Gujarat Fluorochemicals (NSE:FLUOROCHEM) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Gujarat Fluorochemicals Limited Q1 FY 'twenty seven Earnings Conference Call hosted by three sixty one Capital Market Private Limited. Please note that this conference is being recorded. I now hand over the conference to mister Rohit Nagraj from three sixty one Capital Private Limited. Thank you, and over to you, sir. Thanks, Pari. We thank Gujarat Fluorochemicals management for providing us the opportunity to hold their one q f I twenty seven conference call.

0:48 We have with us doctor, CEO and deputy managing director, along with the senior members of the management team from Gujarat Fluorochemicals. I would like to hand over the call now to Doctor. Veer sir for his opening remarks, post which we will have Q and A session. Thanks, and over to you, sir. Thanks, Rohit. Good afternoon, everyone, and a very warm welcome to all of you for GFL's quarter one FY 'twenty seven earnings call. For this call, I have with me my colleagues, Mr. Manoj Agwal, who is CFO of GFL Mr. Kapil Malhotra, who is Business Head of Fluoropolymers and Mr. Rajiv Rao, who is the Business Head of Patchery Materials.

1:38 The company announced its quarter one FY 'twenty seven results at the Board meeting held today. The results, along with the earnings presentations, are already available on the stock exchanges and on our website. I'll briefly take you through the key financial highlights, followed by an update on our business performance, demand environment and outlook. The global business environment remains challenging with ongoing supply chain disruptions, commodity price volatility and an increasingly complex operating landscape. At the same time, the businesses are adapting to these evolving conditions, creating both challenges and opportunities across market for us.

2:33 Despite these specific market specific challenges, GFL has delivered a strong start to FY 'twenty seven. Healthy demand across key product categories, disciplined execution and improving operating leverage enabled us to deliver broad based growth across our core chemical businesses. On a year on year basis, revenue from our chemical segments increased 23% to INR $15.74 crore compared to INR $12.81 crores in quarter one FY 'twenty six.

3:20 Chemical segment EBITDA grew 29% to INR $4.58 crore from INR $3.54 crore, while segment PAT increased 33% to $2.61 crore. This performance was primarily driven by strong growth in fluoropolymers and fluorochemical businesses. At the consolidated level, revenue from operations grew 24% year on year to INR $15.88 crore. EBITDA increased 24% to INR $4.28 crore, while consolidated PAT stood at INR $2.19 crore, representing 19% growth over the same period last year.

4:16 Our performance was even stronger on a sequential basis. Within the Chemicals segment, revenue grew 16% quarter on quarter to INR $15.74 crore, while EBITDA increased 30% to INR $4.58 crore. EBITDA margin improved from 26% in quarter four FY 'twenty six to 19% in quarter one FY 'twenty seven, reflecting the benefits of higher volumes and improved product mix and operating leverage. Segment PAT increased 56% sequentially to INR $2.61 crore, with PAT margins expanding from 12% to 17%.

5:13 At the consolidated level, revenue increased 16% quarter on quarter to INR $15.88 crore, while EBITDA grew 39% to INR $4.28 crore. EBITDA margin also expanded from 22% to 27% and consolidated PAT more than doubled to INR $2.19 crore, resulting in a PAT margin improvement from 7% to 14%. We also continue to make progress on key return and efficiency matrices across the quarter during the quarter, I'm sorry. ROCE improved by two fifty eight basis points to 16.6 in quarter one FY 'twenty seven compared to 14% in FY 'twenty six.

6:11 While ROE improved by three zero one basis point to 15.18% from 12.17% in FY 'twenty six. Our focus on working capital efficiency has also yielded strong results with working capital days reducing by forty three days to one hundred and forty nine days as of quarter one FY 'twenty seven compared to one hundred ninety two days as of quarter four FY 'twenty six. These improvements reflect not only the segment strength of our operating performance, but also our continued focus on capital efficiency, cash generation and disciplined execution across the organization.

7:02 Let me now take you through the performance and outlook of our key businesses. Starting with fluoropolymers, we continue to see encouraging demand trend across the portfolio, supported by improving volumes across fluoropolymers. The expansion of new age applications is creating attractive growth opportunities, particularly in areas such as semiconductors, data centers, electronics, automotive, green hydrogen and advanced industrial applications. We are also seeing a gradual improvement in product mix, supported by increasing contributions from higher value grades.

