you know, there is no problem, and we have, you know, the, existing, you know, PO in hand, you know, for, you know, the, customer, you know, with whom we are doing this project. And they are also partnering with us, you know, for the technology support. So this is, one of the most complex, and, you know, the high-end technology, and, there are multiple, you know, touchpoints, you know, to really bring it, you know, to the optimization level and, you know, to reach, you know, to the, process efficiency. So far, everything has progressed quite well. Of course, you know, as you also know, during the startups, you know, the where we faced, you know, problem, you know, during Orchid time, similar type of, you know, challenges, which we are facing, which we have addressed, you know, quite well, and everything is, you know, now moving into the right direction. So there are, you know, some, as you rightly said, delays, but those delays are not, you know, where we are stuck somewhere or, you know, we are clueless. Absolutely, you know, we are bang on, you know, as far as, you know, the progress of, you know, the, I will say, stabilization concerned. As you said, that you know, November is the month, you know, when we will see, you know, that we have started, you know, dispatching and producing, you know, this product. Got it, Nitinji. Just last question, if I may, before I get back in the queue. Mm-hmm. The one is for the non-dedicated portion of that contract. Will the margin profile be, you know, materially sort of more dilutive compared to the dedicated portion? What sort of margin profile should we work with? Abhijit, again, you know, for the non-dedicated portion, when it comes in, we will have to remain competitive to the market, you know? Mm-hmm. and whatever that is, we will remain competitive. I mean, I think the work that the team is doing here is absolutely focusing on making sure that the plant comes up efficiently and reliably. And part of the reason why the effort is being put on making sure that it comes in in the right way, is to ensure the reliability remains high, and therefore, we are able to have, you know, good norms, good yields, good outcomes, which will help us also to remain- Competitive. Yeah, it's true for all seasons, right? I mean, no matter what the market is, ultimately, if you're the last man standing, then you are likely to remain profitable, no matter what. So that's our intent, yeah? Absolutely. Okay, so got it. The at the Surat INR 30 crore CapEx, what would the revenue potential from that be? Just, that's the last thing from me. One second, give me one second. So the- Yeah. The peak revenue is about INR 50-odd crore. We started the campaigns in this year from the product, and it's starting in this quarter itself, actually. We slowly ramp it up over the next sort of one and a half year or so. So, just to add to what Abhijit said, you know, so this already, you know, project commissioning we have started, you know, the operation, and from next month, you know, you will find, you know, the delivery. And for this particular CapEx and the product, we again, you know, like, you know, to my other comment, we got, you know, the firm PO in hand, you know, for the next year, you know, complete. Also, Abhijit, remember, this is not a dedicated plan, so it's an extra capability we've introduced in Surat. So how we optimize and run that asset will also depend on other competing push for that capacity, yeah? Understood. Thank you so much, sir. All the best. Thank you. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. First question on, you know, the customer's feedback and your, you know, comment on the overall order book, especially for the Specialty C hemical business. This order book visibility, which is both from Q3, Q4, as well as for the next financial year, is it largely led by the new products that you are doing with the global innovators? Or the older product portfolio and seeing some recovery in terms of demand there. So Ankur, this is basically mix of both, and rather I will say, you know, the old molecules as well as, you know, I mean, we are talking of, you know, all three old molecules. You know, order visibility is there, or rather, you know, it is better, you know, than, you know, what we have seen, you know, in the current financial year. And, you know, it is reciprocated, you know, in the orders or, you know, in the contracts also. So it is basically what we are talking is, you know, you can say 50-50% blend, you know, between the new products, which, you know, we have launched, you know, in last six to eight months, plus, you know, what, you know, we are talking about this INR 30 crore project, plus, you know, the traditional molecules for which, you know, we have already the capacities in hand. I think the thing to bear in mind there, Ankur, is also the fact that we've said about Dahej assets, which you should think of, you know, about. So this includes both Surat and Dahej, but specifically for Dahej, you should think of the MPP and the dedicated agro. And in both those cases, you have the PAT numbers, right? Already with you. So when we are talking of a strong order book, we are virtually saying of how much increase and, you know, good utilization