Ladies and gentlemen, good day, and welcome to Q1 FY 2025 earnings conference call of Clean Science and Technology Limited. We have with us on the call, Siddharth Sikchi, Executive Director and Promoter; Sanjay Palnitkar, CFO; and Pratik Bora, Vice President. 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. Siddharth Sikchi for the opening remarks. Thank you, and over to you, sir. Thank you so much for the introduction. Good evening, everyone. I am happy to connect with all of you to discuss the performance of our company for quarter 1, 2025. Overall, the business environment continues to be encouraging, and our quarterly business performance has been reflection of our encouraging business environment. Coming to the financial highlights, starting from quarter-on-quarter comparison, on sequential basis, the revenues were steady. The geographical mix also remained stable during the quarter on back. EBITDA remained steady at about INR 98 crores, while EBITDA margins improved by 100 basis points to 45.5%. Coming to the year-over-year comparison, on year-over-year basis, sales improved by 16%, which was primarily volume-led. Improved sales led to strong EBITDA growth of 28% during the quarter, while EBITDA margins improved by approximately 4%. Consequently, the company reported 23% growth in PAT for the current quarter. On consolidated basis, profitability was impacted due to sizable higher cost base vis-à-vis sales for the new subsidiary, Clean Fino-Chem Limited, CFCL, during quarter one. During the current quarter, CFCL, at CFCL, we stabilized 770 HALS production and reported revenues only for HALS 770. During the month of July, CFCL commercialized 3 additional new products under the HALS segment, which are HALS 622, HALS 944, and HALS 783. Soon, within couple of weeks, we will also be commercializing another HALS 119. Commercialization of new plants and scale-up of existing capacities will aid higher absorption of the fixed cost and drive profitability. Let me talk about a little bit on sales profile. The revenue contribution from Performance Chemicals, Pharma and Agro Intermediates, and FMCG Chemicals were 69%, 18%, and 13% respectively. The Performance segment witnessed strong growth led by increased volumes. Pharma segment growth was led by improved volume and realization, and FMCG segment growth was primarily volume-led. For this particular quarter, the HALS monthly sales volume scaled to 125 tons per month for the HALS series, which is 770 and 701 put together. A little bit on the CapEx. We have incurred a CapEx of about INR 100 crore during quarter 1, which was primarily towards investment in subsidiary. We are on track to commercialize the production of the pharma intermediate by Q3 FY25. Further, on the new CapEx, we are very excited to announce that we have organically designed a novel process for manufacturing a Performance Chemicals segment product. Led by the positive outcome of pilot run, we have started the construction of the production block. The plant, the total CapEx towards the production block at our subsidiary is estimated to be INR 150 crore, and the plant is expected to commercialize by H1 FY26, with a capacity which could address 15% of the market demand. Let me speak a little bit on ESG. Led by our resilient performance during the last year amidst volatile business environment, CRISIL has reaffirmed its long-term rating at CRISIL AA- stable and short-term rating at CRISIL A1+. We are pleased to announce additional investments towards setting up 6-megawatt solar plant, which will moderate our power bill and enhance our green footprint. We will now... Thank you so much, and we can now open for questions and answers. 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 Sanjesh Jain from ICICI Securities. Please go ahead. Yeah, good afternoon. Thanks, Siddharth, for taking question. A couple of questions from my side. First on the HALS volume, I think last quarter we used to operate on 200 metric ton, and this quarter we are at 125. Is that right understanding? No, I don't think, the understanding is right. We had touched about 80-90 tons a month, which now we have at about 125 tons a month. 200 is aspirational. 200 is aspirational. I mean, eventually, we want to reach 200 by March 2024. Okay. Okay. Sorry, sorry. I got confused between the guidance for March 2024 and this. No, that's fine. And second, on the CFCL side, if I deduct the consolidated minus standalone, the number what I get is largely CFCL, where we have been INR 67 million of revenue and INR 22 million of gross profit, which implies a gross profit margin of 33%. Is this a representative margin for the HALS series? No, this is for the- 7, only one product. This, see, right now, we have only commercialized one product, right? 