Ladies and gentlemen, good day and welcome to the Q3 FY24 Earnings Conference Call for Ami Organics Limited, hosted by Ambit Capital. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prashant Nair from Ambit Capital. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and welcome to the third quarter fiscal 2024 earnings call of Ami Organics. Today we have with us from management: Mr. Naresh Patel, Chairman and Managing Director; Mr. Bhavin Shah, Chief Financial Officer; and Mr. Abhishek Patel, Vice President Strategy. I would now like to hand over the call to Mr. Bhavin Shah for opening remarks. Over to you, Bhavin. Thank you, Prashant. Good evening, everyone. We are pleased to welcome you all to our Earnings Conference Call to discuss Q3 FY24 financials. Please note that a copy of our disclosure is available on the investor section of our website, as well as on the stock exchanges. Please do note that anything said on this call which reflects our outlook towards the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. The conference call is being recorded, and the transcript along with audio of the same will be made available on the website of the company and exchanges. Please also note that the audio of the conference call is the copyright material of Ami Organics and cannot be copied, rebroadcast, or attributed in press or media without specific and written consent of the company. Today on call along with me, we have Mr. Naresh Patel, Chairman and Managing Director, and Mr. Abhishek Patel, Vice President Strategy. Now, I would like to hand over the floor to our CMD, Mr. Naresh Patel, for his opening statement. Over to you, sir. Thank you, Bhavin. Good afternoon, everyone. I hope you all are doing well. A warm welcome to our Q3 FY24 Earnings Conference Call. I would like to wish you all a great and prosperous New Year. Before I discuss the results for the quarter, let me discuss some economic and industry headwinds and tailwinds. This year is expected to be the year of demand recovery following the unfolding slump since the later half of 2023. Inflation is steadily retreating towards the comfort zones of central bankers across the world, signaling a positive turn. However, ongoing geopolitical crises continue to cast a shadow on uncertainty. A prime example of this is the Red Sea crisis, which has led to a spike in freight costs. Addressing the industry, we see the demand picking up steadily. However, a sharp decline in raw material prices has exerted pricing pressure across the specialty chemical sector. As we speak, we are witnessing raw material prices stabilizing. Consequently, we anticipate a return to standard pricing level in the coming quarters. With this, let me turn your attention to our Q3 results. Our focus through the quarter has been on quality growth, and I'm happy to say that we have been able to deliver the same. Let me deep dive into this. Our revenue from operations for the quarter was at INR 166 crore, which is growth of 9.2% year-over-year. However, if you look at volume growth, our overall business has grown by 25% year-over-year, showing strong business traction. A pricing stabilization, I'm confident our growth will be back to the 20% level. When I refer to quality growth, it doesn't only represent strong volume growth but also strong uptick in margins. If you look at our numbers subsequently, they are slightly lower than previous quarter. But if you look at our EBITDA margin, they have expanded by 150 basis points. I believe this trend will continue in the coming quarter. The growth for the quarter was catalyzed by both the pharmaceutical business as well as the specialty chemical business. I will let Bhavin discuss financial performance in greater detail. Moving on to the business update, I'm happy to say that we have inaugurated our Ankleshwar plant in December 2023, marking a milestone for us given that it took us 12 months for the inauguration since the groundbreaking commenced. This makes us a great achievement, and I would wholeheartedly like to congratulate our team and highlight the tremendous effort they have put in this. I would also like to highlight that the new plant is a testimony to the state-of-the-art technology we are bringing to advanced pharmaceutical intermediate manufacturing in India, and is symbolic of Ami Organics' commitment to innovations and its role in revolutionizing India's intermediate landscape. On the very day of our plant inauguration, we extended our partnership with Fermion by signing an agreement for two more advanced intermediates for the API. These advanced pharmaceutical intermediates will be used in captive consumption for the earlier advanced pharmaceutical intermediates signed with them. The agreement is likely to add tremendous value to the final advanced intermediates, which will be supplied by Ami Organics, leading to higher value of the end product. The products are slated to the manufacturing Ankleshwar facility and are expected to start contributing meaningfully to the revenue from FY25 onwards. On that note, I want to emphasize our ongoing efforts to engage with our customers for such kinds of opportunities. I'm optimistic about finalizing a few of these in the upcoming year. Moving to our electrolyte business, I'm happy to say that we have signed an MOU with the global manufacturer of electrolytes for manufacturing of electrolytes for battery cells and allied materials. Recently, we have also commenced commercial operations for electrolyte additives, which I believe will start ramping up from FY25 onwards. I would like to highlight that the ramp-up would be gradual. In regards to the electrolyte opportunity, we have also signed an MOU with the Government of Gujarat for investment amounting up to INR 300 crore for setting up a dedicated manufacturing facility for electrolytes business in Gujarat. Moving on to the Baba Fine Chemicals, the integration is currently underway. This process usually results in operational issues due to changes in ownership and the name of the company, which will have a temporary impact on sales. This situation is expected to be transient, and we anticipate pickup in sales following the completion of this integration. Before I conclude, I would like to highlight that