Ladies and gentlemen, good day, and welcome to Neogen Chemicals Q1 FY25 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 star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nishid Solanki from CDR India. Thank you, and over to you, sir. Thank you. Good evening, everyone, and welcome to Neogen Chemicals Q1 FY25 Earnings Conference Call for Analysts and Investors. Today, we are joined by senior members of the management team, including Dr. Harin Kanani, Managing Director, and Mr. Ketan Vyas, Chief Financial Officer. We will commence the call with opening thoughts from the management team, post which we shall open the forum for Q&A, where the management will be addressing queries of the participants. Before we commence, I would like to share our standard disclaimer: Certain statements made or discussed on the conference call today may be forward-looking in nature. The actual results could vary from these forward-looking statements. A detailed disclaimer in this regard is available in Neogen Chemicals Q1 FY 2025 earnings conference, earnings presentation, which has been uploaded on stock exchange websites. I would now like to invite Dr. Kanani to share his perspectives. Thank you, and over to you, sir. Thank you for joining us on our first quarter earnings call for FY 2025. As always, I begin by sharing my views on the performance and strategy, while Mr. Ketan Vyas, CFO, will take you through the financial highlights. Neogen Chemicals has demonstrated a strong start to the new year, with healthy improvement in both top line and profitability matrices. Despite easing pressure, the business landscape was still marked by challenges, including low China demand and price, economic uncertainties, and supply chain disruptions. In response to weak global agrochemical markets, we strategically shifted our focus to non-agrochemical applications, which offered more stable demand. We overcame severe logistic hurdles through robust supply chain management, solidifying customer ties. Both BuLi Chem and Neogen Ionics have made positive contributions to the consolidated performance. Let me quickly summarize the key financials for Q1 FY 2025. Our consolidated revenue stood at INR 180 crore, higher by 9% year-on-year, while EBITDA came in at INR 31 crore, an increase of 10%, translating to EBITDA margin of 17.1%. Profit after tax stood at 11.5 crore, representing an increase of 18%. Mr. Ketan Vyas will share more insights on the financial performance. Turning your attention to the segment, our segmental performance, in Q1 FY2025, organic revenue stood a growth of 17%, while inorganic revenues declined by 14%. Both bromine and lithium raw material prices significantly declined during the period. Adjusting for this fall in bromine prices, the organic revenues would have been higher by INR 14 crores in Q1 FY2025. Likewise, inorganic revenues would have been higher by INR 27 crores, if not for the steep fall in lithium prices. Moving on to our expansion initiatives, the initial capacities of both lithium electrolyte salts and electrolytes is up and running. Out of 400 metric tons per annum capacity of electrolyte salts and additives, we have commissioned 200 metric tons per annum and started shipping commercial quantities to international customer based on approvals received. Out of 2,000 metric ton electrolyte plant, 200 metric ton per annum has been commissioned, and trial quantities have been dispatched to three customers. Their approval is underway. Customer feedback pertaining to product quality and efficiency has been favorable so far. As a result, we are hosting many domestic and international clients to our facility for product inspection and approval processes. These capacities will cater to the immediate needs of customers and also provide valuable market insights. With respect to our greenfield battery chemicals facility using MUIS technology, I'm glad to share that we have achieved financial closure for bulk of the CapEx with favorable terms. Construction work has already commenced and will remain on track to strategically commission this facility in FY 2026, aligning with upcoming battery capacities in India. We anticipate two major battery manufacturers starting productions this year and are engaging in long-term electrolyte supply contract discussions. Our strategic hiring in battery chemicals is nearly complete, and close to 70-80 employees are focused on the project execution alongside ongoing phase one production. We continue to see strong demand for non-Chinese supply of lithium salts and electrolytes from de-risking standpoint and have and accordingly initiated discussions through MOUs, pricing commitments with international customers. In a boost to Indian battery manufacturers, custom duties on critical minerals such as lithium has been exempted. This is expected to reduce production costs for batteries and consequently, the overall price of electric vehicles, and will also benefit and make Neogen electrolyte more competitive. We remain positive on electrolyte opportunities in India. As one of the first Indian companies to supply commercially produced, meeting global standards electrolyte, we are pleased to contribute to India's vision of becoming a self-sufficient lithium-ion battery manufacturing hub. Our future growth strategy centers on scaling up organic and inorganic chemical operations with high emphasis on CSM and advanced intermediates. Our R&D focus on innovation, coupled with strategic push into battery chemicals, will be instrumental in achieving this. Neogen also forayed into semiconductor material supply chain during last quarter, developing some specialty gas products as well as liquid products required for semiconductor applications. While navigating present macroeconomic challenges, we remain optimistic about the Indian chemical industry's long-term exponential growth prospect. We intend to harness this potential to create enduring value for our stakeholders. That concludes my opening remarks. I would now request our CFO, Mr. Ketan Vyas, to share financial highlights for the period under review. Thank you, Dr. Harin. Good evening, everyone, and welcome to the Q1 FY 2025 earnings call. I will take you through the key financial highlights. Please note that these are on consolidated basis and based on year-on-year comparison. In Q1 FY 2025, revenues increased by 9% to INR 180 crore. Despite challenging operating conditions, this growth was volume driven, primarily due to higher contribution from non-agrochemical products amid repricing. Organic chemicals saw 17% revenue growth, reaching INR 142 crore, while inorganic chemicals experienced a 14% decline in revenue, totaling to INR 38 crore. As explained by Dr. Harin, the revenues would have been higher but for decline in prices of both bromine and lithium raw materials. The revenue mix between domestic and export was 73% and 27% respectively. EBITDA rose by 10% to INR 30.8 crore. The increase occurred despite higher employee costs and other expenses, aligning with capacity expansion initiatives at Neogen Ionics. Margins were maintained at 17.1%, supported by operational efficiency, even though there was continued pricing pressure across key products. Profit after tax came in at INR 11.5 crore, an 18% increase. This strong operational performance was further enhanced by lower tax rate. Depreciation and interest expenses are expected to rise due to accelerated capital expenditure in battery chemicals. That concludes my initial remarks. I will now request the moderator to open the forum for Q&A session. 