Fairchem Organics (NSE:FAIRCHEMOR) Q1 2027 Earnings Call

0:02 Ladies and gentlemen, good day, and welcome to the Q1 FY twenty twenty seven Conference Call of Fairchem Organics Limited hosted by Valorama Advisors. As a reminder, all participant lines will be in a listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Purwangi Jain from Valorum Advisors. Thank you and over to you ma'am. Thank you. Good evening, everyone, and a warm welcome to you all. My name is Purwang Ji Jain from Valorum Advisors. We represent the Investor Relations of Fairchem Organics Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial year twenty twenty seven. Before we begin, a quick cautionary statement.

0:50 Some of the statements made in today's conference call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management team joining us on today's call. We have with us Mr. Naosh Sarivalla, Managing Director and Chairman and Mr. Bhavesh Shah, Chief Financial Officer.

1:37 Without any delay, I would like to hand over the call to Mr. Bhavesh Shah to begin with the financial highlights. Thank you and over to you sir. Thanks and good afternoon everyone. Welcome to the earnings call for Q1 FY twenty twenty seven for the quarter under review. The revenue from operations was at crore, reflecting a 34.4% year on year increase compared to the corresponding quarter last year. EBITDA for the quarter was INR18 crore with an EBITDA margin of 10.14%. Net profit for the quarter was INR 10 crores. We have processed INR 12 thousand 400 tonnes of raw materials and have sold 13,500 tonnes during the quarter.

2:30 Happy to answer any queries. With this, I'll hand over the call to our Managing Director, Mr. Nawaj Chiriwala. Thank you, Baves. Good evening, everyone. As we begin FY 2027, I want to share our operational perspective on quarter and the road ahead. The quarter has started on a strong note. Our revenues from operations have grown. Basically, they have been driven primarily by higher price realization on account of elevated raw material costs as well as lower imports amid ongoing supply chain constraints. I am pleased to note that our EBITDA margins have also further improved to more than 10% during the quarter, supported by better realization in domestic market as import pressure continues to ease.

3:27 On the external environment, while we remain watchful of the evolving macroeconomic situation, including the uncertainty arising out of ongoing Middle East crisis, we continue to be cautiously optimistic about the trajectory ahead. The recently concluded India UK Free Trade Agreement and the expected implementation of India EU Free Trade Agreement favorable tariff developments with U. S. And recent depreciation of Indian rupee are expected to strengthen our export competitiveness and support improved capacity utilization over the course of the year. With that, I open the floor for question and answer session. Thank you very much. We will now begin the question and answer The first question is from the line of Shlo Patel from ZenFlo Research. Please go ahead.

4:40 Hi. Thanks for the opportunity. Just a couple of questions. Can you share the revenue mix for Q1 FY 'twenty seven? Hello? Am I audible? Yes, you are audible. Yes. The revenue was INR 176 crore, of which around 30% was dimer acid, 42% was linoleic acid, isosteric acid was 4% and the rest 24% is other byproducts. Okay. And can we expect similar revenue and margin run rate for the rest of the three quarters? Yes. Looking at the current situation, we feel we'll be able to maintain.

5:30 Yes. And just about the isosteric acid ramp up, how are we expecting the ramp up for isosteric acid for next one to two years? I mean in next one to two years, we'll reach more than 80% capacity utilization. Yes. Okay. Thanks. That's it from my side. Thanks. Thank you. The next question is from the line of Shivam Gupta from Treenetra Asset Managers. Please go ahead. I want to know the company has historically benefited from its integrated sourcing model. Beyond raw material prices, are there any such initiative underway that can further standard your cost advantage over global peers? Last year, we had undertaken major energy conservation exercise whereby we have been able to reduce our power consumption by more than 30% and our solid fuel consumption also by more than 35%.

6:32 So that is one major exercise we have undertaken. We continuously do time and motion study to so that no excess manpower is created in the organization. And at the same time, now we have started working on the catalyst and the consumables what we have been using, trying to stabilize or work with different types of catalyst whereby the consumption and the value both goes down. Okay, sir. And my second question is, as global customer increasing look to diversify their supply chains, are we making any meaningful increase in inquiry for customers seeking alternative to existing supplies?