in today's digital landscape, safeguarding sensitive information and ensuring data confidentiality, integrity, and availability have become paramount in nature. With these in mind and our endowment to always follow global standards, I'm proud to announce the implementation of the Information Security Management system, ISMS 27001:2022 practice across the organization: ISMS is a comprehensive framework that assists organizations in managing and protecting their information assets. By adopting ISMS practice, our goal is to enhance our overall information security posture and create a secure environment for our employees, clients, and stakeholders. I'm glad to inform you that we have successfully passed the ISMS 27001:2022 audit and received an ISO 27001:2022 standard certification. To conclude, despite the industry headwinds, we remain confident in closing the year with healthy growth. I would also like to highlight that the various initiatives we have taken in FY23 and FY24 enhance our revenue visibility for FY25 and beyond, bolstering our confidence in our potential for stronger growth in the coming year. Now, before I hand over the call to Bhavin, I would like to welcome back Abhishek Patel, who has rejoined us as Vice President Strategy. Abhishek will work closely with me on strategic initiatives. Even he has been with the company for more than five years in his previous stint at Ami Organics, he knows about the business very well. Therefore, he will also handle investor interactions along with Bhavin. I have worked with Abhishek closely for many years in the past, and I'm confident that he will add immense value to the company. With that, I request our CFO, Mr. Bhavin Shah, to discuss the financials with you. Over to you, Bhavin. Thank you. Thank you, Naresh. I would like to briefly touch upon the key performance highlights for the quarter and nine-months ended 31st December 2023, and then we will open the floor for the question and answer. I will begin with the quarterly update. Revenue from operations for the quarter was at INR 166.5 crore, up 9.2% as compared to INR 152.4 crore in Q3 FY23, driven by robust 25% volume growth. The gross profit for the quarter was at INR 71.4 crore, which was up 2% when compared to the same period last year. The gross margin for the quarter was at 42.9% compared to 46% in Q3 FY23. Lower gross margins were driven by an unfavorable product mix. Moving on to EBITDA for the quarter was at INR 26.5 crore, down 13.9% as compared to INR 30.8 crore in Q3 FY23. EBITDA margins for the quarter were at 15.9% compared to 20.2% in Q3 FY23. EBITDA margins were driven by gross margin and higher employee expense. Higher employee expense was driven by yearly increment, ESOP cost, and hiring of new employees for the Ankleshwar unit. PAT for the quarter was at INR 17.8 crore compared to INR 22.3 crore in Q3 FY 2023. PAT margins for the quarter were at 10.7%. Lower PAT margins for the quarter were driven by lower EBITDA margin as well as higher depreciation and finance costs. Moving on to nine-month FY 2024 update. Revenue from operations for nine-month FY 2024 was at INR 493 crore, up 14.4% as compared to INR 430 crore in nine-month FY 2023. Gross profit for nine-month FY 2024 was at INR 215.8 crore, up 5.5% on a year-on-year basis. The gross margin for nine-month FY 2024 was at 43.8%. EBITDA for nine-month FY 2024 was at INR 85.3 crore, up 4.3% as compared to INR 82 crore in nine-month FY 2023. EBITDA margin for nine-month FY24 was at 17.3%. Adjusted PAT for nine-month FY24 was at INR 54.8 crore with adjusted PAT margin of 11.1%. Adjusted PAT figures exclude one-time full impairment of JV Ami Onco-Theranostics, LLC. Export for the quarter was at 61%, whereas domestic business was at 39%. Coming to cash flow and balance sheet, our working capital for the quarter was stretched during the quarter, mainly driven by lower payable days. Inventory and return days were steady during the quarter. Even though our working capital cycle was stretched during the quarter, we have been able to generate cash from operations of INR 35 crore for nine-month FY24, leading to cash and cash equivalent of around INR 42 crore as of 31st December 2023. Our CapEx outlay for nine-month FY24 was INR 212 crore. As informed in earlier calls about our strategy to fund CapEx through a mix of internal accruals and debt. In this regard, we have taken a INR 119 crore debt to fund the CapEx. I would also like to highlight that total CapEx outlay for the Ankleshwar unit has been revised from 190 crore to 310 crore. This was driven by the specific requirement of additional machinery for the CDMO contract as well as creating allied infrastructure. With this, I conclude my remarks and request the moderator to open the floor for a question and answer session. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets 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 Rikin Shah from Omkara Capital. Please go ahead. Hi, Nareshbhai. Congratulations on gross margin and EBITDA margin expansion at even a standalone level considering the environment we have been in. My question was more to do with Apixaban. Considering Bristol Myers Squibb has successfully removed Apixaban generics in the Netherlands, while France has also upheld the Factor Xa inhibitor patent, but Ireland has invalidated the patent and joined the UK. Considering these changes in Europe, what is our outlook for Apixaban going forward? Thank you, Rikinbhai. As you rightly say, yeah, there are some positive moves towards the Apixaban launching in Europe. We already partner with two customers in Europe and two from India who have the hold in Europe. So, we have started moving slowly, slowly started supplying this molecule. From Q1, it will be gradually ramped up, and by Q2, we are pursuing to start in a full throttle. All right. Thanks a lot. That's it from my end. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may please press star and one. The next question is from the line of Richa from Equitymaster. Please go ahead. Sir, thank you for the opportunity. My question is on this revised CapEx for this Ankleshwar facility. So, earlier, you were predicting a turnover of around 3x. So, with this revised CapEx, is it only for some kind of value addition, or do you expect the revenue also I mean, the turnover also to remain 3x? Or if you could just highlight that opportunity or what is to be expected from this revised CapEx? Thank you. It's both, basically. We have the existing as well as the new agreement in pipeline. For that, we have to upgrade our system according to the requirement, and that will bring us the new revenue in so our top line will remain in that line 3-3.5x, which will be still it is like that. Okay. And sir, for the electrolyte, if you could share some kind of timelines or some kind of estimate if you have because this seems to be a very fresh opportunity, and it's not very clear what kind of revenue and over what kind of time duration we could see in this opportunity. So, based on the MOUs that you've signed with the client and the government, if you could just throw a little more light on this opportunity. Electrolyte is right from the beginning. We always say it's not part of our position. The reason was we sensed this very early, 2 years, 2.5 years back, that it will be a slow-moving project because of the several requirements and several compliances. Now, we reached the level where now we started manufacturing this quarter of this electrolyte and two additives. We started the manufacturing. And also, we got several contracts, long-term contracts, that help us to supply this molecule in Asia as well as in Europe and some quantity in the U.S. as well. So, this is how we started electrolyte additives. In this additive segment also, we have developed another 6 more additives. These all are listed on our website as well. And these are the samples also going to the customer, for so that will bring so now, the existing customer has more electrolyte additives from us, and that helps us to grow this business. And not only that, not only that, we had signed an agreement with one of the solution manufacturers to make their solution in India, particularly for them. And that is what we announced with the Government of Gujarat. Okay. But right now, what you're suggesting is that a quantification. Is it too early or any kind of estimate that you could share with us on that? So, it's not too early. It's gradually ramping up. So now, from this quarter, we manufacture and start supplying for the quantities to all three manufacturers who have already started placing orders to us. And then slowly, slowly, other customers will ramp up in that. Parallelly, we also started all manufacturing for solution in India as well for the Indian consumption. And that is not related to our existing business. This is pure, you're talking manufacturing kind of JVs, which we are making with one of the Asian clients or making in India. Okay. And sir, when you say that electrolyte would have similar margins, is it in line with the specialty chemical or the company-level margins as a whole? It is in between both. It's above specialty and below the company pharma margin. Okay. Sir, last question from me. Our presence in the U.S. market seems to be much less as compared to Europe. So, I mean, is there a conscious thought process of increasing the market share there? And if at all, you're doing anything on that front, if you could share with us. You're talking about the pharmaceutical presence, or you're talking about the specialty presence? Overall exposure. When it comes to our geographical diversification, overall, our share from the U.S. market is really low as compared when we look at the export record. Okay. So, pharmaceutical will remain like that because all the API generic manufacturers or maybe some innovative manufacturers, they are based in Europe. That is the reason our pharmaceutical intermediate presence is higher in Europe compared to the U.S. In the U.S., we have sales in pharma, but that all goes for the CMO and CRAMS kind of business with companies based in North U.S. In terms of specialty chemicals, we have a very good presence in the U.S., selling several molecules from Gujarat Organics. And we are also in negotiation of several big contracts for Gujarat Organics products in the U.S. So, that will be upcoming as it will be incremental in the U.S. presence for specialty chemicals. Electrolyte definitely is a high market, and that will also going to be increased in the U.S. supply in upcoming quarters. Okay. Okay. Thank you very much, and all the best. Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. The next question is from the line of Jason Soans from IDBI Capital. Please go ahead. Yeah. So, thanks for taking my question. So, first question I wanted to ask you is, our nine month revenue growth stands at 14.4%. And last quarter, we had guided for a growth of 18%-22% for FY2024, which probably looks tougher with all the intermediate prices being driven down. So now, I mean, would you want to probably guide for the next year, FY2024 and 2025, by any chance, what can we expect in terms of revenue? So, as we have guided 18%-20% growth. Sorry, I will take this question. If you remember, in the last call, we revised our guideline from 18%-20% to 15%-18% because of the top line erode. And that will be one of the reasons that we had revised our guideline. And considering current order in hand, it looks like we are in the same space where we have to reach. Okay. So, you're saying FY24 will probably be in the range of 15%-18%? Yeah. Yeah. Okay. Sure. Any estimates for FY25, sir, by any chance, if anything you would like to share on this? FY25 will be somewhere around 17-20 between that or maybe 22. 