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 phone. If you wish to remove 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. Our first question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah, good afternoon, and, thank you so much for taking my questions. Dr. Harin, to start with a couple on the battery chemicals business. One is, what's our line of sight into the new battery capacities coming up in India over the next, 12 to 18 months? So far, we've heard, maybe announcements from maybe three, you know, major, battery makers, Ola, Exide, and Amara Raja, but haven't heard, much from the others yet, at least as far as I'm aware. So how do you see, you know, the capacity coming up in India and, will you sort of have the confidence that we'll be able to sell out our 30,000 tons, by the scheduled, timeline of, say, 2H FY 2026? Or, you know, could there be a need to maybe delay it a little bit to match with the customers' plans? Thanks for the question. So as you mentioned, you know, for the electrolyte, you have already three battery EV manufacturers like Ola, Exide, and Amara Raja, and as you mentioned, they are likely to start in the current year and next financial year. On top of that, you know, there was also Reliance, which is expected to start in the next financial year, and also there will be Lucas TVS a little bit later down the line. From the point of view of achieving 30 KTA full utilization level, you know, the main target was FY 2028. So by FY 2028, we also expect that there will be JSW as well as Tata, who have also announced their intention to both get into battery manufacturing. Both of this, one - at least one of them or both would have started. And we also expect some smaller battery manufacturers who are making for electronic applications as well as, you know, home usage and some niche applications, who also are planning to set up their shops. Even these would start some, some of them would start in the current financial year, and some would start by, let's say, FY 2025, by 2025, 2026 calendar years. So we feel confident that our target to reach by FY 2028, or 2029, full utilization level, that continues to remain, and we are on track to do that. Like, I still feel that our target, that we will need more than 2,000 metric ton capacity in FY 2026. So by second half of FY 2026, we would need, let's at least 5 giga or 10 G kind of electrolyte support. That is my expectation. So we would at least for now, what it looks like, we would be on track to bring the electrolyte capacities online in the second half of the financial year or in the second half of next year's FY 2026. So that would be still on track, and we don't see any reason to delay it so far. Got it. No, that's, that's great. And then on the pricing front, China electrolyte prices are somewhere in the ballpark of $3 a kilo, I believe, at present. So, how do we sort of negotiate the pricing with our customers? You know, what sort of discussion do we have, around the construct there? So, you know, I would not like to discuss specific numbers, because when you go to China also, there are range of electrolyte prices, depending on the quality and the formulation that you are actually looking at. And the second point is, those prices, the China price would be in China, so you would also need to consider and factoring whether those electrolytes can be brought to India. And when they come to India, you know, what would be the final delivered landed prices of these? And in some cases, it's almost like just from a logistic point of view, it's very complicated, especially when your volume becomes like, you know, thousands of metric tons. It becomes very complicated to just manage the logistics. So just from the criticality point of view, also, like, you know, you would have to basically make sure that the electrolyte would have to be supplied from India. So I think when we are discussing with our customers, even our customers know that, you know, prices in China will fluctuate. They are more keen to understand that, you know, after accounting for all the raw material fluctuation, the contribution which Neogen is bringing in. Is that, like, you know, what is that? And is that competitive across what they see internationally? And so far, the answer to that has been yes. We've also done many simulations for our customers, wherein, you know, the Chinese price also goes through crazy low and crazy high. So overall, like, you know, when they look at, like, a three-year, four-year kind of point of view, having a more stable, formula-driven price is much better than, you know, just spot buying of something as critical as a electrolyte. And most of the customers have also acknowledged that, and they've seen that, and that is basically driving the discussions. Thanks. That's really helpful. Just one last thing from my side before I get back in the queue. With regard to the salt sales into the international markets- Yes. Any sort of, you know, feelers from your global customers regarding, you know, whether there would be any change in their plans in the event of a Trump presidency? Could there be some changes to the Inflation Reduction Act or, you know, just some changes to the battery demand outlook or something like that, if a Trump administration came to power? As far as the talks I am having with the customers, at least most of the customers are looking at Neogen, of course, as a IRA fulfilling act, but they are also looking as, you know, decoupling from China and having an alternate to China. So, you know, some of the agreements which we've signed with this customer, while the volumes are not committed, but the prices, like, you know, again, formula-driven prices, using the same rationale that we have seen earlier. And most of even though they are currently much higher as compared to China, but they understand that, you know, India has its own dynamics. And outside China, they still see Neogen as one of the cheapest source. So they are more focused in that Neogen being the cheapest source outside China, they would like to engage and at least buy certain amount of their quantities from them. So we've not seen them, you know, reduce the numbers or the demands that we were talking of. We still see them interested to buy from Neogen as an alternate. So I think the