7:17 Yes. Fairly large number. Can you like tell numbers? Sir, how say seven to eight big customers. Okay, sir. Thank you. That's it from my side. Thank you. Thank you. The next question is from the line of Sachal Kapoor from Antifagile Banking. Please go ahead. Yeah, hi. Thank you for taking my questions. Sir, I would like to start with our gross margins. If you look at the business over the last five years, our gross margins were low to begin with and they've only gone lower from that reference point, which kind of means that the product innovation and R and D has had almost no impact or maybe we are not interested in innovating and moving up the value chain because that should have reflected in the gross margins.

8:13 It's not the case because we introduced isosteric acid. We are the third company in the world making isosteric acid and we have covered the green route. So that is one thing. Secondly, we have commissioned the bypass fat plant also, which again, there are very few companies making bypass rate. So it's not that we are not doing innovation. Basic problem has been we have been always explaining that the duty structure on the raw material what we buy is 22.5% and the finished product carries 7.5% duty. That is the basic reason. And in the presentation, we are saying that we have got 13 technical or scientific resources, one PhD.

9:00 How much revenue on a recurring basis do we invest in R and D every year? Is it 1%, two percent of sales, that kind of a number or? It's around INR40 50 lakhs is only spent on the revenue side. The salary and the capital expenditure is on need based basis. So it is 1%, 1.5% as of now. 1%, 1.5% as of now, right? I think we should quote that number in the annual report because I was looking at the latest annual report, I couldn't find the number clearly. Maybe something we can take as a feedback and implement from next year this year's annual report is already up. R and D expenses already mentioned. If you can just check the annual report, we'll just let you know the page.

9:54 Yes, I checked them. It's showing blank as so both capital and recurring is showing blank. I had a look. We'll just get back to you on this. Sure, sure, sure. No problem. And finally, what percentage of current revenues are coming from products that did not exist three years ago or four years ago? And where do you expect the product mix to shift over the next three to four years? Basically, with the introduction of isosteric acid, we intend to increase the utilization of dimer fatty acid plant, which in turn will increase the overall utilization of plant capacity. So that has been the isosteric acid we introduced two years back. And basically, it is going in cosmetics, plus there are entry barriers, which has taken a little bit longer for us to get the approvals from the buyers.

10:58 Right. And do we expect to introduce more products that kind of fit our philosophy of base to wealth over the next Next quarter, we'll be introducing one new raw material. Again, for the first time, we'll be manufacturing that particular product. And it also falls in oleochemical sector only, which is the process has been developed by our in house R and D lab. Sure. And in terms of the cycle, innovation cycle from concept to commercial, what is the kind of the delay? Is it does it take three years, five years, seven years? R and D is something which takes pretty long and in which our time spent is not fixed. Then we go for pilot plant, then we go for one small plant and then we go for the larger plant.

11:50 Basically, none of these technologies are available of the cells. All these technologies are to be self developed. So rather than taking any undue risk, we try to move slowly. Sure. So in terms of the competitive advantage in manufacturing, is it the manufacturing know how rather than the patents? Because I don't think we file patents. Any chemical companies don't file. No, it's manufacturing know Yes. But we tend from filing patents. So I know Clean Science as an example is a very different organization, but they also don't file any patents. Patents are very difficult to defend. I mean, there are we are the preferred choice to our customer.

12:37 That is what we prefer. Sure, sure, sure. Understood. Thank you so much for answering all my questions. Thank you. Thank you. Thank you. The next question is from the line of Preet Jain from Navajo. Please go ahead. Yes. Sorry to interrupt. Mr. Preet, may we request you use a microphone to ask a question? Mr. Preeth, are not able to hear you well. Hello? Yes, please go ahead. Basically, I want to know that who are our dimer acid customers or is there any dimer acid? How is the competitive environment scenario ramping up?

13:27 And I want to know basically on the market side key, what basically in terms of tonnage, how big is our market of Dimer asset? So these are certain information we would like to share. That is the name of our customer and what is the quantity we are selling. So that's it won't be possible for me to share those information. Okay. And I also want to ask that is there any alternative to the raw material we are using like from like we are using the feed oil from Madiko or other players. Is there any alternative of that raw material for our dimer acid? No. Basically, dimer acid is made from vegetable oil sources, and we are utilizing vegetable oil sources only.

14:19 The second option is to follow Mutantallo route, which is something which we are not doing. Okay. And also on the new product which we are coming on, which will be commissioned from Q2, the product which is using EV battery side, how is the ramp up of that product We are not going to manufacture anything for EV battery. We have never said that. There might be some confusion at your end. Okay. But the new capacity which is coming from Q2 of 40,000 metric tons, it is of dimerated and that another product? Other product. No, it's another product. It's in the family of oleochemical. Okay, okay. And how is the ramp up of that product expected? We are going to start the trial run.