70 to 22. Yeah. Because I believe even I mean, of course, Fermion, etc., also that volume also will start to pick up in FY25. So that will also be good, and that will aid the top line as well. Yeah. And not only that, also some new electrolyte will start contributing, and then some other new projects which are in discussion also come. So conservatively, it will be between 17-22, and then it may go up. But conservatively, it will be between 70-75. Why? Because if we see some more erosion, that's how. Otherwise, we are fully confident about 22. Sure, sir. So, and sir, my next question is, of course, when you look at going back, our margins have been around 22-20% going back. Now, of course, there is price erosion, and of course, a host of companies across the specialty chemicals are facing pressure. Now, our margins also are moderated on 14%, 15%, 16%. Now, for the same, what kind of margin are you looking at? We had a word before where you were talking about you spoke about resorting to a spot pricing method, basically, to cater to Europe customers and basically for customer retention. So just wanted to know what's the update on that. I mean, still, the spot pricing will continue, or how are you looking at margins for 2024, 2025 going ahead? Basically, what we say in the last we are trying to perform accordingly. So last quarter, we announced that we will focus on margin. In this quarter, we successfully bring it to 15%. And our next quarter, overall, it has to go to 18% between that. So that will be our spot base when we cube Q1. And from that onwards, once again, we start journey towards the 23%, which we had announced in the past. Okay. Sure, sir. And sir, just wanted to your view. I mean, there is a lot of talk about Chinese pressure, raw material prices coming down, realizations coming down. Now, what is your sense, sir, in the market? How do you see? Do you think prices have bottomed out after almost eight to nine months of correction? What is your sense on how prices will move ahead, or is there more pain we can see? Could you give me some color on it? How are you seeing the prices for advanced intermediates chemicals going ahead? What I understand in the last one quarter is that I think the pricing for China is almost on the rock bottom. It may have to go once from here onward, either stabilize or it has to go upward. Based on the raw material prices, the prices for the final product will be stabilized, or it may go up. I think this quarter is almost on a stabilized quarter. I can say like that. From here onward, in the next one or two quarters, it will be reached to the normal level, and it may go up. It may go up. Any signs of Chinese competitive intensity, sir, decreasing, or is it same level or any view on that, or? For my product, there is no direct impact of the Chinese competition. But for my end user, has some impact from the Chinese supply. So that has now it is also now because of the spot business theory, we can able to read off that as well. Sure, sir. Sure. And sir, yeah. Yeah. That is the reason why our volume growth is there 25%. Sure, sir. Sure. That's a very good strategy, sir. I would like to commend you on that. I mean, of course, so much competition is there in the market, and you resorted to the spot business to retain your customers. That's a very, very commendable strategy. So, sir, my next question, just wanted to ask you. I mean, you have spoken about electrolytes manufacturing, and just wanted to know from you what is the capacity you're looking at setting up for this? I mean, what we know is in a lithium-ion battery, around 9%-10% of the cost is electrolytes and a lot of customers. And I believe it cannot be transported a lot. So a lot of the electrolytes have to be made in-house or domestically. So, of course, other listed players are also one of the listed players already has a big, what do you say, electrolyte building capacity. They've announced a technological partner also in that. So, sir, just wanted to know from your perspective, how are you looking at the electrolytes business? Are you looking to induct some technological partner for this business too? Because clearly, what happens is this is always a slow process. Approvals, etc., take a lot of time. So could you give me some sense of what capacity you're trying to make or any technological partner you would like to take up to scale up this business faster? What is the potential you're seeing or capacity? Could you just give me some details on this? You are talking about the electrolyte additives, or you are talking about the final electrolyte? No, sir. The final electrolytes. Okay. Final electrolyte is really a business which is like a CDMO kind of business. So here is I can't speak more on that. But the thing is that whoever the partner is very strong in the world. So they just want to have a base over here. We don't want to go and sell directly. We just make for them. So it's like a secret business for us in terms of sale because we are doing just a CDMO for that. Okay. So it's a plain vanilla contract manufacturing for them. That's what you're saying? Yes. Yes. Yes. Okay. Sure, sir. This will be so basically, there are various recipes in it. So basically, what the client will tell you, you will manufacture for them. That is how it will be. Yeah. Yeah. Yeah. Okay. So do you see a lot of volume coming in, or this will be a slow-moving project? How do you see it? No. This will be the very fast-moving project because they are already in the market and controlling world market at a very high level. So this is a base for them, additional manufacturing platform for them to cater the Asia and some Europe market as well as some Ireland market also for them. So the region where they will sell is up to them. Our job is to make a final solution and deliver to them. Okay. Okay. So they will give you the technology and everything, the recipe, and you will be making for them, basically? Exclusively making for them. It's two different business. Additive is fully Ami Organics technology, Ami Organics own project. And the solution is fully CDMO where we just give them the production support. Okay. Okay. And sure, sir. So next, I mean, electrolyte additives. Sir, I mean, 2, 3 quarters back also, we had heard some sales coming in. I think we have a 500-ton capacity in Jhagadia where we can start up these electrolyte additives. But sir, I mean, orders still have to come in, or how is it? Can you tell me the status on the electrolyte additives piece? So we signed several agreements, long-term supply agreement with the customer. Now we have started commercially producing these additives, and we start supplying. We develop the production line. We develop the packaging line and everything, shipment, and now we start supplying the commercial supply to them. That is what we had announced also publicly that we now are commencing the production for electrolyte additives. The ongoing capacity will be, it will be