initial capacity which Neogen is setting up of, like, you know, 5,500 metric tons of electrolyte, and even in the beginning, part of it we internally consume. The question is not whether that capacity can get filled, the question is: How fast we would have to increase, depending on what percentage of volume we will get in the international market? Because, you know, as we've shown in our international, in our presentation also, the demand in the international for the salt is very high. So if we can maintain our position to be the cheapest source outside China, and, more and more customers sees value in having Neogen as a completely China-free supply chain, IRA compliant, and in absence of even IRA, like, basically as a backup source for their supply chain surety. You know, how, how many customers see the value, and how fast we would have to add more capacity beyond what we are currently planning, is the question. But again, first, the first, capacity has to come online. We need to give confidence to our customers that we can make, at large scale, the quality and at the cost which we are currently estimating, and then, you know, the discussions can go forward from there. Perfect. Thank you so much, and I'll come back in the queue for more. Okay. Thank you. Thank you. The next question is from the line of Jason Soans from IDBI Capital. Please go ahead. Yeah, so thanks for taking my question. So, basically, I know you have given some plans, you know, in terms of the funding for the battery chemicals business, but just now, so that the funding you've got the closure, just wanted to understand, I believe we had INR 1,150 crores debt funding plan for the whole CapEx of the battery chemicals. So just wanted more finer details on that. I mean, what could be the I believe the, the EMI will be start hitting from FY 2027 after the moratorium ends. So just some more funding. I also believe that you've got around INR 9 billion term loan from SBI as well. So some finer details on that would be, would be helpful. Yeah. So basically, we have, like, you know, we received from SBI for especially our Pakhajan and the greenfield site, where, you know, like, the greenfield site, we already received the funding for that. And again, it has a 2-year moratorium, and it has a 10-year repayment. The 10-year repayment, sorry, in that also 2 years first, no interest, no premium, no installment. Then after that, 1 year, only interest payment. And then after year 3, you start paying the installment back, and that, too, it is like, you know, graduated. So in the sense that it's not like 10% every year. In the beginning years, it would be around 4-5%, and then some of it will be backended, so it will be kind of ballooning. So I think it will, the repayment would start, you know, around the time where the electrolyte and salt plant would be close to running at full capacity. And, again, till the time the project completes, there is a complete moratorium on all interest payments, et cetera. Similarly, we have tied up with also one more banker, one more of our existing banker, which has also for our, expansion activities ongoing in Dahej, where also we have a 10-year kind of a period, where the first year is like a moratorium, because that facility will start producing faster. And then similar terms as SBI, where, you know, you start paying installment after another year, and then the interest, the some of the installments are also backended and not uniform. Sure, sir. So basically, what I understand is there's a SBI term loan of around INR 9 billion, and then, and the other one should be of INR 2 billion-INR 2.5 billion. Is that right? The understanding, right? Yeah. Out of that 2.5, we already secured around 100, so around INR 1 billion, another INR 1.5 billion under discussion. Okay, okay. 2 loans of INR 9 billion and INR 2.5 billion are there, right? Right. Okay. 9 and 1. 9 and 1. So 10 is there, 1.5 will, is, under final set of discussions. Got you. INR 1.5 billion is under final set of discussions. Mm-hmm. Okay. Sure. Sure, sure, sir. Mm-hmm. Okay. And so just wanted to understand also from, you know, of course, battery chemicals is a very crucial engine of growth for us. Now, I just wanted to know, along with the discussions, you know, whatever the initial discussions we are having, how far do you think we are from signing a concrete long-term contract with these battery manufacturers, you know, which will probably secure volumes from us, a lot of volumes for us in the electrolytes business? So how far do you think we are from that point? So, you know, as we discussed earlier, there are two or three customers who would be, basically needing electrolyte, let's say, in current, this and next financial year. At least I'm talking of the larger giga scale, as Mr. Abhijit mentioned, you know, Ola, Exide, and Amara Raja. All of them have a commitment that they want to localize. We have been like, you know, engaging with them strongly, especially, you know, in case of Ola, they also mentioned us in one of the news release. Yeah. We had also worked with them for last many years, developing different recipes to develop various recipes with them. So we worked very closely with them. So of course, you know, so we are still awaiting. So, you know, any Giga Scale production will go through first, you know, small 1,000-cell, then 10,000-cell trial, then maybe one trial run in the Giga plant, and then based on the outcome of that, you know, we can start discussing long-term contracts. So we are hoping that in the current and the next financial year, so in next, let's say, next 18 months, we should be able to convince, like, let's say 2 out of 3 or 3 out of 3 customers to basically sign up with Neogen and get into long-term agreement for electrolytes. Sure, sir. Thanks for that. Sir, just wanted to understand that, you know, you recently have incorporated a subsidiary in Japan. Mm-hmm. Just wanted to know, what is the rationale behind that? What are you looking at, you know, from that subsidiary? So, mainly, you know, so we, we are very fortunate that we are able to hire a very senior level person, who has many years of experience leading a Japanese agrochemical company in Japan as well as in India. So he's helping us with all our strategy and, our business development activities. So we felt with the number of, interactions which we are having in Japan for battery materials, then also for our CSM business and some other initiatives like, you know, related to n-butyllithium, some semiconductor-related projects. So we felt we needed a dedicated Japan team. So the main role is to basically develop, under the leadership of the senior person, Japan team, which can then work more closely with the customers, where, you know. So for example, before, some very senior level meetings would happen once in three months or once in five months when either me or Mr. Surana is visiting Japan. Now, you know, follow-up