7:52 Reflecting these trends, fluoropolymer revenue grew 15% year on year and 8% sequentially during the quarter. This growth achieved despite a challenging global environment. Moving to Fluorochemicals. The business delivered an exceptionally strong quarter. Revenue increased 52% on year on year and 44% quarter on quarter, driven primarily by R32 refrigerant sales, along with healthy growth across our refrigerant portfolio. As previously communicated, we are expanding our R32 capacity, which is expected to be commissioned in Q2 FY 'twenty seven.

8:46 With existing capacity utilization already at peak levels, this expansion will enhance our ability to participate in growing global R32 market and support future demand growth. In parallel, we continue to expand our refrigerant portfolio. Our R134a project remains on track and is expected to be commissioned in this financial year, combined with our integrated manufacturing capabilities, established global marketing network and long standing customer relationships, this will further strengthen our ability to serve growing refrigerant demand across both domestic and international markets.

9:44 A more complete bouquet of products will enable us to leverage our strong brands that we built over last three decades globally. Turning to Bulk Chemicals. The segment delivered a steady performance during the quarter with revenue increasing 11% year on year and 1% sequentially, primarily driven by improved realizations. Moving on to battery materials. We continue to make steady progress in building a differentiated and integrated platform. In LiPS six salt, we are advancing both capacity expansion and customer commercialization efforts with leading global electrolyte manufacturers.

10:39 In electrolytes, qualification activities and sample development with Indian cell manufacturers are also progressing well, supported by customer audits and plant visits. Across LFP cathode active materials and PVDF binders, our focus remains on product consistency, customer qualification and commercial scale up. While these businesses are at different stage of qualification and commercialization, we remain encouraged by the long term opportunity driven by growing EV adoption, increasing deployment of battery energy storage system and the ongoing localization of battery supply chain.

11:35 As we look ahead, FY 'twenty seven is shaping up to be an important year in GFL's growth journey. Our established chlorochemicals and fluoropolymer businesses continue to generate healthy growth and strong cash flows, while battery materials provide multiple avenues for the next phase of growth for GFL. Our priorities remain clear: executing our capacity expansion projects deepening customer engagement accelerating qualification and commercialization of new products and scaling our emerging platforms in line with market demand. At the same time, we remain committed to disciplined capital allocation and a strong focus on returns.

12:29 While the external environment remains dynamic, we are confident in the underlying fundamental of our business with a diversified portfolio, integrated manufacturing capabilities, strong customer relationships and exposure to multiple long term growth themes, we believe GFL is well positioned to deliver sustainable growth and create long term value for all stakeholders. With that, I would like to thank all our stakeholders, customers, employees and partners for their continued support. We will now open the floor for questions.

13:14 Thank you. Thank tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. The first question is from the line of Sanjesh from ICIC Securities.

14:00 Please proceed with your question. Thank you. Good evening, sir. A couple of questions from my side. First, in the fluoropolymer, a 15% growth is good, but I think there was a price increase also in the segment by some of our Chinese peer. Have you seen those price increases being taken by GFR as well? And what would be the blended price increase, if at all, we have taken? Yes, Anjesh, thank you for your question. I'm requesting Kapil to answer this question. Kapil, please. Sanjay, thanks for your question. See, first of all, we have been also making this commentary from last few quarters that we are trying to move the value added chain into the fluoropolymer products.

14:55 And hence, we do not have much of a competition with Chinese people. And so our moving to the high value chain has given us these additional revenues and profits, which we are talking about. So Chinese were much anyway on a different scale of prices, so that doesn't we don't compete with them in those segments. But I think the price increase, what has gone into commodity, equivalent doesn't show in specialty because the margins are probably the prices are already better in those segments. That's the way to look at it? Sanyash, this is going to reflect in the subsequent quarters. There is no, no, sorry, I'm not getting it. So is there a price increase or there is no price increase?

15:46 No, there has been a margin price increase to come back with whatever input prices have taken place. But however, whatever price increase is small we have taken, it's going to reflect and the value added product which we have taken where we are going for newer applications that will start reflecting in subsequent quarters also. Got it. Got it. The second on the capacity expansion, which we also spoke in the previous quarter on the fluoropolymers side, Kapil, Where are the opportunity we are seeing within the fluoropolymer, and what are the capacities are we looking at probably product wise in this new way of growth in the fluoropolymer side? So Sanjesh, coming back to the opportunities, if you recall, we have always been saying that there are emerging opportunity from the Sunrise sectors, okay?