incremental, and it may go up to 4-5-fold of total existing capacity in upcoming years. Revenue from this will be probably coming in from FY25 only? Yes. Yes. Maybe in this quarter, if we got an opportunity to see for other recipes, it will be from the next quarter. But firm orders are in hand. So we are already moved in the production. Okay. Sure. Sure. Sure, sir. Thanks. That was all from my side. Thank you for answering my question. Thank you. The next question is from the line of Dhruv from ValueQuest. Please go ahead. Yeah. Am I audible? Yes. You're muted, ma'am. Please go ahead. Bhavin, sir, first, I have a question for you, more like a bookkeeping question, if you can help us with the segmental EBITDA numbers for pharma intermediate and specialty chemical business. If we want to give EBITDA number for pharma and specialty, both are standard 15.9%. Sorry, sir. Can you come back? 15.9% is? For both the business, we have an EBITDA of 15.9% for the quarter. Sir, but can you split that between what is the margin for specialty chemicals? I'm telling you 15.9% for pharma and 15.9% for specialty. So specialty also includes Baba Fine Chemicals. That is why the margin looks higher? So now onwards, Baba Fine Chemicals is part of our specialty business. So margin is accordingly. Okay. And what would be the revenue number for Baba Fine Chemicals this quarter? See, specific number we are not giving over the call or this thing. So I refrain from sharing those numbers. Okay. Okay. So my second question is more on the additives business. So we mentioned that there are several long-term contracts that you have, firm contracts. And I think we only have a 500-ton capacity for the additives. So what is the kind of capacity expansion that you expect to build here? Standard capacity, what we have right now is 500 metric tons each. That is our first goal to fulfill. Then parallelly, we are adding more capacity for the upcoming demands of the electrolyte additives. Okay. So would you like to share how much capacity are you going to add now? 2,000 metric tons each of the final additive. 2,000 each for two additives that you're going to supply? Each. Each. Okay. Thank you. That's it from my side. Thank you. Participants who wish to ask questions may please press star and one. The next question is from the line of Jishan Singhi from Krijuna Research and Analytics. Please go ahead. Thank you, sir, for this opportunity. I would like to ask that as you mentioned that you are doing a plain vendor-type contract in electrolytes. So I just want to know the differentiation between additives and electrolytes. Does this both have difference? Additives are used to make electrolytes. Electrolytes have a lot of components, whereas additive is just one component of the electrolyte. Okay. Okay. So as you said that you have inbuilt these additives in-house, right? Yes, sir. So, is this unique product, or does this product have some competitive intent? If I'm correctly understanding, you want to ask that you are making an additive which will give us the competitive advantage for making electrolytes. Is it correct? Yes. Yes, sir. Bilkul. Yeah. So this is one of the reasons that we got this CDMO because we have in-house electrolyte additives which can be used for making the solution. But these additives are used only 3%-4% of the solution. So it's not great impact on the final solution. But the partner has chosen us because of several other parameters in which we fulfill their requirement. Okay. Can you give me the size of market in this electrolyte segment? Sorry. Can you repeat your question? Yes. I mean, what can be the estimated market size for this electrolyte segment? And what is your addressable size in that? It's varying based on the final price of the when we enter, it was very big, around $1 billion. And currently, the price of the raw material is the final product is less down by 20%. So it all depends on the current market size. So it's very difficult to give the real exact number. And then also the application in the area of the country or geography, that also depends on the market size. Okay. And what is your addressable or your share in this? We are talking about the capacity. So currently, we have 500 tons each, and we are going to install more 2,000 tons each. So this is our addressable market for next two years. One minute, sir. As you said, 500 tons each. So what does this mean? Can you please clarify more? There are two products, VC and FEC, which we have already executed. For that, our capacity is 500 metric tons each. Okay. Okay. So this. Continue, sir. Okay. And for these two products, you are doing contract manufacturing? That is different thing. Okay. Okay. And for. Sorry. We lost your voice. Jishan, the line for you was in order. Revenue or turnover size from this new facility that you have started? It will be somewhere around 3x of the numbers where you need. Okay. 3x. Okay. That 3x asset turnover ratio, right? Yes. Okay. Okay. So three times then, if you consider this INR 310 crore as an asset, right? So it will be more or less INR 900 crore revenue, right? I don't know, sir. You have to calculate that. I can't speak on numbers. Okay, sir. My next question is that as the Baba Fine Chemicals which you have acquired, is this for specialty chemical segment or electrolytes? It is a semiconductor. We included it in the specialty, but it is an application in the semiconductor industry. Okay. Semiconductor industry. Okay. And so I would also like to know that what will be the that means, like you mentioned, 3X for your Ankleshwar facility. Then the same applies for the Baba Fine Chemicals? No, Baba Fine Chemicals, there is no expansion over there. It is an established business which we are running there. There is no capital currently infusing that company. Okay. Then how much does it contribute to your top line? Currently, it is somewhere around 40-45. It can go up to, it can be incremental up to three times from here. crore-INR 45 crore? Yeah. हेलो? Thank you. The next question is from the line of Rikin Shah from Omkara Capital. Please go ahead. Rikin Shah, your line has been unmuted. You may proceed with your question. Hi. So I just wanted to ask whether in terms of technology, we have mentioned