visits can be done by our Japan team almost on a monthly basis. So some of the things which would take six months, nine months, would now get, like, you know, happen in three months, six months. And also the customers feel more confident having the Japan presence. So this is the main role of the Japan subsidiary. Okay. Sure, sir. And, sir, in terms of, you know, we are recently hearing, you know, the volume sales in EVs, there's a slowdown happening. Probably, hybrid sales for hybrids, plug-in hybrids also are, probably, on the growth path, you know. People are looking at it, you know, charging infrastructure to be an issue, range anxiety, all these things are there. So just wanted to know from your perspective, how are you looking at it, if there is a, you know, some delay in these capacities coming online? So, just could you throw some color, your perspective on this? From basically what are discussions I have had so far, you know, we have to look at it in two way. One is the international business for salt and the local business, for electrolyte in India. So when I'm thinking of the electrolyte salt business in the international market, what I'm seeing is there already exists a market which is far bigger than the capacity that we are putting for our salt. So it's just a question of proving ourselves, proving that we are the best backup to China that they can have, and then depending on that, you know, what's that market share which you can get. Like, you know, IRA is one of the driving factors, but in addition to IRA, just having a backup to China, which is having low, lesser difference or the lowest difference as compared to China, is also of interest. So I think when I'm thinking of the international business, the existing capacity with which what we are starting is just to prove that we can make the salt at scale, at commercially, competitive prices, which are attractive to the customers. And then, depending on, you know, how fast the EV market will develop, you know, how much percentage of market share we can get in the international market, will decide, you know, whether how fast the 3,000 becomes.. Like, how fast we grow beyond the existing 5,500 metric per annum capacity. So when I'm thinking of that, I'm thinking, like, the factors which you mentioned, like range anxiety, plug-in hybrid versus pure EV, I mean, these are things which will play out, and that will determine how fast we will grow beyond the initial, let's say, 5,500 metric ton salt capacity, which we are installing. Now, when you think of India market, I personally feel that in India, like, you know, the energy storage, especially for renewables, is also a very good opportunity. So of course, EV is there, and we are seeing that two-wheelers and three-wheelers, there's very large and very fast penetration that continues. And we still are at a very low, like, you know, low contribution to the overall sales. So I think, in like two-wheelers, we are around 4%-5%, and in four-wheelers, we are at only about 2%. So I feel as more and more products come to the market, more and more customized products will come. I feel there is still a lot of room for, like, you know, just the EVs to grow. And on top of that, we have the energy storage demand. We have seen government also become more proactive giving, you know, the grid-level energy storage projects. They used to be around 100 MWh, then they would ask for bidding of 500 MW, and now there are some GWh-level bids also, which are happening. So more and more renewable solar, solar energy will also require this battery storage. So we'll have to again watch that, okay, depending on, like, you know, how well EV is accepted, will we be 150,000 metric ton kind of a electrolyte demand in 2030? Will it be 120 or will it be 250? And the jury is still out on that, and I think, you know, we'll have some idea on that in one year or two years' time. But again, for me, this is more a question of beyond FY 2028, right? What is the demand which we are looking at, and, like, you know, how soon we need to increase capacity, depending on how this plays out. Sure, sir. And just lastly from my side, just wanted to know, sir, broad revenue numbers, revenue EBITDA PAT for BuLi Chem, if you can give for FY 2024, and what is the outlook on that, you know, going ahead? So, you know, BuLi Chem has mostly one product. So for confidentiality reason, I don't want to give exact EBITDA numbers there. But, I would like to say that, you know, our BuLi business has stabilized. In fact, Q1 was better as compared to before, and in Q2 also, we are seeing a very good order book, where we feel we will be fully utilizing its full capacity. We also got, in principle, environmental clearance, so as we see one or two quarters more, with a very limited CapEx, we have an ability to increase capacity also at least two times by just some debottlenecking. So I think, so far, the way BuLi has been progressing, we are very happy with the progress, not only in India, but we have already started shipping our products to Korea and Japan markets, which was the first markets we had identified, and we are also seeing positive interest from, Europe as well as US. Also, in addition to the traditional pharma and agro business, which BuLi India was doing before our acquisition, we've also been able to improve quality, where it can now be used for semiconductor applications also in Japan and Korea market. So I think overall, it's moving positively, and we feel, you know, it will contribute well in the current financial year. As we had given also target, you know, INR 50-100 crores at full utilization levels, we feel in current year it will contribute in that range, at least 50 and more, I would say more closer to between 50 and 100, but more closer to INR 70 crores or higher by end of the year. Sure, sir. Those were my questions. Thank you. Thank you for answering those. Thank you. The next question is from the line of Archit Joshi from B&K Securities. Please go ahead. Hi, good evening, sir. Thanks for the opportunity. I just have one question, and specifically, you mentioned about renewable power earlier, which also seems a prospect for electrolytes and salts being used as a use case application. Sir, I think from what we have heard in the last few months, maybe quarters, that the scale of ambition of the government, at least in renewable power, seems to be far higher in terms of CapEx. And even the private CapEx over here has been quite high, and that having a use case in renewable power also becomes a big enough area for electrolytes to be put in use. What would be the scenario over there? I mean, the batteries in use in solar and wind maybe, are they fully imported? Why are we not participating in that particular application area? Given that the pace of CapEx over there is maybe much faster than what's happening on the EV battery side. So what would be your thoughts on that? Thank