16:44 Whether these are batteries or semicon. So we'll be adding capacity going forward, mostly in new set of fluoropolymers, which we have categorized it earlier. So we'll continue to add capacity, but specific, which we will focus on, I think I would like to keep that confidential from our standpoint. But there's a tremendous growth opportunity there, Sandish, okay? And as I had said it earlier also that we had put the capacity on new fluoropolymers, which is almost to the point of now getting fully utilized. So we will making investments in adding more capacities in these fluoropolymer, which will be catering to these new opportunities, okay?

17:34 So clearly, wherever we'll be adding, it will all be at a very high end product range. So earlier, we were targeting a 20% kind of a growth that's now visible for this year and the year after this? Absolutely visible. Absolutely. Got it. Second on the RefCAS side, now when is this R134 expected to get commercialized? And what is the revenue size we are looking at with this expanded base of capacity in the refrigerant gas for us? Sanjesh, we are expecting to have this capacity by the end of the financial year. In fact, we are targeting earlier than that. We have not yet announced capacities yet, okay?

18:25 Because as you know, we'll have because we have a refrigerant multiple products. It's a bouquet. And depending upon the product mix, we'll probably be going to the market. But we have not announced the capacity yet. And probably next few quarters, we'll share that. Okay. Got it. Got it. One last on the battery chemical side. Where are we exactly in the cycle of commercial supplies? Because right now, what we see is a $20.30 crores of revenue while the capacity what we have put appears to be a much larger capacity. So when are we looking or expecting a step up jump in the revenue from the battery chemical side? And what are the segments which will contribute to this growth?

19:20 So let me take step by step, okay? What we have always stated is that we are initially, we build certain capacities for qualifications and then subsequently, capacity addition is done to grow. And if we talk about the significant growth, we are probably will be seeing toward the end of this financial year and FY 'twenty eight, okay? We'll see a significant traction. Because the capacity that we have added, if you look at our glass block, which has been capitalized, still not that very large, okay? While we are making investment in terms of building capacity, but the capacity which has come on ground and which has actually being commercialized is still because there's a long gestation period in building and setting up capacities, okay?

20:20 So to answer your question, we will see a ramp up. In fact, unfortunately, the numbers this quarter also, we had dispatches, but because some of them are not reflecting in our revenue numbers because those are all CIF terms. So they will probably reflect in the next quarter. And so the journey will continue. You will see significant growth quarter by quarter in the revenue as we go along. Clearly, the first and the foremost in this is growth in LIP six, which we started very early, if you recall, and that's now has almost finished qualification. It's going through its growth phase. The second one is LFP and PVDF.

21:09 PVDF is very close to getting finalized its qualification. We'll see revenue coming from it. And finally, the cathode active material, I think that will probably we'll see maybe towards the end of this financial year. But the full potential, if you're talking about the investment that we are making, it will start reflecting from FY 'twenty eight onwards. And because there is almost a one point five year, I can say, in stabilization and getting the qualification done. This is the nature of this industry. And will that same apply for the incremental INR 2,300 crores of CapEx? Or that ramp up will be faster because the qualification round is over?

21:55 That is expected to be faster, Sanjesh, because once we have qualified, so the initial plans is for qualification, stabilization, establishing our supply chain and credibility with the customer. And then the next phase is because the battery market itself has a strong growth potential, okay? And initially, we were talking globally, and we are talking about reaching almost 1,800 gigawatt hour by 2030. But now when we look at our domestic market itself, domestic market also we are because of the driven by primarily by BESS is almost looking at two twenty to two fifty gigawatt hour by 2030.

22:47 So we are seeing a huge market potential, which I think we will capture as we go along primarily in 'twenty eight, 'twenty nine. And of course, that will be much faster than the rate that we have seen now so far. Thanks, Sanjay. Thank you. Thank you, sir. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from the participants in this conference, please restrict your question to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Arun from. Please proceed with your question.

23:38 You for the opportunity. Good evening to everyone. So my first question is on the 134 a plant announcement. You earlier in the call, you said that capacity has not been announced. But in our late June filing, we have indicated we are going to add on 134 capacity. Can you just clarify this point, please? Arun, capacity, we have not announced yet, okay? But we will have whatever our plans are, we will have this capacity by this financial year. That's what we have stated. And that's what I think we said in our the release also, the press release or what we communicated earlier.