that we have developed six more electrolyte additives. So are they new blends for the same salt, or are they blends for some other salt? No. So these are the new additives which are used for depends on the salt and depends on the formulation. So one may be bought by someone, second may be not bought by the same one. So it all depends on the formulation recipe. So we develop these all six which can be either used by one and same application, someone is used another one. So this is how it will be. Okay, sir. That's it. Thank you. Thank you. The next question is from the line of Nikhil from Perpetual Capital Advisors. Please go ahead. Yeah. Thank you for the opportunity. Sir, in the last quarter, you had mentioned that the company is looking to launch a UV absorber product in the specialty chemical business. So just wanted to know how is the response or when do we see the ramp-up of this product? Your voice was not clear. I'm extremely sorry. Can you repeat it, please? Yes. Is it clear now? Yeah. Yeah. So last quarter, you had mentioned that the company was looking to launch a UV absorber product in specialty chemicals. So as that happened, then how do we see the ramp-up going forward for it? Thanks. Thanks. Thanks for bringing this. Yes. We had already supplied validation quantity around several metric tons. It will be ramped up from Q1 FY25. Okay. Okay. Any other new products in specialty chemical? I think it's almost 2 years or maybe 3 years now that the company has acquired this specialty chemical plant. I think the potential was to hit close to INR 200 crore-INR 250 crore odd top line on an annual basis. When do we see that? Maybe it's slightly lower now due to the correction in prices. Yeah. So price is always a factor to revise the timeline. But volume is increasing. So once we hit the volume, we are not worried because sooner or later, when price ramps up, volume will give us the revenue what we desire. Okay. So let me put it this way. What is the current capacity utilization in this plant? And when do you expect to hit optimum capacity utilization? So currently, it will move from 45%-50%, 54%, 55% ramp-up has happened in the last one year. And it will be fully utilized by 2026. Okay. Okay. And anything on the timeline of ramp-up of the Fermion contract? Do we see some part of it in the end of the current fiscal year, or do we start seeing that from Q1 and it being ramped up to its full capacity in a year's time? Currently, we are in the process of qualifying some validation batches which will be in this quarter. Then it will be another quarter for 1 or 1.5 quarters for validation thereafter. Then it will be gradually, exponentially ramped up to the end of FY25. Okay. Okay. One last question from me is this INR 300 crore toll manufacturing opportunity that you spoke about, have you given the timeline? I'm sorry. I joined the call a bit late. About that timeline, it is very it has to be next year only, FY25. But we are in the process of finalizing the term sheets and everything. So once that will be, we will announce on that. Okay. And the plant would take close 12 months to come up for that? Yes. Got it. Got it. Yeah. Thank you so much. Thank you. Thank you. The next question is from the line of Akshat Vijay from HEM Securities. Please go ahead. Hello? Am I audible? Yes, you're audible, sir. Yeah. So my first question is that have you lost any market share? Because the reason for this update performance is only the pricing pressure, right? There is no loss of market share? No. Okay. And for the Ankleshwar facility, you mentioned that one-third of the facility will be dedicated towards the Fermion deal. And the remaining 66% will be used for your other pharma business. So have you already started getting orders for that 66% facility? Are you in talks with some other customers? Yes. We are actively negotiating and discussing with the other firm. Okay. Nothing is finalized right now, right? Yeah. It will take time, need to finalize several issues, verification, and cost and everything, because the CMO takes some time. Okay. And the last question is on your margins, right? As you mentioned in your previous consults that you're focusing a lot on the specialty chemical segment. And now this electrolyte is also coming in. And both of them have lower margin than pharma, right? So obviously, currently, this China thing is going on. Pricing pressure is there. But 3-4 years down the line, do you expect that we can ever reach that FY21 EBITDA margin level of 24%? The operating leverage will also have a role in here. So what will be the margin guidance or outlook 3-4 years down the line? For your down the line, definitely, it will be between 23-26, between that. Okay. 23%-26%. Okay. Okay. That's it from my side. Thank you. Thank you. The next question is from the line of Vishal Agrawal from Leo Capital. Please go ahead. Before you ask your question, sir, may I remind participants that you may press star and one to ask a question? Thanks for the opportunity. My question is on the electrolyte business. It's clear you said that you have a CDMO contract which is for manufacturing a solution which will use your electrolyte additive. And that is only for one client. And on top of that, the electrolyte additive ability that you have, that you are able to sell to multiple clients. Is that correct? These are two different businesses but related to electrolytes. Yes. Okay. And in terms of revenue potential for the CDMO one, how large is the opportunity for the CDMO one? It is difficult to say right now because it's confidential. And we need to be we will announce once we sign the term sheet. Understand. And as part of the CDMO, you will not be making the entire electrolyte. You'll be making the solution which goes into the electrolyte. So what portion of the electrolyte value is the solution? No. The solution is known as electrolyte. Sorry. You're saying the solution is not an electrolyte? No. Solution is an electrolyte. Okay. The solution is an electrolyte. So as part of the CDMO, you will be making the final electrolyte of which additive is one component. But the rest of the recipes will come from your partners, so to say? Yes. They will supply us for themselves. Understand. And in that