you. So, Archit, yes, I mean, I agree with you, and whatever I have also heard in trade conferences, we are seeing government being very active, and also they have realized that more renewable energy can come only with storage. So storage is a very critical component of that. In fact, some of the battery trade shows that we used to go to, now we are seeing some of the solar people come here because they want to understand, because battery is becoming a very critical component for renewable energy also to be successful. However, having said that, you know, this was always the plan. So even in the 160 GWh, kind of what we have projected, which was estimated by industry body, for around 40 GWh was already planned to be, for energy storage. So again, this was an estimate which was done two years back. I don't think people have put a revised number that how much it will be by 2030. But I think once, lot of policy measures which the government is discussing to support that, so once, like I think the industry gets clarity on that, we'll be able to say whether the 40 gigawatt hour can further increase. But, to be fair... I mean, to clarify, there's already a plan for that, so, but again, whether it can exceed that, so that's something which we need to still see. Also, I think, you know, even in case of Reliance also, they have shown that, you know, they wanted to use this because of their zero carbon kind of target, and again, their use case also was energy storage. Now, from our side, you know, it, it's almost the same thing. In fact, most of the people will use LFP-based kind of cells because they are cheaper cells. There are some small variations on the cathode and anode side, but electrolyte remains, in principle, remains the same, only, the additives can be a little less complex or something. So basically, our facility can basically take care of, like, you know, renewable energy, energy storage, demand of battery cells also. Understood, sir. Sir, just to follow up on the same thing, how is the supply chain working out to be over there? Because I'm sure that there's a lot of money being poured in these projects already. They also must have had some plans with respect to storage and all. So how are they dealing with it right now, given that there's no particular battery manufacturer in India? So, you know, same way as whatever EVs are doing today, that they basically, like, you know, import the cells and then the batteries are assembled here. And there are, like, some couple of companies which are specialized in that, and there are some which are even specialized not only to assemble the battery, but then put all these batteries together in a container, and that becomes kind of a module, which is then supplied to as a energy storage kind of module. So th ere are some companies which are also specialized there. And again, the expectation is that as India's cell manufacturing picks up, and again, I'm not very sure of Ola, because, you know, they have their own internal consumption and how much they are planning for energy storage. But clearly for Exide and Amara Raja or Reliance, energy storage is or even Lucas TVS, for all of them, energy storage is one of the market which they will definitely look at. Got it, sir. Thank you, and thanks for the clarification. All the best. Thank you. Thank you. The next question is from the line of Anirudh Shetty from Solidarity Investment Managers. Please go ahead. Hi. Thank you for the opportunity. I had two questions. So my first question was a follow-up to the last question around you know for hybrid vehicles. Just wanted to understand this more simply. So typically, between an EV and a hybrid vehicle, how does the consumption of electrolyte change? I know it would be different depending on model, but just as a rule of thumb, you know, how different is that? So, what we know, at least some of these hybrids use on the anode carbon along with LTO, so lithium titanate. And when they use that, the electrolyte consumption per gigawatt hour actually increases. So, at least some of the models of these hybrids, you know, in the past we said that the NMC battery would require 500 metric ton per giga, LFP, somewhere between 1,200-1,500 metric ton per giga. Hybrid battery, especially at least some of the designs which are popular, would use somewhere between 1,500-2,000 metric ton per giga. But, having said that, you know, I've-- this is based on my understanding and theoretical. We've not yet been, you know, talked to anybody who's specifically making this type of cells within India. So we've so far not seen an activity to make a cell specifically for hybrid in India, so I've not been able to double-check this number. Okay, got it. And so my second question was, you know, more on the balance sheet side. You know, if you could share some color around how our working capital situation has evolved since the last quarter. It's been improving. So overall, you know, we have been operating cash flow positive in the first quarter and as of now. Well, you'll get to see more numbers in September, but we are on, we are on stable and improving track. It's not becoming worse. Okay. Good to hear, sir. Thank you for taking the questions. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead, sir. Yeah, thank you so much for taking the follow-up, sir. So the customs duty cut, does that apply to imports of lithium carbonate and hydroxide as well, or is it only for the, you know, pure metal itself? Actually, it's the reverse. It applies to lithium carbonate and lithium hydroxide. Okay, okay. So it's a great saving in our raw material cost? Yes, yes. So to that extent, our electrolyte... So in the international market, it doesn't make so much of a difference, because, you know, anyway, we would have an advanced license because ultimately it's getting exported. But when we are selling it locally, to that extent, our cost goes down. Got it. Got it. And just the other thing was, slide 20 of the presentation mentions that the organic revenue would have been INR 14 crore higher, adjusted for the decline in the bromine price. Yeah. So, does that mean that instead of INR 142 crore, it would have been INR 156 crore for the quarter? Yeah. Is that how we should interpret it? Yeah. So, you know, the, the values given there are that if the same selling price was applicable today, so I, I guess it's also bromine as well as market conditions. But if the same prices were, same rate, so, you know, if I was selling product at INR 120 before, and I'm just saying as an example, if I'm selling it today at INR 110, so that delta was basically transferred, then the revenue would have been INR 156 crore. And similarly, in case of battery, battery is where, I mean, the inorganic lithium is where you can see bigger. Where if the, if the same lithium prices existed as what we sold in, FY, Q1, FY 2024, it would have been INR 27 crore higher. So volume-wise, you know, in case of