770. Correct. That, too, also, it is on a very limited capacity utilization. As I mentioned in the opening remark, the three more products, 622, 944, and 783, is just commercialized over the last 2 to 3 weeks time frame. Okay. Now these will also start picking up. An additional 119 will pick, will start by August second week. Fair enough. Siddharth, can you just talk about the application for all these four new HALS series, what are the applications for them? These are wide variety of applications. These are called Hindered Amine Light Stabilizers. Got it. So, you know, the 770 would be usually used in master batches, whereas the 944 would be used in agricultural films. So, you know, they have, all of them have variety of different applications. 292 would be used in coating industry. So depending on the price, depending on the application, all of them have a different application base. And offline, we can connect to give you the entire scenario of each product and their application, because each one has variety of applications. Fair enough. That's fair. I will, I will connect separately on this. Just on the America side, the revenues have been declining for last 3-4 quarters, while it was very strong in FY 2023. What has changed in America? In? In America. In In America. In America. Oh, in the U.S.? Yeah, in the U.S. There is nothing specific. Of course, overall, there was the highest destocking, was there in the U.S. because of the geographical, you know, the transit time distances. So, you know, the destocking took longer compared to other parts of the globe. But other than that, there is nothing significant to pinpoint here. Like if you see our Europe business grew. Fair enough. So we were able to onboard some new customers and some of the U.S. entities who are also offices in or manufacturing blocks in Europe, probably preferred to produce more in Europe compared to the United States. And then, Siddharth, on the two pharma CapEx, which we spoke about in the earlier call, we were- One pharma. We said 2, 1 in August to May, the other 1 in September, each with a potential CapEx of 1 billion rupee, which is 100 crores. No, no, no. So one is Performance Chemicals segment, not pharma. Okay, let me re-explain. So there are three CapExes. One underway, which is pharma intermediate, which will start by October, November this year. This is INR 30 crore. This is INR 30 crore, correct. After that, the another one is the performance chemical segment, which I just explained, the construction has begun. Okay. Which is a CapEx, INR 150 crore. Mm-hmm. Again, here, the variety of application, but we will turn it into a performance chemical segment. Okay. The third one, where the CapEx should start in September, the construction, again, could be about INR 100 crore-INR 150 crore, and that has, again, probably it will also form and fall under Performance Chemicals segment. Okay. And the one we have started, we said that we will be to start with 15% of the market. You are referring to India market? Which one? Performance segment, which we have started the construction. So that is. Go again on that question. So you said that you will be 15% of the market when you will start this CapEx. You are referring to India, 15%, or the- Global, global capacities. Always global capacity. Okay, we will be 15% of the global capacity. What will be the total revenue from this? See, the total revenue should be closer to INR 350 crore. Okay. Okay. Major application will be? There is, again, variety of applications, but you could consider performance chemicals could be the sub, I mean, the major bucket where you can put these products into. No, no, I was more looking at what is the end industry application: agro, pharma, auto, polymer, stabilizer. These are again stabilizers, you can assume, and also. Okay, polymer. intermediates for pharma. Okay. So basically polymers and pharma. Yes, sir. Okay, okay, so this is a global, so for India, we will be the sole producer of this product, right? No, no, no. There are some companies who are manufacturing it. Okay. There are already some companies manufacturing it. Got it. Yes. But it would be a differentiated technology. When we say differentiated, we generally mean continuous flow, right? It means that the economics could be better. Commercially, it should be better. Okay. Fair, fair enough. Yeah, that's it from my side. Thanks, Siddharth, for answering all the questions, and best of luck for the coming quarters. Thank you, sir. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah. Hi, Siddharth. Thanks for the opportunity and congrats for the decent set of numbers. Just continuing with the CapEx bit, a clarification there. So there are three CapExes. All the three are in pharma products. Will that be right understanding? No, no, not right understanding, Ankur. First one, INR 30 crore pharma, second one, performance, third one would be into another segment, but not pharma. Okay, and- Pharma to pharma, to put it simply. Sure. Sure, and the third one is the one, which, if I'm not wrong, we alluded that wherein we are doing some work at the pilot and R&D stage, and, you know, we'll decide whether we go ahead or not on that. Yes. Now we have decided to go ahead. Sure. And any thoughts on addressable opportunity for that specific product or segment and where it is, you know, the end use applications are? Again, it is a very large segment, and you could consider it into like a water treatment chemical. Okay. And, any broad thoughts on, revenue size opportunity, both, you know, at the global scale, for these products? Just trying to understand, you know, the size and scale of what can get generated there. I have mentioned about INR 300 crore-INR 350 crore. On the INR 150 crore CapEx, yes. Going on. From the third project, it is, the working is still going on. So let me work a little bit more and get back to you with firm numbers. Okay, sure. While the second, the INR 150 crore CapEx that you mentioned, there are other, you know, producers of those products in India. For the third one also, that is the case or, it's... Sorry, I missed that part. Yes, there are producers in India. Okay, great. Secondly, on the volume-led growth, you know, across more or less on all the segments there, just trying to understand whether, you know, this volume-led growth was led by one or two products, or it was decently widespread across our portfolio? No, it was widely, I mean, so spread across the portfolio. Okay, great. And just lastly, on the capacity utilization side, where are we now across, you know, performance and pharma and FMCG? Between 60%-65% capacity utilization. Across all the segments? Sure. And just last... Yeah, got that answer. So just last bit, you know, there was some pressure on the realization trends earlier. And, you know, since last two quarters, we have been seeing a decent uptick there. Will it be fair to say that most of that pain is behind us, and probably things are either improving or stable across the products? Stable. I am not seeing any increase in prices would be possible for the next 2 or 3 quarters. Okay, but demand is picking up, or it is pure, pure market share gain that we are, you know, witnessing here? Yes, yes. Volume-led growth is happening. Realization, there is no growth. I mean, they are all steady numbers on Q-on-Q basis. Okay. Fair enough. That's it from my side. Thank you, and all the best. Thank you, Ankur. Thank you. The next question is from the line of Arun, from Avendus Spark. Please go ahead. Hello, Mr. Arun. Your line has been unmuted. Yeah. Please go ahead with your question. Thank you. It is Arun from Avendus Spark. Good evening, Siddharth. Thanks for the opportunity. So, first on the domestic front for the HALS, you said we are on track on 25 tons per month. What we understand is the domestic demand market for this is around 250-300 tons per month. Given that, the market share in India is somewhere around 50-60, so does it mean we have saturated the domestic demand for this product? First of all, 125 is not domestic. It is, in brief, I mean, India plus export. Of course, export is a very small portion, but it is both. And no, I mean, there is still quite room, and I think we still have to cover a lot of ground in India. So I think it will take a little bit more longer, because a lot of large players were also waiting for the other HALS product to start. Because, I mean, they always had this thought that they were only buying one from us and balance two or three from the competitor. So once we have the full basket, they would be able to switch more or less everything if our quality is at par. So I think with the entire basket coming in, I, I have a feeling, strong feeling, that now the conversion, or, I mean, customers converting to us would be far better chances compared to what we had with just one single product. Right. So, other grades should help you to scale up, but, is it, what is the, what is the target? We are targeting 100%, import substitution, or what is it we can aspire to be? Has the customer indicated anything like how much they will take it from us once all these grades comes in? See, no customer commits anything, but we typically aspire that we should have 70%-75% of Indian market because of variety of reasons, you know, compared to what people are importing. So the aspiration is to have 70%-75% of Indian market, and of course, then grow in Asian, American, and European markets, which now has started picking up. Because, again, the same issue, a lot of customers were reluctant to only test one product. Now, with the basket, they have that confidence that, okay, now we can look at, you know, buying mixed container rather than buying just one single product. Because also, Arun, like, all my competitors make the entire range, so we were the only ones, we had only one product. Of course, that was how we started, but the design is to have all the products in the basket, so we