kind of a business, what sort of a margin profile would you expect? Would it be in line with your API business? No. It's a CMO. So there, we have to see how much operating leverage and all we will get based on that the margin will be decided. So that is yet to announce because these all depend on the recipes and quantities and energy and all. So it's very difficult right now to announce about the margin of CMO. And this is a specialty chemical CMO. It's not like pharma. So it's a different way. So you would expect a lower margin than the pharma CMO? Pharma CMO is the top one always. You cannot compare pharma with the specialty CMO. Understand. And so that I understand it right, you are saying that this electrolyte solution, that will be under CMO. And that, obviously, will be proprietary to that one client. So you cannot sell it to anyone else. You cannot use that or I'm assuming you cannot use that ability to create electrolytes and market it generally. What you can sell generally is only the additives which you are making yourself. Ami Organics USP not to compete customer. So we follow strictly this rule. So we never compete our customer. So if we do CMO for our client, we never sell that product to anybody else. Understand. But you see enough revenue potential to grow with that client itself that there is a lot of market opportunity just there. You don't need to. Yes. Yes. Yes. Got it. Got it. And just coming back to your API business in pharma, there, you have two parts. One is with innovators. And the other is generics. For both of these, what's the competitive advantage that we have? Are we exclusive with our clients? Or I know you have mentioned earlier also that Chinese players are not competition for us. But then who is competition? And what happens in China impacts us in terms of the long-term margin profile for this business? There are competitors from other generic intermediate manufacturers based in India or maybe Europe or maybe the client himself. So it all depends on where we are selling and what is the say, for example, regulated market with the originator. They have two different geographies. They have to themselves also one of the approved clients for themselves to manufacture. And for generic business, there are Indian small manufacturers. Also, some big manufacturers also are competitors. So it all depends on the product-to-product and application and geography. And you're saying basically, there may be other API manufacturers also listed in the DMF other than you yourself. And they are competition. They are not Chinese guys necessarily. But they are competition. Yeah. They are directly competing to our client if they have a DMF themselves filing the same application. I understand. And you're saying the Chinese guys essentially compete with your end client because they may be manufacturing the end product which your client is making. So that puts pressure on the pricing for your end client and indirectly puts pressure on you. Is that correct? Yes. Yeah. Nowadays, Chinese CEPs and DMFs filing is incremental. So does that create a little bit pressure on our client in the final application? Understand. Understand. Got it. And just lastly, for the electrolyte, the opportunity, the CDMO one that you spoke about, is that a very CapEx-intensive business? Or it's more about process efficiency and there's not much CapEx involved? The reason I ask that is as you scale up that CDMO business, is it like it will have a lot of lead time for you to identify location and do the CapEx? Or it can be scaled up very quickly? CapEx-intensive business. But it's a long-term secure business. Understand. It would take several years to ramp up because you would have to do the CapEx and so on? Yeah. It will take a normal timeline to ramp up any business, the standard timeline. The same, it will be applied to this as well. Any sense on the timeline, sir? How much time would it take? I can't say on that right now. Got it. Thank you, sir. Thank you for the opportunity. Thank you. The next question is from the line of Mithun from Capital. Please go ahead. Mithun, the line for you has been unmuted. You may proceed with your question. As there's no response from the current participant, we will move to the next participant in the queue which is Ayush from sorry, Ayush Rathi from IDBI Capital. Please go ahead. Hello. Am I audible, sir? Yes. You're audible, sir. Yeah. Sophie, thanks for taking my question, sir. I had only two basic questions. First, on the finance cost. In this quarter, we have a finance cost of INR 25 million. So for modeling purposes, for the next quarter also, we will have the same finance cost? Yes. So it will be on the same line, a little higher than this because as we are doing additional CapEx, so there will be borrowing on the books. And it will be a little on the high side. All right. So as in your opening remarks, you mentioned INR 119 crore debt has been taken for the Ankleshwar facility. What kind of debt to equity are we looking at on an overall basis? So generally. Percent equity? It would be around 37% equity. And that's this debt. All right. Got it. And so one last question on the strategy side. So you mentioned that on the electrolyte part of business, there's one customer who you are making solutions. So in the long run, are we planning to also be in the business of electrolytes or completely focus our business on electrolyte additives? So what remains our main focus? No. We completely focus on our electrolyte additive business only. This is an additional opportunity which is the CDMO. This has nothing to do with our original planning of additives. All right. So we plan to stay in the additive business more and focus more over here? Yeah. All right. Thanks a lot for answering for my question. Thank you. The next question is from the line of Piyush Jain, an individual investor. Please go ahead. Yeah. Thank you for the opportunity. Thank you, Nareshbhai. Good performance, up to 25% volume growth. I just want to understand a few quick things, sir. When will we start booking the sales from electrolyte? No. We already got an order. So now sales may be in this quarter. Or maybe next quarter, we will be invoicing. You talk about additive or you talk about the