15:07 So once that is stabilized, then we'll ramp up the capacity. And margins of that plant will be same as our current? Better than current. Should be better. Okay, okay. Got it. Thank you. Thank you. Thank you. The next question is from the line of Chirag Vikaria from Bodhrani Finance. Please go ahead. Yes. Good afternoon, sir. I wanted to understand sir, in your PPT Page 14, you have written the revenue has improved because of higher price realization due to high raw material costs. So does that mean that higher raw material costs you were able to pass on to the consumer? Yes, yes.

15:52 Sure. Incrementally, you used to mention that it was tough to pass on, so how come it is possible now? There was a geopolitical supply chain issues because of Middle East crisis. And we have seen that the imports have also reduced. So that's the reason we can we could pass on the price increase. So sir, if things were to say this supply chain constraint that you have mentioned, if those were to ease, again the same problem would surface or you think... Basically, was dumping happening from China, which has gone down. And if dumping starts again, we cannot do anything about it.

16:39 So, sir, second question was that in terms of margin, which you posted around 10% this time, That is again dependent on the fact that the import does not come in and you Obviously, in any chemical sector, if China starts dumping which I mean, why does companies go for anti dumping duties? I mean, so dumping is happening and no one can do anything about it. Okay, sir. Okay, okay. Thank you, sir. Thank you. The next question is from the line of Madhu Rathi from Counter Cyclic Investment. Please go ahead. Yes. Thank you for the opportunity. For Q3, I wanted to understand that this 30% volume growth that we have seen quarter on quarter. Is this sustainable and for what percentage of our products are direct crude substitutes in our major paint industry to be better understand?

17:35 So the linolenic acid, which is 40% of our volume, that goes into the paint industry. Sir, this is of there is crude subsidiary, crude there is a subsidiary. So either they use linolic acid or they use some kind of crude subsidiary. Is that understood, Yes, yes. Sir, so do we see a scenario where a major portion of our volume going away whenever crude comes down? Not that crude, it's crude vegetable oil. Okay, crude vegetable oil. Got it. Crude vegetable will reduce, higher cost will also reduce. Got it. And sir, this pricing improvement that we've seen, we expect this to sustain going forward with and has there been a meaningful impact of the Chinese anti evaluation on our business?

18:31 Yes. Chinese dumping has gone down. Devaluation has happened. So I mean, all these things combined effect, the margins have improved. Got it. Now sir, coming out to our investor that we have mentioned that we have seen some product upgradation of in all the categories in all the steel railings. So is this a product that is widely used or this is something like very application specific product like one of the largest where we have specific product or specific application. So if you would help us understand what It's a combination of both. A combination of both. Sir, have customer trials begun for this product?

19:17 Yes, they are trying. And now sir, if you could help us understand what would be the realization multiple we would get versus a normal Obviously, it will be better than that anything when you make a special product, a tailor made product, obviously, your price realization goes up. Right. Sir, but if you could help us understand the magnitude of the No, it's something once we actually enter in contract, will be able to realize. Got it. Sir, just final key, question from my line. Sir, how do you see the business growing over the next two to three years? Are we planning to move into more like Oleon and Fine Organics, where we are manufacturing application specific products? Or you would like to make products that are difficult to manufacture by someone else like artificial... Difficult to manufacture. Difficult to manufacture.

20:17 Okay. And sir, OU chemical that you mentioned, in what industry does it go exactly the 40,000 metric ton that you've obtained for? Yes. Ram again, we were not able to hear you all. Sir, the OU chemical that you mentioned that you've assigned the 40,000 metric ton of capacity for, in what product are you expecting? At this stage, we won't divert. Before also, I think you have last time also you did ask this question, if my memory is right. Yes, yes. Yes, I said no. I won't be able to answer that. So that was from my line, sir. Thank you so much for being the bye now.

21:02 Thank you. 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 Ashish Uganlavar from InvestQ PMS. Please go ahead. Yes. Sir, thank you for this opportunity. So I've been following the company for the last five years. And this is, I think, first time that we've seen things improve because I think the last time when you expanded capacity, things were in South because of dumping. So sir, the questions would be like, you mentioned that two factors. One is there is an inverted duty structure because of which margins are impacted. And secondly, the dumping that was happening. So is it possible to segregate how much of the margins have been sacrificed because of each of these? Because I think inverted duty would be eating into something and then the remainder is because of the realization.