are at par with our Chinese and European competitors. Right. And HALS, if I'm not mistaken, Siddharth, the range of product will include close to 10-15 different grades? Including blends, yes. Okay, but excluding blends, how much is our coverage in terms of five out of how many products? Nine. 9. So, so we'll be still, the remaining 4 is still working, but under progress, or we will take, we will- 4, which we have commercialized, 4, 5, these are like the bulk products. These are more very specific niche, very high, but these are now upwards of $15, $13 products, which will now come up in the phase two. Okay. So major roadblock that stopped us from scaling up is now clear with the introduction of these three products. That is my understanding, right? Four products. Yes, your understanding is right. So with these four products, we have covered a basic... You know, these are like the basic HALS which are needed by all the customers. Then it becomes very, very specific, that some need this number, some need that number. But that also we want to start so that, you know, we can also target some niche customers, and these are also more profitable products compared to the regular HALS. What is the current going rate? What is the premium realization for these compared to, say, 770 or 701, Siddharth? I'll have to work once we get out of the plant scale. But these are decently priced product. And see, the point is these premium HALS are upwards of $15, but then the market size is also smaller. No, no. Not when you say $15, it is for 622, 944, and 783, or? No, no. These are all below $10 products. Okay. But the newer ones, after these four ones which will come up, which I said are niche products, these are upwards of $15 products. Okay, okay. No, I was wondering about this 622, 944, and 783. It will be much higher than the 770 and 701, right? That differential I was inquiring about. 622 is more or less similar to 770. But yes, 944 and 119 are twice the price of these products. Understood. Understood. Upwards of $9 each. Understood. Thank you very much, Siddharth. All the best. Thank you, Arun. Thank you, Arun. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Jason Soans from IDBI Capital. Please go ahead. Yeah, Siddharth, thanks for taking my question. I just wanted to ask you that, the last time around on the call, you had mentioned that, you know, for HALS, we are looking at a 3,000-ton around the 3,000-ton sales volume for, by 2025, with an average $8 realization for, for the entire basket. Do we still stick to that, I mean, that sort of that, ballpark variance? No, because see, our overall capacity installed would be around 9,000-10,000 tons, which I think over the next 3-4 years, we will ramp up to take it to 80% capacity utilization. So our 8,000 tons would be the ideal capacity utilization spread over 3-4 years, so roughly 2,000 tons a year. So roughly 150-180 tons per month, starting, we should start achieving now going forward. I mean, of course, let a quarter go, because we thought that just started commercial production, but probably in the next 3-4 months' time, our target is to touch 150-200 tons a month of all put together. ... Okay, okay. So for FY 2025, we probably 2,000 tons would be a fair, fair kind of volume assumption? Yes, yes. For all of them put together, yes, right? Yes, yes. Right assumption. And for FY 2026, would you like to, I mean, any kind of rough growth where you can see HALS going, considering that we have a 10,500 capacity, what's the total capacity, I believe, for HALS, you have at CFCL. So, 2,000 starting with the 2026, probably what you can do in your view? See, in my view, being aspirational, and of course I have to push that. Yeah. But we would be around 2.5-3 thousand tons more. So 2 + 3 sort of, 2.5, 3. So about 50% capacity utilization, which would, we should achieve by FY 2026. Okay. Realization's probably at $8 is a fair assumption as of now, for the average, for our average of the entire market? Yeah, yeah, $7-$8. Okay, okay. Sure, sure, Siddharth. And Siddharth, in terms of, I mean, when you look at HALS, you have of course said that you will also look to target towards the export markets as well. So how do you see the Chinese competition playing out in that or are we very cost competitive as compared to the Chinese players? See, because today our, it's a very large facility and the base is too high, I mean, you know, in terms of cost. Hence, until we reach a proper scale and size, you know, it will be difficult to be cheaper than the Chinese. Because today we are at, running at probably less than 20% capacity utilization, whereas I am competing with people who have been in this business for 15 odd plus years. So you will have to give me a couple of quarters to, you know, to reach a, a typical mass or volume- Mm. Where I can cover a lot of my fixed costs, and then I think the margins will start coming