electrolyte? Sorry. Electrolyte. Electrolyte. Or maybe a contract with Fermion. Or maybe a broader way, a contract with Fermion. When this will? The contract with Fermion is already in this quarter. We are doing validation batches for them. So that will be comments from this quarter. And for electrolyte additives, we got an order. And we started production for that as well. And for electrolyte, it's still premature. We are finalizing so many things. Then we put up the plant. And it will then come so it will take a longer time for electrolyte CDMO. Okay. And this Baba Fine Chemicals, this quarter, this summer, Baba Fine Chemicals's number included in this quarter already? Yes. In consolidation, Baba Fine Chemicals is included. Okay. So just to understand earlier on call, we have said Baba Fine is around 40% type of EBITDA margin business. So are our EBITDAs able to hold because of the Baba Fine contribution? Or Baba Fine's contribution is not too much that can change the margin profile here? See, we need to understand every business has a different growth pattern. So electrolyte has a different margin. Semiconductor specialty chemical has a different margin. On top of that, the margins of Baba, the consolidation of Baba business was done in Q2 FY2024 also. So it's not only in this quarter. It has been for a full year. So it's already there. It was there in last quarter as well. Okay. Okay. Okay. One more thing, this INR 300 crore CapEx which we have said. So when will we start deploying this CapEx? Sorry? So INR 300 crore CapEx for electrolyte will take some time. Whereas for Ankleshwar is already ongoing which will be finished very soon for this upgradation of the new facility. Any internal target, Nareshbhai, to achieve INR 1,000 crore revenue by, let's say, two years, three years, anything? Not asking for guidance or numbers. But we might be having some target because we are doing so many contracts with Fermion, electrolytes, so many things going ongoing. Any thought process that when we will be able to achieve 1,000 crore number 2025, 2026? 25 and 26 midway. Okay. Thank you. Thank you, sir. Thank you. Thank you for the great number. Thank you. The next question is from the line of Dinesh from Kriti Creation. Please go ahead. Namaste, sir. Namaste. Sir, I'm speaking Hindi. It's better for me. Okay. Sir, ये electrolyte additive है, ये हाइड्रोजन में भी लगते हैं, green hydrogen में। तो उसका भी कोई बनाने का है क्या प्रोग्राम? नहीं, sir. Actually, electrolyte एक तरीके का नाम दिया गया है। तो हर एक प्रोसेस के लिए electrolyte होता है। हम हाइड्रोजन के लिए कुछ नहीं बनाते हैं। अच्छा, अपना केवल लिथियम आयन बैटरी सेल है, उससे रिलेटेड जो additive है, उसी में काम होगा? हाँ, sir. Okay. Thank you. Thank you so much. Thank you. The next question is from the line of Krishna Kumar, an individual investor. Please go ahead. Yeah. Thank you for the opportunity, sir. Can you hear me, sir? Yes. Yes. Yeah. Sir, regarding the Baba Fine Chemicals, you said right now, the INR 42 crore of annual revenue. So you wanted to take it to INR 200 crore. So when can we expect that INR 200 crore potential revenue? In which year? No. No. It's not like that. See, when we acquired, it was INR 42 crore. When we acquired that business, it was the last year, it was INR 42-45 crore. And then this year is a consolidation year where we are integrating it, changing the name of the company and all, and then approval from the customer end. So this year will be either muted or a little bit lower because semiconductor industry is a very different industry than the other industry where approval and qualification from end-to-end customer is needed. So that procedure is going on. And then in two to three years, it will be ramped up to the top line, what we say. Okay. One more question. This is the same thing, sir. Recently, we saw the announcement of Micron in Gujarat for the new manufacturing facility. Are we doing any supplying to this company? Micron might be a consumer of our end and supplier. So maybe we cannot say this because it all depends. It's a very closely held business community in semiconductor. So we are supplying to someone who might be supplying to them. Okay. Perfect. And one more thing, sir. Regarding the promoter selling I mean, it's not promoter. It's a previous side promoter. So can we expect some more selling in these two, three quarters? Or is it already over? Sorry. Can you repeat your question, please? I mean, the side promoter selling I don't remember the name of that promoter. So I think he was a key investor. But recently, he sold some of his stake. So can we expect the remaining selling in two, three quarters? Or he's going to continue the Girishkumar Chovatia? No. No. No. No. He will not going to. He's not a promoter itself. He was a seating partner during the inception of the company. And then he qualified as a promoter and then dequalified as a promoter as well. And he will not going to sell anything in the next three quarters, which is what. But still, there is a remaining. Which is what he say, "I cannot stop anyone. I cannot stop you to buy or to sell." So on behalf of any stakeholder, I cannot commit anything on that. Yeah. And one of your, yeah. Because in one of your interview video, you said that if he is intent to sell anything, he will inform you before that. So, do you have any intent to buy some more from that? I mean, I just. No. No. He says that in a good note, he says that if he has to sell, he will inform me if I have to buy first. And then he can sell to open market. And last time when he sell this 13%, I purchased 1% from him. So he offered me also. So in last sale, I myself purchased 1% from him. So it's good to know that I am believing in my company and I increase my stake in that way. Thank you. Ladies and gentlemen, due to time constraints, we will take that as a last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you, Ambit Team, for hosting our conference call. Thank you, everyone, for your patience. We hope we have been able to answer most of your queries. If we have missed out on any of your questions, kindly reach out to our IR advisor, ENY. We will get back to you offline. Thank you very much. Have a nice evening. Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.