of that capacity will start to come through. So it's a combination of everything. ... Sure, sure, Anish, that's helpful there. Second bit on the CDMO demand, which you had highlighted. You know, so if I just verifying there, while the phase one of the new cGMP 4 will be dedicated for the earlier contract that we have, in between the new product that we launch, it will be more on campaign based. In the longer term, these products will get probably used or will be getting manufactured in cGMP 4 phase two. So that we have- We make sure on where they will eventually scale up, but as you know, the pipeline for registration of projects, et cetera, is quite elongated in this business, right? So where we are doing is these are late stage molecules. They are still in study phase, and the idea is to continuously build our pipeline. So while we are growing the, and growing and deepening our relationship with European CDMO, some of these promising molecules also we hope, and this is just, you know, at this stage, all I can say, you know, how the this profile in that business is, right? So the idea here is that one of these will come in and like we talked at, at the site visit also, the fact that these are late stage and they are all innovative, they are all blockbusters. Not necessarily all will come, one could come, not necessarily even one could come. We don't know that yet today. But the idea is that it does take time for them to get to the scale-up position, you know? And if you remember, even for the European CDMO molecule, we had said that the work actually on that had started two years ago, if you remember. So, there is enough sort of headroom available for us to continue doing what we are doing in the capacities we have. You know, one, two, and three is also a good size capacity. You know, the potential for that is also quite good. Phase one, when we say dedicated, we think we are actually dedicating in terms of allocating it to Fermion. And, you know, you, the, and then phase two comes in when some of these mature, yeah? Sure, Anish. And, and just last one, if I may. You know, we did mention our focus to gain volume, bring in efficiencies and sort of, you know, scale up the capacity utilization across all plants. And at the same time, you know, our guidance on the margins front, guidance or let's say directionally, we are looking at a 25% sort of a margin outlook. Will this, you know, the bridge over here, will it largely be because of the shift in product mix, revenue mix, more skewed towards specialty and CDMO? Or there is some bit of pricing element uptick as well that we are, you know, building in, in our, broad assumptions. It's a basket of things. See, where we are, we have said that, if you remember when we had hit, I think it was Q3 of last year when we did the 15% margin, we had talked of our journey from 15%-20%, 20%-25%, you know? I think we are well on track on that journey, and it will slowly and progressively get to that target number. Our intent is to get there in a sustainable manner, you know, that's the main thing. Sure. That's helpful, Anish. Thank you, and all the best. Thanks. Thanks. The next question is from the line of Anubhav Sahu from Macquarie Research. Please go ahead. Hello. Yeah, thanks for the opportunity. I have a couple of questions. So one is on European CDMO agreement, which, I remember back, the three-year supply agreement starting from calendar year 2025, which you also have mentioned that from Q4 2024 we would be starting supply of two intermediates. So these two intermediates which you have mentioned, are they the additional ones than the original three molecules we talked about? So does it change in terms of the number of molecules which we are getting to this point? So these two, two new ones are actually two new molecules, as the name suggests, you know, so that's what we intend to say. You're right on that. And the three-year agreement is renewable automatically. So, you know, you, we-- as we've said before, that this particular end stage molecule that, the drug that will come is patented all the way in most geographies till 2035 and beyond. Okay. Second part for this is the timeline of supply. I mean, you know, took this question earlier, but, but still just trying to understand that, because there would be a dedicated facility, cGMP, for this client, so is the supply is going to be more back-ended in some way? How do you think so? So remember, when I said dedicated facility, we call it dedicated because in our capacity allocation, we are stating that that particular capacity is required for something like this at its peak, at its peak, right? Before that, of course, you know, the clients are fungible. You know, we have got capability and flexibility to deliver that growth as it progresses to that peak, even from one, two, and three. So the sales will start. In fact, the sales have already been there. I mean, you know, I think someone on the call before referred to the supplies domestically for the same molecule, right? So that is already in the process. It's not like we've not done the dispatches under that contract. Okay. But the commercial one will start from Q4, this is what you mentioned? Sorry? Sorry. Sorry. The commercial supplies