24:30 So 134, we are setting up the capacity. And just to I think we have said this last time also that with these, we'll probably be utilizing our entire entitlement quota with R32,134A, 'twenty two, 125. So we have a very large bouquet of products that we'll have by the end of the financial year to offer to our customers. Sir, what is the reason for entering one hundred thirty four years so late in the not running into the HSCs? Is there any is there is there a sign that the quota will be allocated on a pro rata basis on the capacity held by the players. Is that No.

25:18 No. The decision is the strong market opportunity that it faces. And I think as you know, that refrigerants towards end of their cycle, they it becomes a valuable business proposition. So we see an opportunity in getting into 134 for multiple reasons. And of course, these are some of them are strategic reasons, which I cannot share. But we think it's a wonderful opportunity to be there. It's a space where the supply in future would be restricted. We do not see several other supplies coming in. And demand is will continue to be there.

26:05 It's a robust demand and the alternate to 134 A are HFOs, which which has a very high price point. So we see a strong market potential and opportunity for us to be there. In the next twelve months till our new capacity going to... I don't know. Lost around ten seconds. Could you repeat your question, please? Right, sir. I talking about the Fluoropolymer business. Now that we are very close to our utilization levels, and so till we get our new capacities in place probably in a year or so, our growth from in this segment will be largely dependent only on the pricing related actions that we'll be taking.

27:02 So we should not expect any volume growth or any mix change that growth? I'll request Kapil to take this. Arun, please. Arun, it's a combination of both, the price realizations as well as some of the debottlenecking, which we keep on doing to enhance our capacities to match the market requirements. So that keeps on happening in these products, which is happening now also. Any time line for capacity debottlenecking? It keeps on happening. Every second quarter, we keep on debottlenecking. Whenever we see that we are reaching our capacity utilization, then we balance our capacities accordingly to the market. It's a continuous process.

27:50 Understood. Understood. One bookkeeping question to Manoj. We are seeing the difference between standard, it's always increasing on a sequential basis. Arun, could you again, your voice is breaking. Could you come up again? Manoj is here. Further question for Manoj, please. Yes. The difference between the stand alone and console is increasing much higher than the EV segment top line growth. Is there anything else just contributing to this increase? No. See, standalone and console also reflects our GFL EV, GFL USA LLC and GFL GMH, where we do all our polymer business that are routed through Germany subsidiary and The U. S. Subsidiary.

28:41 So that business doesn't reflect in the stand alone, whereas the console business, it comes. That is also the reason, not only the EV. Okay. But why in the last two quarters, this increasing, especially if it is coming from only Fluoropolymer business? Last quarter this quarter that some of the CF consignments were there and GIT earlier, which we have booked in Germany and LLC, instead of that, we have booked in standalone itself, reversing the standalone itself. So the gap between standalone and console is higher on account of that. Understood. Understood. Thank you very much. You can have it.

29:27 Thanks, Arun. Thank you. Thank you. The next question is from the line of from. Please proceed with your question. Hello? Hello? Hello? Am I audible? Yes. Please continue. Yes, sir. You're audible. Congratulations on both sides. Audible, please. So, basically, sir, I wanted to know on your R 32 side expansion. So are you planning for any additional h f expansion on your side or the h f expansion on your side? Or... Because R 32 is globe... R 32 has immense demand and your competitors are also increasing the capacity for R32. So are you planning for any additional R32 or additional backward integration at FLUOROCHEM:] Yes. I think we mentioned that last time as well that we'll be adding Ahref capacities because as we are growing capacity adding capacities in R32 as well as 134A, it will require, I mean, significant AHF for these refrigerants.

30:44 And AHF is also required for our other products as well. So we will be adding capacity, and we have already announced that, I think, that capacity by adding... By what time that will be live? By what time that will be live? It will be in different phases. The first set of capacities will be there probably by the end of this year or the third quarter. And then subsequently, every quarter, it will there'll be some capacity will be added because it will be matched with our refrigerant capacity being added. So And you will not sell HF or HF outside, you will only use for internal purpose only? Right now, aim is to look at the captive, okay, because that's our purpose at the moment.

31:31 Okay. And one more question on the quota side. So the base players which are there will definitely get quota. But will the new players get quota, or will we only gain quota? Can you give some clarity on that side? So the existing players which have produced r 32 will r 22 will get quota, Or will new players also be able to get quota from us? Or they will also able to participate? And R 32 has massive demand and supply is currently limited if new players are not given quota because any new capacity is not coming? So of course, I cannot comment on the who will get quota or not because that's a decision which is not resting with us.