21:58 The finished product is charged at 7.5% and the raw material is charged at 16.5%. So differential 9% is the margin getting lost in this whole process. So when did this come into effect, sir, this inverted duty structure? This came 2024 with that at 27.5%, then it was then it got reduced to 16.5%. So is there any chance of this getting corrected? Any representations that you will see any hope on that? How can we something which we are too small fry to see Yes, because all these it is mainly used for I mean, we are having a byproduct of I mean, we are too small a fry to understand this UT thing.

22:52 Secondly, sir, you mentioned that the dumping has reduced. Is it because the imports were not able to come in because of this year of all the cost of... Basically, I think they might have realized that too much of dumping is happening. So maybe or maybe... Or some incentive being reduced in China or something. Or maybe the export incentive they were getting might have come down. Something would have happened because we see the same thing in lots of products. Okay. So I'm just trying to understand whether this is a sustainable thing gain for us or is it not... I think it will be something which is happening in China, seeing what type of thought process going on there.

23:37 So I might say that, yes, this is sustainable and it might not and it might remain sustainable also. I mean, that's something I mean, this is a business risk. So that is one of the reasons we are not doing any crazy expansion or we are not taking any debt or anything. Whenever the things were good also, we were not doing that. The isosteric acid Sorry to interrupt. Yes. Mr. Ashish, may we request you to return to the question queue for a follow-up question. Okay. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Maitri Shah from Saphyr Capital. Please go ahead.

24:25 Hello. Good afternoon. Am I audible? Yes. Yes. Hello. So if you could mention what sort of volumes did we sell in 1Q FY twenty twenty six? I just wanted to gauge the Y o Y volume growth that we had for this year. So in Q1 FY twenty twenty six, we sold 13,000 tonnes. 13,000 tonnes. So most of our growth this quarter has led to the realization, I'm assuming. And you mentioned that two things helped. One is the China dumping have gone down and the second is because of the supply constraints happening, so we were able to pass on the cost. Just assuming that the supply constraints kind of lift up and now there's a normal supply happening, but the China dumping kind of stays stagnant.

25:17 What sort of revenue growth are we targeting for the rest of the year? Think the first thing we'll target is increasing capacity utilization. Minimum 10% to 20%, we intend to increase the capacity utilization. By the I mean, every quarter, maybe 5%. So by the end of the fourth quarter, we have increased it by around 20%. So that's our game plan. That is our strategy. We are working on that. I mean, obviously, the geopolitical situation is going to play a big part in us. Got it. And the reason for lower kind of like the lower volume growth in this quarter, can we base this off of lower imports happening in the country or have you found any sources domestically to kind of get the raw materials?

26:12 We are 100% domestic raw material company. We don't import any of our raw materials. Okay. So but the duties on the raw materials from where we are sourcing hit Yes. The gross Got it. Got it. On the isoteric side, what sort of contribution we had in Discord? And how do you plan to next scale it up over the next two years since it has a better EBITDA margin? I think isosteric acid is going in cosmetics and where the entry barriers are very stringent. I mean it is taking a little bit longer and longer than what we expected because there are just three manufacturers in the world, and there are very few buyers of this particular So if there is something called active barriers, which are happening, we are trying to enter, but it is taking its own time.

27:06 The breakthrough whenever if one or so buyer comes in a big way, suddenly you'll see a major surge in the quantity. So we are desperately working on it, but it's going to take its own time. It. Lastly on the Sorry to interrupt, Michelle, maybe I should return to the question queue for a follow-up. Yes. Thank you. Thank you. The next question is from the line of Rohan Joshi, an individual investor. Please go ahead. Hi, sir. Am I audible? Yes, you are. So I just have a question on that. What has the capacity utilization rate in this quarter? And what like what guidance can you give for the utilization rate for this FY 2027?

27:54 We are at close to around 60% as of now, and we'll exit the year we'd like to exit the year at around 70% to 75%. Okay. Got it, sir. So my second question was on the exports front. So like what is the current revenue contribution from the exports that we're getting right now? Like what products will be the key to achieving the company's export guidance that we've given? Dimer and isostery. Currently, it is hovering between 7% to 8%. If I go on the domestic side, if our provision of revenue comes currently around the paint industry, like is the company dependent on the paint industry significantly? 40%. 40. 40%. Okay, sir. As a result, can we expect the current growth outlook for the print industry as well? Like what the company plan to reduce the dependence over time? For that is that, we have 40% of the revenue comes from there.