organic, the growth is bigger, and in case of inorganic also, there is a volume growth. But, like, you know, just because of the lower prices, either it's shown as a lower growth or a decrease, like, on the revenue numbers. Right. Right. So the increase numbers would have been INR 156 in organic and INR 65 in inorganic? Correct. If the same rates as we had in Q1 were applicable last year. So I think, you know, we were seeing already lithium prices decrease, and then Q2, Q3 was where they bottomed out. Now they are stable, but, so I think in 2, 3 quarters, you will have this impact. Then depends on what lithium does and what, how the bromine and organic molecules contribute. Got it. Yeah. Just final thing from my side. On the CSM business, if you could please give us some update about how things are looking there. I know there's been destocking and all of those things, but you've been in discussions with several customers, so how is that coming along, and by when could we see some traction in that business? So yeah, so I'm happy. You know, even in spite of all these challenges that we are seeing and, you know, over some of the agro CSM customers not having a demand, we did a good job of contribution from CSM and contract manufacturing. So we are still able to maintain, like, you know, upwards of 15% of revenue. Our target is to reach 20% of the revenue in CSM business. What has helped us, as I explained earlier, you know, we have flavors and fragrance, and we also started diversifying. So we had some more pharma projects, some more flavors and fragrance projects. And we also started diversifying into some other applications, such as something which is used in engineering, so something which is used as a-... starting material by other specialty chemical companies, like to make a specialty polymer or something, and also something in semiconductors. So all of these together, these projects are exciting and helped us maintain the CSM at 15% level. So we hope that as more, like, as these small projects develop further, and also once the agro demand comes back, we will, like, hope to cross around 20%, target that we have, for sure by next financial year. If the agro business comes back well in the second half, then maybe even in the current financial year, we can get 20% contribution from CSM. Got it. Thank you so much, sir. All the best. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Aayush Rathi from Aditya Birla Money. Please go ahead. Hello, am I audible? Yes. Oh, hi, sir. Thanks for taking my question. Sir, you seem to be on track with a lot of battery business plans, which is, like, a really positive thing. I actually just wanted to understand if you could give some insights on the pricing scenario. Like, do we see a plateau forming or prices are still forming, or how volatile are the prices right now in the current scenario? If you could just give some colors. So, you know, if I look at our inorganic chemicals, which is mostly lithium-based compounds, we saw raw material prices kind of hit their bottom. And now, you know, they generally trade into a narrow band of around $10-$12 or $13. So let's say $11.5, ±$1.5 for last 1 or 2 quarters. So lithium, that is our base material. And I think our customers also, who were waiting for the prices kind of to bottom out, have now kind of, you know, realized that this is the bottom, and again, we've seen the demand again come back. So we've seen some, like, increase in our sales price, but more or less it has stabilized now. We feel from here, as the lithium prices will increase, then, you know, the prices can go up higher. My analysis also says, at least based on my understanding, that long term, you know, the current price of lithium is unsustainable because the, this is the price at which the old mining companies can make profit, but the newer mining companies cannot make profit. So if they stay at this level, you will see some of the new miners stop production, which would reduce the demand, and then you will again... Sorry, reduce the supply, and then you will again see the prices go high. So that's my expectation. Now, whether that happens within one year, whether in two year, depends on many things, but this is my expectation on the lithium side. In terms of organic chemicals, I think, of course, the input prices were also going down, so, like, bromine, solvents, you know, petrochemical compounds, so they were all reducing, so that was one part. But the bigger part also was that, you know, China, where there was excess capacity, when the demand is less, they tend to dump. Some of the places we have seen, like, you know, the delta between bromine, I mean, delta between raw material and the final almost disappear. So, like, you know, almost they are selling at RMP kind of price levels. But, the, like, what we've seen is the lowest has already happened about a quarter ago. Now they are stable or they are slightly increasing. Not yet a rapid increase, but, like, seems to have seen the bottom pricing, on the organic side. All right. Thanks for the detailed answer, sir. One question, like a basic question I wanted to ask: Recently, government has reduced the customs duties impact on lithium. So by any chance, do we see any prices of our end product, which is electrolytes, going down for that also? Like, if you could just explain the unit economics, how does it affect our margins by anyhow? Yeah. So see, basically, I use lithium carbonate to make lithium LiPF6 or other electrolyte salts, and then that electrolyte salt gets into formulation. Again, directly at a formulation level, you know, in terms of weight, only 15% is electrolyte salt, right? And if you consider lithium carbonate, the contribution of that would be even lower, because the electrolyte salt has lithium and something, right? So- Mm. As a percentage, let's say so a 7.5% decrease at an electrolyte level, like, you know, gives me, let's say a very small reduction, like couple of percentage points. But, like, you know, again, when you are doing volumes like 30 KTA, each percentage matters. And this is something which is positive for us, where, you know, when we can import lithium carbonate without paying any duty, so that makes our LiPF6 more competitive and our electrolyte more competitive. Got it, sir. Thanks a lot for taking my question, and all the best for the future. Thank you. Thank you. The next question is from the line of Yash Shah from Investec. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, my first question was regarding our inorganic segment. Adjusted for the price fall and the lithium prices fall, we would have had made a, we would have had a volume growth of somewhere between 45%-50%, year-on-year in this quarter in the inorganic segment? And in the previous years, sir, we closed at 75%-80% of utilization. Do we have enough capacity for the rest of the year, sir, in this segment? Is my first question? Yes. Okay. Right, okay. And just another question which I had was, we mentioned a couple of times on the call that we are trying to position ourselves as China plus one, be the next cheapest alternative, outside China. If you had to quantify in terms of the similar quality, we supply to China, what will be the price differential? In some way, if you can quantify that. Thank you, sir. So yes, I mean, we do say we are the cheapest outside China, but we also say that if you take a 3-year or a 4-year view, we would also add more value as compared to China. And this is actually the fact. I mean, we've done some number calculations that, if somebody entered into a formula-based pricing with Neogen four years ago, and when lithium went very high, very low, you know, they were using the same formula at which we are currently selling LiPF6, or, you know, the agreements which we have gotten into with international customers. As compared to the spot China market price, they would have made more money by paying us higher for some portion of the time, because when they pay us high, it's like X, but when, China increases price during shortage, it's crazy high. So therefore, overall, we still add more value to them. So it's not just saying that, "Oh, we are the best, cheapest source outside China." Of course, you know, if you wanted to do the hedging, that's where it helps, because let's say other suppliers also have added value. That's why there's a supplier in Japan as well as Korea. But we could have added more value because our cost is lower as compared to them. In terms of percentage, it's difficult to say, because like I said, you know, China has crazy low, crazy highs. Which one I compare? Like, you know, there are times where we are 30, 40, 50% more expensive, even 60% more expensive, and there are times where we are, like, one-third the price of China. Like, if I just apply this formula price versus the Chinese spot prices. Got it, sir. Got it. That's all from my side, sir. Thank you. Thank you. The next question is from the line of Nilesh Ghuge from HDFC Securities. Please go ahead. Yeah, thanks for the opportunity. My question is on the CapEx for our organic, inorganic. As you mentioned, in the... While answering previous question, that you have sufficient capacity for organic, but, any plan to put up a expansion in organic and inorganic capacity for, let's say, in FY 2026, 2027? So on the organic side, you know, we have capacity. I mean, till Neogen basically reaches around INR 1,000 crore, where I think, if I remember right, I mean, I'm saying Neogen standalone, which is about INR 1,000 crore, in which I think organic contribution would be somewhere around INR 700 crore-INR 750 crore. So we already have capacity in place for that. And till we hit that, till we hit that number of, you know, INR 175 crore, let's say, of organic production, and you can see we are still far away from that, till that time, we have capacity. We also feel that after we reach peak utilization level, at least in the current scenarios, instead of immediately adding more capacity, we would like to basically stabilize the products, get better product mix, and use the same capacity, maybe with some small debottlenecking or small CapEx, to basically contribute and more. So I think, if we maintain our target, that by FY 2026, Neogen reaches its full utilization level, we reach INR 1,000 crore, and then FY 2027, we debottleneck and get another 15 odd% revenue growth. So I think till FY 2027, most likely, unless there is some very large project, and you never say never, but at least in our current plans, we would just like to continue with the existing capacity, use it to the fullest and optimize the product mix and the capacity utilization. So most likely, FY 2027 is where we would consider organic CapEx to take care of our growth in FY 2028 and 2029. But I think FY 2025 and FY 2026, most likely no significant organic CapEx. As I mentioned in one of my earlier answers, in BuLi, we do see, like, you know, scope for increasing the capacity, because there, our, our expectation is based on order book. This year, we will start hitting full utilization of the capacity which we had estimated. And with the environmental approval which has come in, we still have to do some more stages of processing of that, but once we get the approval, maybe by second half, we may look at further increasing the BuLi capacity. But it's just an incremental debottlenecking type, so it will not require too much of, CapEx from our side on the organic side. Inorganic side, like, you know, in our existing facility, just by debottlenecking without, you know, significantly making a new investment, you know, we will be able to add more capacity. So it's something which I'm not planning. But yeah, once we start hitting like, you know, INR 150 crore-INR 200 crore, so like a quarterly number of INR 50 crore plus on, like, a stable lithium price kind of a basis, that's when we will start considering, like, you know, whether we need to do a slight increase in the lithium capacity. Okay. And secondly, on our electrolyte business. So you do say that, okay, you have already sent samples to your customers, and customers will sign maybe probably in the FY 2026 for a long-term contract for the supply of electrolyte. So, just, for my understanding, is it like that the customers are waiting for our commercial facility to commission and then get the product with the quality and the purity of the electrolyte, and then they will sign contract? Is it like that? So, you know, first of all, clarification, I said in FY 2025 or FY 2026, so we can sign some contracts this year also. In my view, you know, our facility is there, especially if I'm thinking of the large giga customers, our facility is there before they start, so we are ready for them. It's just that they need to use our electrolyte once in the plant, get confidence, and then based on that, they can go ahead and sign the contract. Also, you know, there are two kinds of contracts. One says: You know, I will supply to you, you will buy from me. And the second says: You will buy XYZ quantity minimum, and I will supply maximum so much. So for the second type of contracts to happen, you need to have also a volume clarity on the sides of the customer. So, you know, these giga factories, as they ramp up their production, their production stabilizes, then they have a better view of where you would. Okay, okay. Thanks, Harin. Thanks a lot. Sorry about the disturbance, right? Thank you. The next question is from the line of Sabyasachi Mukherji from Bajaj Finserv Asset Management Company. Please go ahead. Yeah, hi. Thanks for the opportunity, Dr. Harin. Good evening. First question, could you talk about this semiconductor opportunity that you mentioned in your remarks? What are these products exactly? Is it an exports opportunity or domestic opportunity as well? How big could be this opportunity? I'll just. So