will start from Q4. Is that the case? No, no, the commercial supply for the European CDMO MSA is already started. Okay. It's already started. We have now firmer order positions, which I'm saying will show you the growth in Q4 and in the coming quarters. ...Okay, okay, okay. My last question is on the. I'm just trying to understand the demand-supply dynamics in specialty. So, just trying to have a perspective from you that which is the bigger factor, whether it is a moderation in demand or, you know, China dumping and other reasons, or is there still a case for channel inventory rationalization? Which of these three, which is the more concerning factor for us right now? Okay. So I, I think again, channel inventory in our view is like a dead horse. Yeah, there's too much beating going on on that. I think we have to recognize the fact that, and we, as we've said this before, you know, that, this market means that in a strategic relationship, you have to work closely with your partners. We were early to recognize that, and we have played that to our strength, you know? So as we talked to and, established our equations with the customers, we have agreed that, you know, we will remain part of their supply chain, work with them on delivering the, products. You know, and like I said, there will be a reduction in pricing, but the absolute EBITDA will be protected or increased because we've now got higher capacities that we are committing to them. Okay, that's okay. Yeah. Thanks a lot for your time. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer questions from all participants in the conference room, please limit your questions to two per participant. The next question is from the line of Dhara from ValueQuest. Please go ahead. Thank you for taking my question. I hope I'm audible. Yes. Yeah. Yeah, yeah. So my first question was on the subsidiary. So if I do consolidated minus standalone, your subsidiary has reported a 15% YOY decline on revenues. This is the subsidiary from where you're doing all the new projects. So if you can help us understand what is driving the 15% decline on the top line? Yeah. So again, Dhara, again, on the subsidiary, and this is what I was saying before, you know, the specialty business, we've seen a difficult time, you know, and obviously, you know, Q2 has seen that, you know, not all our capacities are utilized well. But that's exactly what we are talking about, that we were early to recognize that this would be the situation, and we've taken corrective actions which now are giving us line of sight into Q3 and beyond, for higher level of capacity utilization and the conversation we've just shared, you know, Nitin, myself, and Vishad. But these are all new projects that we have executed, the INR 195 crore CapEx, the dedicated project, the Honeywell project, everything sits here. So, if you could specifically call out, where the underperformance is? Honeywell project, as again we've said, is actually doing quite okay. You know, it's, we've said there's no problem there. The 80% is there. You know, I've talked about the 80% capacity over there, and that's not because where our issues are. Our issues on the plant are fully behind us. We have tested the plant to run at 100 or even higher 100. We have that in place, right? The Honeywell order book will increase as time goes by. We are already seeing interest rates being softened. You know, the industry on the construction side will boom. This is one of the end users of the product, so that will come in. On the Spec Chem side, it's market related, the market dynamics, and like I said before, we recognized it, and we responded to it, to come back out of it and come back out of it strongly. Sure. Thank you. The second question that I have is on the European CDMO contract. Sorry, I'm harping on this question again. But as I understand, the cGMP 4, the 160 crore CapEx will take care of the larger ramp-up of this project with European CDMO. But if you have to put a number to FY 2025 that you'll be doing in your existing cGMP 1, 2, 3, what sort of revenue potential? I won't put a number to it, but if you look at our, you know, in the cGMP or in this particular business, and when we've talked about the CapEx, we've talked of peak annual revenues at 2x of CapEx. So you should look at the peak annual revenue. That will come in over time, yeah? I'm not going to give a guidance of which year and when, but I've already, there is a guidance out there of $100 million by FY 2027. We're standing to it. Yeah? Okay, sure. Thank you so much. That's it from my side. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity. So first question is, one of the competitors has announced that they are planning new HFO capacity, in India. So what is our dialogue with Honeywell? As I think, earlier we were contemplating of debottlenecking the capacity and maybe subsequently, doubling the capacity for which we have kept the space at Dahej. So what is the current status, and what would be the roadmap for the same? Thank you. Rohit, again, you know, I will not be able to talk of the rationale of what the competitor may have announced. All I can tell you is that our conversations with Honeywell, with like any other strategic customers, are continuing, ongoing, and there is always opportunities that we are exploring to deepen. But, you know, at this stage, I can't talk about the debottlenecking or anything, because as these projects will come up, you know, we will sort of discuss with the customer and also, you know, once the internal commercials, et cetera, are clear, then we talk about it with the board. Once approved, then we come out with it. The other thing to remember also, you know, whether there's new capacity coming in for HFO, the market for this is always going to increase. It's not shrinking. So, you know, there's enough space for everyone in that. Sure, that's helpful. And the second question is, you just now mentioned that, for the CDMO, we still have the target of $100 million in FY 2027. So what could be the contours of the same, given that FY 2025 will be having, closer to, say, $40 million plus or minus, and we are contemplating almost 2.5x increase in next two years? Thank you. So, I mean, again, I think we've said a lot for you to do the math, because if the first phase of cGMP 4 at 160 is gonna give you 2x revenue, you know where that is coming from. And obviously, we've had track record of doing the base business at a certain level, you know? And like we said, there were certain molecules that have not come in in the past, will come in in the future. That optimism and that assurance is still remaining. Simultaneously, Nitin and the team are also working deeply to extend the reach of our relationship with the customers, both new customers and deeper. So there's a combination of things, including the ones that we've shared with you. Some of the molecules that we are working on in late stage, you know, late-stage molecules have a risk profile. That risk profile is relatively low compared to early stages, right? So some of them will work, you know. There's a portfolio effect that will play out on all of this. This is helpful. Thanks a lot, and all the best. Thank you. The next question is from the line of Reshma Jain from DSP Asset Managers. Please go ahead. Sorry to interrupt. The current participant has been disconnected. We'll move on to the next participant. It's from the line of Keyur Pandya from ICICI Prudential. Please go ahead. Thank you for the opportunity. Two questions. First, on the growth side, so FY 2025, now, since this INR 540 crore project is commissioned with some delay, so the growth in this Specialty C hemical would be driven by this INR 190 crore CapEx MPP? And if that is so, then if you could just talk about number of molecules or what kind of utility it is working at. And second, is it fair to assume that next year's growth would be largely driven by two key segments? I mean, one ramp-up of this INR 540 crore project, and second is CDMO. That is first question. Sorry, I lost you there. What did you say second was, Keyur? So one is, ramp-up of this INR 540 crore project, and second is CDMO for the next year as a- So I don't think that's correct. See, all our verticals, I mean, if you look at the growth we've done in HPP and the further growth potential that even exists in the base business, and I'm not even talking about new R32 that's coming in, right? So you've got new R32 that's coming in. You've got AHF that is gonna come in next year, so that will also start trickling into the revenue and the growth. So our pillars of growth are very strong in HPP. Spec Chem, I think we've already given you a good purview of what we see in Q3, Q4, and beyond, and CDMO, again, we've given you. So actually the growth will come from all three verticals, you know? Just one follow-up. So, on the current project, the MPP of 190 crore project, how would be the utilization? I think the revenue potential around 270-280 crore. If you can just talk about, what number of molecules or the, revenue run rate that which are, which we are... In the MPP molecule, MPP plant, particularly around capacity utilization, when we last spoke, I said capacity in MPP very difficult to define in tonnage terms. But in terms of value, you know, we talked about saying that MPP would be somewhere around, we would be in the range of about 70%-75% in terms of the peak annual revenue. But of course, as we go into the next year and coming year, given the order visibility that we have, we expect that to increase. Plus, we also use the MPP to continuously do new molecules, and part of the reason for doing those new molecules is to actually keep the pipeline strong so that you are able to utilize your own assets and also use that as a decision-making, if you wanted to make further investments into it. Noted. Just last question and second question: So on the CapEx side, CapEx for FY 2025 and 2026, and the areas of CapEx. Thank you, and all the best. So the CapEx that will continue into 2025 and 2026 of what I can tell you now are only the board-approved projects, which are R32, AHF, and the cGMP4, yeah? Those are continuing. Like we said before, there are several projects we are working on in the hopper. Some of that will mature, and we do hope to look at progressing at least one of those options by middle of next year... middle to late middle, this is just rough indication, yeah? And that's to fuel the growth beyond 2027, as we are