32:21 But all we can say that the past precedents indicate that this is given based on the baseline, okay? There is a formula which is there. So we from our side, we know what is our entitlement And our expansion plan is based on that we will be utilizing at least whatever our entitlement is based on the GWP that we have. And the formula, you are already aware of. Yes, yes. Correct. There were two components to it. So I cannot really comment on who in the new player will get quota or not because that's a decision which is vesting with somewhere else. However, from our side, we are already adding capacities based on what we think is our entitlement based on the past Thank you.

33:25 The next question is from the line of from Odila Lotfoss Financial Services Limited. Please proceed with your question. Yeah. Hi, sir. I have question on CapEx. So out of the CV for 1,900 crore, how much is expected to be capitalized in FY twenty seven? I think we'll probably we expect right now, our block is around INR $8.36 crores. And because the capitalization happens on two there are two triggers to it, okay, Lumpka. The first trigger, of course, is when we start the plant. And second is when the plant is giving its product based on what the intent is for it to produce, which means it gets the right quality or so, okay?

34:15 So while mechanical completion of the plant is in our hand, the quality stabilization often varies from plant to plant. But we expect by the end of this year, these numbers to be around INR 1,200 crores. So like this would be a specific amount you're talking about? Which amount? I'm sorry. Capital working process, 200 crores. Right, right. So this will be inclusive of this INR 3,000 crores of CapEx also, right, which will be incurred in this amount? Further adding. That will be added further, Ungkar, because see, we have a plan of adding total what we have announced is INR 6,000 crores, okay?

35:03 Yes. So today, there are certain CapEx, which we have already capitalized, which is reflecting in our gross block. Then we have CWIP. And then we have a plan to add more CapEx as I had announced in the last quarter call in next two years, okay? This year, our CapEx spending plan in EV is INR 2,300 crores. And in our chemical business, it's approximately INR 800 crores. That's what we had said earlier. And we are holding on And to that CapEx plan as of what will be capitalization for this two CapEx?

35:50 Capitalization for these two will come later on because we also have CWIP from at this point from the earlier years, which will get capitalized going forward in this year, okay? Because the CapEx spending and capitalization, there is a lag, as I indicated earlier. Thank you. The next question is from the line of Tejas from Insight Human Resources Service Limited. Please proceed with your question. Good evening. Thank you for the opportunity. Firstly, we had indicated about the CapEx of close to 216,000,000 in Oman for second half of battery materials project.

36:38 So just wanted to understand what is the status of this project? Yes. The Oman project right now, have put on hold, okay? And we are in fact, what we are doing is that those CapEx is now we are bringing into India and planning to add those capacities in India. And there are multiple reasons for it. There has been certain, of course, geopolitical reasons, which was causing certain delays in our project. And in view of that, we decided to move those capacities to India so that we can move faster and meet the customer commitment that we have given, okay?

37:29 So Oman, I think project, of course, we'll come back to it. But as of now, we have put that on hold. Got it. But there was related to the Aman project, there was a funding of close to INR 1,200 crores, which was also expected to come from OIA. So with now the project shifting to India, does this funding round also get sort of canceled? Yes. At least the funding that was from a sovereign fund that we had said earlier, specific to the Oman project, that was approved for that particular project. So when we bring it to India, we will have to look at the separate funding. And we have those things in place.

38:20 So I think we will but those funding will not be taking for the one project. Those are again also on hold. Those are already approved, and we have it. But since we have relocated the project as of now to India, those at least the funding that was approved for the Oman project would not be available for the India project. Got it. So does it shifting of your Oman CapEx to India, does it also is on account of the battery components, PLI, which is expected to sort of come through for these battery chemicals? There are multiple reasons. Of course, there is a the overall environment in India for the battery industry is looking much better now than what it was last year or a year before.

39:13 Part of the reason is driven by the domestic, as I said earlier, is the projection for the domestic market, which is for the driven by the BEST. And there are other push, which is coming from the policy side is also making this market opportunity very attractive for us to be in. Understood. One last question on The U. S. Polymers side. Last quarter, we had indicated a CapEx of close to 50 crores for debottlenecking activities. So within The U. S. Polymers space, could you just highlight which products are we seeing higher traction and where we are planning to expand capacities on?