28:50 No, we don't intend to reduce our dependence. At overall capacity utilization, we want to increase. We want to increase the overall capacity. So I think we are we don't have any issue with the proportion in paint industry. Okay, okay. Thank you, sir. Thank you so much. Thank you. The next question is from the line of Madhu Rathi from Counter Cyclic Investment. Please go ahead. Sir, thank you for the opportunity. Sir, just to clarify, given this 70% to 75% utilization, this is on the 80,000 metric tons capacity that we are Yes, currently yes. It is Ausintas. And any additional would be once the 40,000 starts? Correct, yes.

29:36 Okay, got it. And sir, so just as you clearly guided ramp up, sir, how because we are expecting the plant to be 80% utilized in the next year, but we are also seeing a longer gestation period from the end consumer. So how should we realistically look at this product for Fairchem Organics Limited? Isostering acid is manufactured from one of the core products of dimerfatic acid. So it has no bearing on whether I sell isosteric acid or not. Isosteric acid is the part of forward integration. So it gives me extra value, extra price realization on our byproduct stream, that's all. So it has no bearing whether I'm able to sell higher quantity or lower quantity of associated acid. It has no bearing on overall capacity utilization.

30:31 So where does this mono basic acid is used apart from acid curate acid, where is it used additionally? Pay. Pay. Got it. Sir, that was common. Thank you, sir. Thank you. The next question is from the line of Prathyam Ladha from Omni Management LLP. Please go ahead. Thank you for the opportunity, sir. All my questions have been answered. Just one question. Sir, in percentage terms, if you could guide how have the realizations improved from Q4 of FY twenty twenty six till now and also from Q1 of FY twenty twenty six?

31:18 The realization from Q4 has gone up by around 25% and from Q1 it has gone up by 30%. By 30%. Okay, sir. And we see the sustainable for like as long as this West Asia crisis is going on, right? Yes, we hope so. Okay, sir. Thank you. Thank you so much. Thank you. The next question is from the line of Shivam Parekh from Valuewise Wealth Management. Please go ahead. Hi, sir. Good afternoon. So around two quarters back in the conference call, you had mentioned that we were not willing to select the prices in which one of the domestic competitors was selling dimer acid and inorganic acid. So currently, as of today, so due to better price realization, are you comfortable now in selling at our net utilization capacity and due to better price realization as well as due to as to less sales as compared to around two, three quarters, sir?

32:31 Yes, that's correct. From March onwards, our margins realizations have improved. Okay. And sir, you had mentioned that you were deliberately slowing down on sales like you told that we would not like to select prices which we are not comfortable at. Due to that, we were at around 35% to 40% utilization capacity. And currently, you are at 60% and you tend to reach to 75%. So are we at that level where you are still waiting for the better price realizations? Or are we expecting... No, we are happy with the realization. We are happy with the realization. We'll continue to increase the market share. Okay.

33:18 So as of the current scenario, as the price realizations are better, so you are willing to ramp up at our next capacity. Is my assumption correct? So first step is to reach 100% capacity utilization, then we'll ramp up the capacity. Mr. Shivam, may we request you return to the question queue for a follow-up? Okay, sure. Thank you. The next question is from the line of Ashish Ubhunlabad from InvestQ PMS. Please go ahead. Hello. Yes. So isosteric acid still would be a very small portion of our sales, right? I mean, we've just started on that, is it? Yes, 4% in this quarter.

34:11 Okay. So whatever results have come this quarter, it is purely to do with things improving on BEMOR and LENOLOC and other assets? Yes, that's correct. Base business. Okay. So any guidance or maybe clear picture that you can share with us because you would have had a big approval cycle as far as is concerned? No, no. Every quarter, we get some query or some information that will take some more time for analysis. So it is I mean obviously, as a company, we are desperately following up. Our marketing is breathing down everyone's neck. But beyond the point, we cannot do. See, the beauty is that only third manufacturer in the world. So it also would have its own entry barriers because the products are used in cosmetics in Europe and Japan, which are very, very, very strict companies to deal with.

35:14 So that is taking your own time. But once you enter, it's a long term association with them. So that's fine with us. We don't mind. Yes. So sir, what I was trying to understand is given the challenges that we have had with the base business on these years, so this would be a good forward integration for us to look for change of course in the business overall. Is that the thought process if It these problems increases our sustainability. Right. Because you've always had a good balance sheet. The problem has been on the numbering and other things that have come out. Sure, sir. Okay. Thank you. Thank you. The next question is from the line of Rohit from Ithot PMS. Please go ahead.