talking about. Does that help, Keyur? I think Keyur's gone. Yes, actually, sir, Keyur has been disconnected. We will move on to the next question. It's from the line of Archit Joshi from B&K Securities. Please go ahead. Hi, sir. Thanks for the opportunity. I just have one question on CDMO. While we have discussed a lot of permutations around the $100 million target that we have for the business segment, what would be the significance and the roadmap that we expect for the U.S. major and the U.K. major that we have been dealing with? How would be the nature of that business? Would it be campaign-based, or do we expect something significant, let's say, in a two to three-year timeline? It will progress. It's very difficult to give you that timeline, and that's the reason why we work with a hopper of products over there. You know, so it's not just these two, but there are others as well. These two currently look most promising, but again, you know, that's all I can tell you today, you know? But, which one, what will come out, very difficult for me to second-guess that, Archit. Sure, sir. But would it be fair to assume that these will be some of the important or, let's say, significant ones while we are considering the $100 million number, given that- Think of it this way. I mean, I would answer your question in another way. I I mean, if you look at FY 2023, I think our revenues were in the range of about INR 333-INR 350 odd crores, right? And that was with neither Fermion nor the European CDMO, nothing, right? So if you just extrapolate that, the potential of the business is there for you. You You know, we have reinvigorated the business development team. There's a lot of direct involvement from Nitin and his and the CDMO business leadership in this area. There will be growth. It doesn't have to depend on just one or two of these molecules, if you know what I mean. It depends on the overall macro in the industry, and we know the macro in the industry with the Biosecure Act, that, you know, there is greater emphasis to for the large players to look at optionality other than China, and India tends to be more competitive in that space once you step out of China. Sure, sir. Got it. Thanks, and all the best. Yeah. Thank you. In the interest of time, we will take the last question from Nitesh Dhoot, from Dolat Capital. Please go ahead. Yeah, good evening. Thanks for the opportunity. Sorry if I'm repeating this question, but the CDMO revenue mix, you know, has moved significantly in favor of India at 61%, wherein- Nitesh, it's sounding all jumbled up. Maybe you'll have to either come closer to the microphone or talk slowly. And loudly. And loudly. Sorry, is it any better? Yeah, better. Just go slow. Yeah, sure. So, I was asking on the CDMO revenue mix that has moved significantly in favor of India at 61%. So, while you know, so, so is it to do with the increase in the late-stage molecules and how and this is how it will be, you know, going forward? No, I don't think you should be looking into that. That supply into India is at the behest of a global customer. So that's just been supplied today to India. You know, it may continue to India. If the proportion will change, we know for sure. It's also an equation of the registration timelines, and I think we've shared that before as well, Nitesh. I think you were at Dolat, right? So, yeah. Right. Just one more question that's on the finance cost. What I see is that the net debt has increased by over 20% year- on- year, but the interest cost has gone down by around 13%. Yeah. So, net... Sorry, did you say net debt has increased by 20%? That's year- on- year. I mean, if I'm looking, Q2 to Q2. Oh, no. Okay, okay. So if I look at March to now, right? If you look at March to now, our debt hasn't increased that much. But, you know, to point you on your finance question, I think I know where you're coming from. You're looking at the interest cost, aren't you? Uh, yes. Yeah. So see, what happens, Nitesh, over there is our project loans that we take. Some of these project loans are generic project loans. And in the early stages of the projects, you know, a lot of the allocation happens between the projects and the GST associated with CapEx. But as you know, the GST on CapEx is a working capital item, which gets unbound at a later stage. So earlier, the amount of projects, the interest cost that is attributed to the non-fixed asset type expense, but still CapEx in nature, hits the P&L. And now, as your spend increases towards the fixed assets itself, that gets allocated to capital. That's the way to think about it. Yeah? Hello? Oh, did we lose him? Sorry. Hello, Mr. Nitesh, did this answer your question? Sir, the current participant has been disconnected. As this was the last question, I would like to hand the conference to the management for their closing comments. All right. So thank you all for the time today. On behalf of Vishad Bhai, Nitin, and the management of Navin, I would like to wish everybody a very happy Diwali and also, of course, Payal. We miss you, Payal. Yeah. So again, Happy Diwali to you and your families, and stay connected. Thank you. Thank you. On behalf of Navin Fluorine International Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.