40:01 Yes, I think I'll request a couple for the fluoropolymer capacity. I think you want to add one? So in fluoropolymers, obviously, our growth opportunities was primarily in the new fluoropolymers, which I think I said earlier also. So we'll continue to focus on these opportunities. When we say debottlenecking, those are related to some very specific grades and products where we see certain more growth opportunity. But the focus going forward continue to be the new fluoropolymers. Understood. No, I just wanted to know within the newest fluoropolymers of which products, PVD, FFK and PSA amongst these products, which we have under newest fluoropolymers?

40:52 Where are we seeing the highest spectrum and where are we expanding on the capacity side? I just wanted on the product specific side. Obviously, PVDF is driven by the battery requirements. PFA, SKM, they're all driven by the requirement that we are seeing from semiconductor. Kapil, do you want to add more? Yes. So as we have mentioned that some of the new sunlight sectors, we're talking about some expansions are coming up in semiconductors in India and also in part of the world. We're also seeing green hydrogen also coming up pretty nicely now. The pilot projects have started coming up with commercial projects to follow.

41:37 And then also in the data centers also, we have seen some of our fluoropolymers getting approved and some commercial business coming now with us. Future business is also going to come as the projects get approved. So we are focusing on those products, which are going to get aligned with these Sunrise sectors, as Doctor. Kapoor is mentioning. So our products will keep on getting added as and when we keep on getting the traction from these sectors. And based on that, we'll do our CapExes and debottlenecking. The next question is from the line of Naresheet Chaudhry from Aditya Birla MS. Please proceed with your question. Yes. Hi. Thank you for the opportunity and congrats to the team for decent set of numbers.

42:28 Follow-up on the Oman, this funding as we have now shifted the plan from Oman to India and that fund would not come. So would it trigger fundraising or the internally we can manage this investment? Thanks, Nasha. We are already our fundraise process is on, and we are raising as we're going along in terms of our fund requirement. Clearly, the fund in Oman was raised, which is very specific to Oman project, okay? Now coming back to India, we will, I think, continue to raise funding for these projects.

43:17 But as of now, we do not see that as any constraint to put on the project or add capacity. Okay. And for additional deployment of roughly INR 4,000 crore rupees in the petrochemical, how much land would require? And how much do we have? And how much we need to buy more? So when while moving Oman project, the first phase of the project, we have land available in our existing HB plant, which we call Joga plant. So we have all the elements are in place.

44:04 We have the required approvals and clearances to execute these projects, availability of the land, infrastructure and the site infrastructure support to execute it. We are also adding one more site, again, in the hedge area, which will probably be utilized. So land, we do not see as a constraint, not sure, going forward because our immediate expansions will be done in the Haiti site. And subsequently, we'll be adding more sites one more site in the Haiti area to take care of our expansion, which will be in FY 'twenty seven toward the end and 'twenty eight.

44:53 And last on the anode active material we announced last quarter, wanted to understand what would be the size of CapEx for this particular product? And what is the synergy we have on this versus our base business? I think, Rasha, we have not given any CapEx, which is product specific for right reasons. So for anode, we have not announced the CapEx or specific CapEx that we talk about because it's something which is I believe it's confidential in a way because it's something which is a confidential information for us. The next question is from the line of from.

45:52 Please proceed with your question. The next question is from the line of Arun Prasanth from Amandas Bank. Sir, my we have planned. So so now that we the plan, are we selling it primarily in the domestic markets or export markets? And going forward also, what will be the combination of spot and contracts? R32, any clue on this?

46:40 Arun, could you come again, please? Because again, we lost in between your question. So your question is specific to refrigerant or battery materials? Sorry, sir. I'll just repeat. For some reason, the connectivity is not so good here today. The primary question was on the R32. Are we now that we have started the plant, are we selling it primarily in the domestic market? Or are we exporting also? Second, what is the nature of the sale? Is this spot or contract? And how you think this will shape up up in the when is the new plant also comes up? So again, this R32 is for the global market because we have a long legacy and experience in marketing these refrigerant products across the globe.

47:31 So when we are looking at R32 as a product, we are looking not only domestic market, but international market as well. Now coming back to what kind of whether it's a long term contract. So it's a combination of both, okay? And it would be difficult for me to give the percentage, but ask me to probably, I can say, probably 40%, 50% would be our long term contract. And then remaining one would be on spot or contract to contract. Understood. Since it is for largely for our global markets and the sales in domestic will be limited, does it also mean we will not be gaining any consumption quota from in the 2,000 whatever we are selling in 2026?

