HALS ramp real but YoY PAT +4.7% masks margin pressure

Delivered ₹268.4 Cr consolidated (call slightly understated)

Delivered 10.5% YoY; legacy business down 6% YoY due to supply disruption

Delivered ₹73.3 Cr PAT on ₹268.4 Cr = 27.3% margin; consistent with claim

Delivered 4.7% YoY PAT growth. Management conflated QoQ (37% strong) with weak YoY (4.7%)

EBITDA margin 43% standalone reported; but YoY PAT growth only 4.7% despite margin expansion suggests SG&A/overhead drag

22% of ₹268.4 Cr = ₹59 Cr Q1 HALS = ₹236 Cr annualized at Q1 run-rate, at low end of ₹250-300 Cr range

Standalone revenue down 6% YoY; management attributes to 2-week raw material shutdown + reduced export shipment availability, not demand

Management cites Middle East crisis raw material cost inflation; says end-product prices stable, no competitive intensity change

Exports now 50% of HALS sales (was 0% year 1); demonstrates customer approval and global traction post-trials

Commercialization moved from September to November due to labor/supply issues; Q1 FY28 revenue start, not Q3 FY27

Geneus NOR HALS collaboration (₹25 Cr capex, Q3 start, ₹300-350 Cr cumulative 3-4 yr potential); Kemin 5-yr supply contract (assured volumes, no discount)

Standalone revenue down 6% YoY (Q1 FY26 was ₹216 Cr, Q1 FY27 ₹203 Cr); attributed to raw material supply disruption not demand

Annualized this quarter ₹250-300 Cr, very comfortable with that. Volume 1,000 tons, average price moved 440→550. Product mix 770 contribution down to 35% from 50%, higher grades up.

Sustainable, no benefit from cheap RM. Higher grades + operational efficiency drove it.

Contract manufacturer + joint marketing co-branded product. Tech transfer from them, no royalties. Q3 start, ₹300-350 Cr cumulative over 3-4 years. Direct sales incremental.

Supply security is major outcome for both. No disclosure of specific pricing terms.

Major factor is raw material pricing from Middle East crisis. End-product prices stable, no competitive intensity change.

Lost ~2 weeks of production. Labor issues from gas crises also challenging. Better quarter without these, but not quantified.

Long-term contracts limiting pass-through. Partial increases in some cases, not 100%. Price increase 'might be a big question' next quarter.

Expect Q3 start (Nov/Dec), Q3 and Q4 for setup/stabilization, major revenue from Q1 FY28. Delay from September due to labor issues.

Stabilized. Sampling with customers mostly complete, approvals received. Revenue ramp starting Aug/Sept with operational efficiency improvements.

20-40% offtake increase over 5 years, starting immediately within 2-3 months. Additional capacity needed.

Planned supply chain well, hopeful no stoppages. Not confident it's 'locked' due to uncertainties outside control.

Europe: BASF, Sabo. China: Rianlon, Suqian/Unitechem. No major market share loss reported.

NOR is alkoxy HALS (higher grade, far superior performance vs 3-hydroxy). Higher cost, niche applications (harsh agro films). Completely new market, currently only BASF.

Both additional investments. Geneus ~₹25 Cr. Kemin additional capacity investment, details TBD.

Clean Science direct sales to market, ₹300-350 Cr is with partner's prescribed volumes. Any over-and-above sales incremental.

All future products, businesses, new lines will be in Clean Fino Chem subsidiary only.

Based on current 1,000 tons/q volume and pricing. Export ramp ongoing, higher grades ramping, still dependent on trial/approval conversion.

Delayed from September. Q3-Q4 for setup/stabilization. Capex and timeline dependent, no revenue Q1-Q3 FY27.

Cumulative, implies ₹75-120 Cr annual peak. New market, BASF-dominated, unproven demand. Q3 start only.

Existing customer, 10-year relationship, supply security focus. Additional capacity needed, phased ramp.

Driven by HALS higher grades and operational efficiency. RM volatility risk; management not passing through 100% of cost increases.

Management confident but YoY PAT growth only 4.7% suggests near-term headwinds. Long-term leverage expected from HALS/export.

Vague guidance. Q1 deployed ₹100 Cr in Clean Fino Chem; ₹25 Cr allocated for Geneus. Kemin capacity additions TBD.

Middle East crisis driving crude oil and RM cost inflation. Management cites this as primary Q1 headwind. Pass-through limited by long-term contracts; margin pressure persists.

2-week raw material supply shutdown Q1 impacted legacy business revenue -6% YoY. Shipping vessel non-availability cited. Management not fully confident disruptions won't recur.

Performance Chemical 2 plant commercialization moved from September to November due to labor/supply issues. Q1 FY28 revenue start, not Q3. Ramp speed and profitability timing now uncertain.

HALS export penetration jumped to 50% but still in early trials/approval phase. Commercial shipments just starting. Ramp dependent on customer approval flow and volume uptake.

₹300-350 Cr over 3-4 years is aspirational with no revenue Q1. Requires ₹25 Cr capex, Q3 start, ramp-up in NOR HALS market currently dominated by BASF. Customer demand/pricing power uncertain.

Kemin is largest customer (world's largest buyer of some ingredients per call). 5-year exclusive supply deal now locks in dependency; volume +20-40% upside but also concentration. Relationship rupture or demand shift could impact scale.