basically, there are three types. So the organolithium compounds, which we are making in BuLi, so they find usage to make other chemicals, which are then used in semiconductor. So let's say we would be like a tier two supplier, in case of a semiconductor chip manufacturing facility, where we would supply this organolithium to somebody, who would then make the chemical, which would go into semiconductors. So this is one opportunity we have. On top of that, in our organic synthesis, we have made, like, a specialty gas of a purity, like 99.99% and higher, which then is used, like, you know, for semiconductor manufacturing. So we have some projects which are under contract manufacturing model, where we basically make these products for international markets. The third is, there are some organic chemicals which we are making, which very high purity versions of that, without the metal content, will be used for making certain kind of chemicals for semiconductors. So again, that would be like a tier two kind of a supply situation. So we feel like, you know, again, like battery materials, we have an opportunity to be a tier two supplier in the international market, learn from that, and then hopefully, when semiconductor manufacturing comes in India, we can, like, use that partnership and try to see if, you know, we can forward integrate and be a tier one supplier in India. So again, that's something which will take time, but we just made some start. We have these three engines. One is organic molecules, one is, which are, like, organic molecules required for semiconductor manufacturing, organolithium compounds, and the specialty gases of very high purity for semiconductor applications. Got it. I mean, still it's early days, but, but we have kind of made a breakthrough here- Yes. So it will be like, in the current, it will be like few INR crores, getting into few tens of INR crores in the current financial year. Let's see. Like, you know, we just make starting with that, and then we'll see how we can ramp it up and make it more significant going forward. Got it. Second question on the mention of INR 900 crore-INR 1,000 crore by FY 2026 on the press release, as well as in the management commentary in the presentation. This is for the standalone piece, right? Standalone piece, standalone piece. Okay. And if I were to kind of break it down to organic, BuLi and inorganic, it would be somewhere close to INR 700-750 for organic. And how does that stack up? If you can just... Yeah. So around INR 750 crore, I would say INR 700 crore-INR 750 crore for organic, around INR 100 odd crore for BuLi, and another about INR 150 odd crore for inorganic. Okay, okay. On top of that, the battery chemicals should be contributing around INR 250-INR 300 crores in FY 2026, right? So the capacity which are coming online in the brownfield in Dahej, in this year itself can contribute around 200, 250. On top of that, the new capacity will contribute more, and on top of that, the greenfield site will come online on the second half. So like, you know, the existing capacity can contribute 200 to 250. The 250 is bare minimum, plus the new capacities which we are adding by end of the year, they will contribute, and plus the greenfield site will contribute in the second half. So it will be a number. It should be a number more than 200, 250. How much more? Please give me some time to tell you. Maybe by end of the current year also. No, no, completely understood. Just a follow-up here. So, once our electrolyte facility is up and running, the smaller one- Mm-hmm. And, the greenfield one comes probably sometime in, let's say September or by December of 2025, the salt capacity will be consumed internally. And, by that time, we'll also have some more salt capacity coming up for the international rise. So, what would be the ballpark salt revenue and, you know, electrolyte revenue? Any number you have in mind? Like I said, you know, give me some time to give you that number. I mean, what the total number would be. It will be 250 plus, like I said, additional salt from additional salt capacity, Mm-hmm. —as well as from, you know, the greenfield site. Just to clarify, so, you know, for 30 KTA, we would need around 3,000-4,000 tons of salt. But we don't expect in the first year to use 30 KTA, right? Right. So the salt capacity will also be available in the beginning, more for the international market. We will see how we are progressing in the international market in the salt, and then as electrolyte gets fully utilized by FY 2028, accordingly, we can either keep adding capacity or, you know, divert more capacity for India users. Got it. But, but one thing, just, does this, this INR 200 crore you are saying, we can do in FY 2025 itself coming from salt? No, no. If I, the capacity we have in place, like, you know, which is currently undergoing stabilization- Mm-hmm. -that on a full year basis, can contribute to INR 200 crore in FY 2025. Okay. Okay. This year, we are not getting full utilization because, you know, approvers, all that will take, but all, all of it will be approved. So, you know, the electrolyte and the salt capacity, which the 2000 MTA, 400 ton, should give you somewhere close to around INR 200 crore, along with the increase in capacity to 1000, what we are estimating. And then additional thing, which will come by end of the year, that will maybe take some time for approval. So that's why beyond 200, 250, some contribution coming from the brownfield, some contribution coming from greenfield, but too early to tell exactly how much. Understood. Any initial readings on what could be the margins from salt revenue, or too early? Yeah. So, you know, in the past also, we have said that we expect, like, a ROC of 20%. And also we are targeting, like, maybe at a EBITDA level, depending on price of lithium, you know, somewhere around 16%, 17% kind of, like, EBITDA margins, what we were targeting. So far, whatever contracts we have signed, we seem to be on track to basically achieve that in the salts. So in salts, we have more visibility because, you know, technically, if all the contracts we are signing, if all the customers take the full volume, our entire capacity can get fully utilized just for salt. So we have the visibility on the salt more clearer. On the electrolyte, you know, as I explained, as Indian players start their electrolyte manufacturing activity, we will have a better clarity on margin here. Got it. That's extremely helpful. Thank you, Dr. Harin. Wish you all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you everyone for joining the call. I hope we were able to address your queries. If you have any further questions, please feel free to reach out to our investor relations team, and we will address them. Thank you once again, and we look forward to connecting with you again in the next quarter. Thank you. On behalf of Neogen Chemicals Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.