48:26 I think the quota is based on the production capacities, which we already discussed earlier. It has two components. One is based on the baseline and then the actual production between 'twenty four, 'twenty five, 'twenty six, these three years, okay? So I do not understand your question regarding the consumption quota. It's all in the production. And that quota applies to us, whether we are selling in domestic market or exporting it. Sir, my understanding is the producers are entitled for production quota. And whatever you sell in the domestic market that gives you consumption quota, is it any different?

49:19 Yes. I think I'm not really clear about it, Arun. Let me check and come back to you on this. You can connect with Pallavi on this. We'll clarify. I'm a little bit confused about the consumption quota right now because my understanding is for the manufacturing and the production quota. And that's what we always talk about, which is based on certain formula and the GDP GWP basis. The next question is from the line of Dhruv from HDFC ANC. Please proceed with your question.

50:05 Yes, sir. Thank you so much. Sir, can you say what is the what was your RTT utilization this quarter? It's almost fully utilized with the capacity that we have. So 10,000 tonnes almost fully utilized for the quarter. I think because as we are adding capacities, so but whatever capacity we have currently is fully utilized there. Got it. And sir, given that you're exporting primarily, will there be a lot of difference because now we don't get the data. Is there a lot of difference between domestic pricing and the export pricing? I'm just trying to understand how should I think of the numbers. Normally, we don't comment on the pricing, but in this particular case, I can say they're very close.

50:52 Okay. And sir, last question, your Polymer business has grown by about 15%. So there was a question earlier, but is it possible to split it between volume, pricing and mix? The growth Y o Y? It's difficult to give, Dhruv. But I think it's I don't think we can share. We have never shared the very specific like that. But primarily, this is driven by, as I said, two things: higher grades, which is new fluoropolymer volumes. And in some cases, within the existing products that we have, some of them, we are going for the higher and higher grade to get a better value. So it's a so I would not call it a price. I would call it the value. So where we go up the value chain in terms of the product mix.

51:45 So more of mix and some of volume? Correct. Correct. Right. The next question is from the line of Neet from GM Financial. Please proceed with your question. Hi, sir. Thanks for the opportunity. First question was on R134a. So are we putting up this plant as a greenfield or a brownfield expansion? And also, how are you planning to source trichloroethylene? Because I believe it is a fairly restricted product globally. So are we planning to backward integrate into that as well? So it's a brownfield expansion, 134.

52:31 It's in one of our existing sites, which is producing refrigerants. As far as the TC is concerned, we are not planning to go backward integration right now. And we'll be importing it from outside India. And we have identified suppliers, and we do not see that as a constraint going forward. Okay. So TC import from China is, at this point of time, being freely done into India? Yes. It will be imported from outside India. Sure, sir. And sir, second question, so just wanted to understand how do we structure our fluoropolymer contracts?

53:18 Because in 1Q, despite sulphur prices going up by around 3x, 4x and fluorophore prices also going up, we have not taken any price hikes in our core fluoropolymers portfolio. So does that mean that margins in 1Q in fluoropolymers will be lower than what we have seen previously? And because of mix only, we have seen this improvement? Neet, whenever there are we have some formula based understanding with our customers, prime customers. So whenever such things happen, we always have those formulas, which are there to protect us. So that is why you must have seen the results also of the last quarter that we have been able to protect our margins. Okay. So we would have taken formula based price hikes as far as the raw material price increase is concerned? Yes. So we have been able to manage the price, whatever cost increases were there through other formula based pricing or with an understanding with our customers to mitigate our risk accordingly.

54:23 Okay. Understood. Sure. Thanks. That's all from me. Thank you. Thank you. The next question is from the line of Ankur Periwal from Axos Capital. Please proceed from your question. Yes. Hi, sir. Thanks for the opportunity. Sorry, I joined the call a bit late so far, and if there is a repetition. First, on the fluoropolymers growth, there is was there any price hike that we took? I'm not asking about magnitude, but have we taken a price hike? Or let's say, it's more Q2 onwards that there will be a price hike impact coming in? Hello?

55:15 Sorry, Yes, sir. Sorry. The thing is that... I was audible. Yes. Yes, I can hear you, Ankur. Typically, what we do is when there's a volatility in certain prices, as Kapil was explaining, we typical tend to pass on that price increase to our customer, okay? These are essentially to address some of the input costs, okay? Whether, for example, when the oil prices went up and there are certain raw material that we have, for example, like methanol and sulfur, which went up. So those price corrections normally we take. Those are small corrections, and that's a common practice we continue to tend.