36:14 Sorry to interrupt, Mr. Rohit. We are not able to hear you well. Could you please use your microphone to ask a question? Is it better now? Yes. Please go ahead with your question. Yes. Sir, most of the questions have been answered, sir. Just on this hydrostatic acid. So this I understand this call even in regards that it's a long gestation period. So in terms of if I have sort of opportunity, say, in terms of, let's say, there are five steps to get to the final process and start supplying commercially. Are we where are we now in terms of, like, I'm trying At couple of companies, we have to finish all five steps. At couple of companies, we are at the fourth step.

37:06 But I mean, we are at everywhere we have crossed third step. Okay. So is it fair to say that, let's say, end of this financial year, FY 'twenty seven, there will be some positive Yes. Outcome And if you can share some bits about even that you were doing this via the green, Mr. Niromi, the third player. So in terms of your cost advantage or maybe in terms of your pricing benefit that you can maybe some what gives you that edge versus the I mean, what is your pitch to the existing customers that why should they try you?

37:52 If you can maybe whatever you can share, I know these are confidential things, so whatever you can share. It's better. I mean, let the results speak. No, no, of course, sir. I mean, no, no, understand. But I'm saying, is there a good difference or is it the fact that something else is unique in your process that we follow? So that's mean that's the question. It's different. Our process is different. Even complete integrated land. Yes, we are following green process. That is our USP. And that is the reason it is taking a little bit longer for everyone to undertake stability test. Last question Sorry to interrupt, Mr. Rohit.

38:42 May we request you return to the question queue for a follow-up question. Thank you. The next question is from the line of Ajay Surya from Navisar. Please go ahead. Thanks for the opportunity. Am I audible? Yes, you are. So sir, I just wanted to understand from you. So because in the past, we have faced issues of like dumping from China and recently because of this more geopolitical tension, everything, things are against change in our favor. So sir, I wanted to understand like from our interaction with customers, are they now willing to enter into any long term contract or are they still preferring to like maybe go...

39:29 I won't rely to enter in any long term contract with so much... Volatility. Volatility. It will be hierarchy for me. But sir, on volumes, maybe we can get into like any long term contracts with the customers, like pricing can be a moving part, but then on volume front... No company would like to have whereby they'll commit on port TT, but they won't commit on the price. Okay. Okay. And sir, like wanted to understand on the current import trend, like what are we witnessing as of now in the current scenario?

40:15 Like are we seeing imports coming in or like any quantum of that if you can provide any... What it is are going down, prices are going up. Okay. Okay. Got it. That's it from my side. Thank you. The next question is from the line of Jasmine Farana from VT Capital. Please go ahead. Good afternoon, sir. Sorry for making you repeat this that you were given. Could you please repeat that? Jason, we are not able to hear you. Good evening, My question actually, you had mentioned something about the 20% growth. I missed out on that part.

41:04 So could you please repeat it? Sorry for making you repeat it. No, every quarter we intend to grow by 5% to 7%. So by the end of the last quarter, we would have grown 15 Okay. Percent to 20 And this is on the top line? Yes, this is on the quantity. Price is up quantity. We talk about quantity. Okay, okay. Great. Thank you, sir. Thank you. The next question is from the line of Rohit from iPod PMS. Please go ahead. Yes, sir. Hi. Thanks for the follow-up. So just one more question. So you mentioned that you want to increase capacity utilization by around 10 to 15 percentage points from where it is today.

41:57 So and you also mentioned to an earlier question that the margins will sustain. So are there no benefits of operating leverage? Or do you expect things to sort of some pricing pressure, etcetera, to come back? No, no, no, not that. Basically, I mean, I cannot say, I mean, I would love to work at 100% capacity utilization. So we would like to increase our sales volume because that's more sustainable, and we are okay with the current margin levels. Okay. Understood. Understood. That's it from my side. Thank you. Thank you, Rohit. Thank you. Ladies and gentlemen, we will take that as the last question of the day.

42:45 And I now hand the conference over to the management for closing comments. Thank you all the participants in this earning call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR managers as well as some advisers. Thank you. On behalf of Fairchem Organics, that concludes this conference. Thank you for joining us and you may now disconnect your lines.