in. Sure, sure, sure, sure, Siddharth. But, roughly you had said that probably, you know, when we start, you will come out, probably margins will be around 15% levels, then as the capacity ramps up, it can reach 25% levels. So that stands kind of? I'm still with that statement. Yeah. But 15% cannot happen with only 21% capacity utilization. Right, right, right. Absolutely, absolutely. Capacity utilization to come up with this margin. You are right. Yes, sure. Sure, Siddharth. And, I also wanted to know, Siddharth, of course, we are focusing on, you know, looking at more growth from the non-primary products, which is MEHQ, basically. So how has that growth been in this quarter, from DCC, TBHQ? See, all the other products are now growing. I think the volumes have come back. Mm. I mean, individually, I cannot give you a number right now, but typically all the products have been; we are running at 70% plant capacity utilization of all the products, 65%-70%. So we are recently covering up, and of course, with these new products like DCC and TBHQ, which you just mentioned, still there are more new customers being onboarded as we move along. Okay, okay. Sure, sure, sure. And just one last one from my side. I just wanted to understand the CapEx, which you had said, the last one, which you are starting in September 2024. I believe that also will be at CFCL. This is for performance chemicals, and that will basically cater broadly to the water treatment segment. Of course, revenue projections you will give later, but this is broadly the thing. Is that right? Yes. The third CapEx, which you mentioned. Of course, there's pharma intermediate, INR 30 crore. Then there is a novel process which is going to performance chemicals, CapEx of INR 150 crore and expected to commercialize the H1, 15% of demand, and then this is the third one which will basically cater to water treatment, right? 150, 150 and 30. Okay, this also is at 150. Okay. The third one also is INR 150 crore CapEx. Yeah. This you are looking at INR 150 crore, and this is also probably the third one also, you're looking at more import substitution demand. Would that be a right understanding? You could say that. Yes, sure. Sure, Siddharth. Okay, that's all from my side. Thank you so much. Thank you. Thank you. The next question is from the line of Krishan Parwani from JM Financial. Please go ahead. Yeah, hi, sir. Good evening. Congrats on good set of numbers. Just a couple of questions from my side. Firstly, in Q1 FY25, you mentioned there is INR 100 crore CapEx, so where was it spent? It was investment in subsidiary company by the parent company. Oh, okay. Okay, understood. Yes. Now with all the CapEx, what will be the gross block of HALS? I mean, that was what, INR 330 odd crores, right? There's no incremental CapEx in the HALS. Oh, yes. So we have infused total INR 435 crore into a subsidiary as of date. Mm-hmm. Okay. Understood. So that, but the fixed asset that you have for HALS is INR 330 or so, or is it INR 430? Fixed assets overall, as of now, the number could be in the range of INR 350 crore. Okay. Just on pharma intermediate side, so I think you've highlighted that the commercialization will be done by the third quarter of this year. So are the samples approved by the customer or is it still ongoing? Yeah. The pilot samples are approved, but some of the customers, because not all pharma customers are okay testing pilot samples, they need commercial samples. Understood, understood. And just last bit, on the, you know, on the legacy products, do you think you would have fully utilized your, capacities, by FY26 of all the- ... you know, prior to the health, whatever products that you used to have, or you still have? Some of the products, there is a possibility, but in that case, again, we will make investment in subsidiary CFCL and rebuild those facilities. So I think that decision we will make by end of December. Understood. Understood. This is good. Thank you, sir. Wish you all the best for the coming quarters. Thank you. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah. Hi, good afternoon, Siddharth. Thanks for the opportunity. Just on HALS, so what about 701? I, you know, didn't hear much about that in our recent discussion. So, you know, any-- are we selling any of that or is that sort of not on the agenda as of now? 701, we are already at 70% plant capacity utilization. We are exporting to Europe, US, you will see very shortly. We have also exported it to China, where there are already, I assume, 4, 5 producers, and India, of course. So I mean, it is a very good product for us, and we aim, looking at this, if, if this continues, very shortly we will have another facility to make 701 in our subsidiary. Okay. Okay. The reason I asked is, I thought in the opening remarks you had mentioned that this quarter we reported sales only for 770. Is that only from CFCL? Is that what we meant to convey? Subsidiary. In subsidiary, in subsidiary, there is no 701. Okay, okay. I, I get, I get it. Got it. Okay. So second thing was just, I'm sorry if I've missed this in the past, but just in terms of year-over-year and quarter-over-quarter, possible to help us with the breakdown between volumes and prices for the quarter? Yeah. So Abhijit, on year-over-year basis, it's largely volume driven. In fact, realizations have offset the growth, and quarter-over-quarter basis, it's fairly steady. Okay, got it. We have seen a decline in the realizations, and that has offset the growth, but volume has pulled it off. Got it. Thank you so much. Siddharth and Pratik, all the best. Yeah. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity, and congrats on decent set of numbers. First question is in terms of our product pipeline. So now that the health area has been completely tapped, and there are a few more products for which we are doing the CapExes, how does the pipeline look like, and which are all the areas which we are currently working on in terms of user applications? Thank you. So in terms of future product pipeline, we just discussed two large CapExes totaling INR 300 crore. And again, the sector remains performance chemical, intermediates for pharma, agro, water treatment, and FMCG chemical. So the universe remains the same, and three hundred crore additional CapEx is planned, I mean, within, which will be done within FY 2025 and a little spillover to FY 2026 first half. And in the meantime, of course, whenever there is more opportunities which come up, I mean, because we are working on few more products in R&D and pilot. As and when these go ahead, I will discuss it, during the earnings call. Yeah, I understood the first part. I was referring to the products which are currently in, say, R&D and pilot. So which areas we are looking at, in terms of the user application? Will it be the same areas as currently we are working on, or will it be different areas in terms of user segment? No, I think we are very similar to Performance chemical, Agro Intermediates. Pharma Intermediates in particular is big for us. So I think the segment remains the same for us. Got you. And second thing, in terms of the subsidiary, if I recollect clearly, probably the space that we have we can accommodate INR 1,000 crores of CapEx. Was that the number correct? And we are currently probably having maybe INR 300 crores-INR 400 crores of projects which are commissioned and which are in pipeline. Just to confirm. Thank you. Yeah, I think you're correct. Okay. Thank you so much, and best of luck. Thank you. Thank you. Thank you. The next question is from the line of Arun, from Avendus Spark. Please go ahead. Yeah, thank you. Thanks for the follow-up. Yeah, just some questions. What is our current utilization in our core business today, say, across MEHQ and BHA and other core products? Arun, rather than going product-wise, I think segment-wise, FMCG is highest. It's close to 80%. Performance and pharma is in the range of 65%. In performance segment, it's little lower because of HALS capacity, which is largely underutilized. Yeah, yeah. Pratik, just a quick question. Can you just break the performance into excluding this core as core, which is excluding HALS and our traditional partners? No, so that will tantamount to giving product-wise utilization, which we are not very comfortable with. Oh, okay. Ex-health, if you can give, because just wanted to understand how is our Yeah, so ex-HALS, it's in the range of 70%, which is largely basically the four products, MEHQ, BHA, AP and TBHQ. Okay. So, how long will we be taking to saturate this capacity for that is 70, becoming, say, 85-90? What is the time frame that we, that is, behind me? Yeah. So I think probably we will have to really gather this information, and I said that probably by end of this year, we will evaluate whether there is a need to set up. I think one of the time it would be, but when should, when it would be the right time to set up additional capacity of these, MEHQ, Guaiacol, anisole, we will, I think, take a call definitely in the next six months time. So, basically, we will wait for the competition. That is what I can interpret. Wait for competition before we [inaudible]. That's, that's the idea behind it? No, I don't know. We are not waiting for any competition. We are waiting for our own evaluation to see whether the market is able to absorb these capacities. What should be the capacity for the next installations. Right. Understood, Siddharth. Thanks, all the best. Thank you. The next question is from the line of Surya Patra from PhillipCapital India. Please go ahead. Yeah. My first question is on unabsorbed cost that would be there because of the new capacities. So could you quantify that? Because my point is, in fact, on a consolidated basis, although we are saying that our new capacities are currently not optimally utilized, and hence there would be a kind of impact that our consolidated business will be facing. But despite that, we have seen a consistent improvement in the margin in the consolidated business. So that means that something is really driving despite the kind of business challenges that we are witnessing for the industry at this moment. So what is the unabsorbed cost, and what is, in such a situation, what is on the core business front, driving this margin sequentially? So basically, I mean, the parent company is doing well. I mean, this is again on account of the new product addition, on account of improved yields, efficiencies, on account of reduced raw material prices. So these are the various factors why the parent company is still doing well. And of course, the subsidiary, as you rightly said, is still, I mean, of course, because this is the first working quarter, is at loss because of the heavy duties which we have already earned it. Exactly, sir. Is it possible to quantify, sir, for like, what is the, let's say, the EBITDA level, what is the kind of hit that you would be facing for the new business? For subsidiary, apart from raw material, we have incurred employee expense, power, other expenses, which is in the range of INR 5-6 crore. Okay. Okay. And then for the existing business or continuing business, this margin expansion, you said on the revenue front, in the prices front, there is no sequential improvement, that is flat. And on the cost front, sequentially, there is no reduction, rather it is slight improvement or stabilized price. So then, is it the volume growth that is helping out to showcase slightly better margin? Yeah. Because the cost is getting absorbed. Absorbed, yeah. But, at gross margin level, it's fairly steady. 34.4% was RMC for Q4, and this quarter is 34.1%. Sure. It's basically EBITDA, which has gone up because other expenses have come down little bit. Okay. And do you see really, in terms of the, demand recovery or demand for the existing product as well as the new product, is it, it is a kind of sequentially, let's say, 10% kind of better or 20% better, some sense in terms of the demand, improvement that you can talk about? No, so the demand is sustainable. You can see on quarter-on-quarter, the volume growth is happening, and of course, we are aspiring to take more and more volumes going forward. Of course, sir. Mm, okay. I mean, I wanted to also have a sense, so whether it is like a, what is the intensity of the demand recovery or let's say, demand improvement that you are witnessing? It is sub 10%, better than 10%, or any sense on that end. On year-over-year basis, if you see the entire demand, I mean, the entire revenue growth has only happened on volume increment. Correct. Prices have remained lower only. Yes. Yes. Okay. Sure, sir. Thank you. Wish you all the best. Thank you. The next question is from the line of Tarang from ValueQuest. Please go ahead. Hello. Thank you for taking my question. I just needed a better clarification on the third CapEx that you mentioned, which is towards the water treatment chemical, INR 150 crore, as what you have said. Could you just clarify the timeline for the construction and commercialization for this project? Typically, it is a 10- to 12-month process for us, from construction to plant erection to water trials. So assuming we start in September or October, you can add 12 months to that. ... Yeah. Okay, thank you. Thank you. Thank you. The next question is from the line of Jason Soans from IDBI Capital. Please go ahead. Thanks for the follow-up. So just wanted to understand one thing. Actually, I was under the impression that all the HALS products are coming through CFCL, but you just mentioned that in the subsidiary there is no HALS 701. So how does that work out? Just wanted some explanation on that. So there were two typical HALS 770 and 701, which we originally started in Clean Science, which we started in February 2023. But of course, the capacities were very small, but that also helped us to build these large plants in the subsidiary. Okay. But 770, we have replicated, and 701, we have not replicated. Okay, okay. Sure. So 770, you have replicated. So the sales which we see from CFCL is only 770, the INR 67 million which has come, right? Yes, sir. That's it. Okay, sure. Sure, sir. Got it. Thank you so much for that clarification. Thank you, sir. Thank you. Thank you. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Siddharth Sikchi for the closing comments. So thank you so much all of you for taking time out to understand the company. And, I would... I mean, that's all from my side. If there are any further questions, people can connect with me or Pratik or Palnitkar Ji for any offline questions you might have. Thank you so much. On behalf of Clean Science and Technology Limited, this conference, thank you for joining us, and you may now disconnect your lines. Thank you.