56:01 And there were volatility, as you know, in March 26 onwards. So those corrections that we have taken. However, I would like to emphasize here that those are the corrections typically done to ensure our margins and maintain our our target margin that we have, okay? Now a lot of the growth that we are seeing right now in fluoropolymers that we have indicated 15% to 20% annually is driven by two things, okay? Let's understand. One is the product mix that we change, go for the higher and higher grade product. And second is adding volume from our existing new fluoropolymers, which we expect to get fully utilized very soon. However, a lot of it is coming because there is a regular growth because then we make a particular grade, it gets qualified and then slowly, the volume ramped up. So what you see today is a combination of the two, Gujarat.

57:14 Because price hike, when we talk about because of the inputs is marginal, okay? Because that's just to cover what the input costs are, okay? And the value that and the product that we make are all high end materials, okay? Where the input costs are there, but it's there is a lot of component in it is for the know how, which goes into these high end products. Praful, you want to add? Yes. And also one thing, as we have been mentioning that these high end grades and high end products, obviously, the approval process is slightly longer from the niche application.

58:00 And now we are in a cycle where we are constantly having these approvals from our customers globally. So every quarter, we keep on adding those approvals and every quarter, we keep on adding those commercial volumes also as and when we keep on getting the approvals. And that's how we balance our capacities and that is how we balance our margins also in the growth. Sure, sir. That's very clear. And just from an approval perspective, as you said, a large part of this all these approvals should be in place within this financial year so that when the new capacity comes in, there could be a quicker ramp up there. Will that be a right understanding? Yes, you are absolutely on the lot. We are in the midst of getting approvals. And yes, by the end of this financial year, most of the approval will be in place.

58:47 And commercially also, we will be taking the volumes on further up in the second half of this financial year. Sure. Because there's no follow-up approval because it's newer site or new production. So you don't need a follow-up approval for these two Just up verifying that. No. It's just a follow-up of whatever approvals we have got. And then the capacity additions, we'll just take the volume further up as the demand keeps on ramping up. Great. And just second bit on R32. I know you answered that question partially. A combination of long term and spot sales is what we are doing right now, probably more on the on the export side. For the incremental additional capacity that will be coming in, will that be also similarly, you know, largely contractual or how are you looking at it? And amongst the global markets, which geographies are we focusing on, if you can help on that?

59:43 So it's a combination of the both because as we get more and more materials, we are looking at marketing it across the globe. So I think we are it goes into different geographies. We are not particularly focusing R32 for a very specific geography, okay? But all I would like to add is that, that R32 from our perspective also goes in combination to four ten because we are one of the few players who has 125 and R32 both available. So we are in a very unique position, Ankur, to not only sell R32 as it is, but also as four ten blend, okay?

1:00:29 So it's a combination of the two. Sure, sir. Helpful. That's it from my side. Thank you. Thank you. Thank you. The next question is from the line of Rohit Nagraj from three sixty one Capital. Please proceed with your question, sir. Thanks for the opportunity, and congrats on good set of numbers. So first question on the battery chemicals, given the cleanup that we are expecting, are we on track in terms of getting that three digit revenue number by Q4 and a significant scale up in FY 'twenty eight? Yes, Rohit. We are on track and meeting our targets, what you said, three digit in quarter four and significant ramp up in the following financial year. Thanks, Rohit. Yes. Sure.

1:01:28 Second, on R32, once the additional capacity is commissioned, again, based on our contracts in terms of domestic as well as exports, do we expect full utilization during calendar year 'twenty seven for the incremental I mean, total 20,000 tonnes of capacity? Yes. We expect full utilizations. Based on our understanding of the market as and when we have the capacities, we are looking at able to market it, full utilization. Right. And one last question on fluoropolymers. Given that three ms had exited last year and AGC has also indicated that they want to shut down the U. K. Facility, are we experiencing the impact of three ms now?

1:02:21 And if the AGC facility goes off stream, will we see additional demand for our products, given that the void created by them should be taken by the incumbents? Thank you. Yes, couple, please. Roy, so Centimeters is now even to the past now. So in the last two years, we have more or less taken the full impact of whatever Centimeters as it happened. And so whatever growth we are seeing in the higher value added chain, a couple of reasons are because of that also. So because they vacated the high end market, so we are entering into that high end market because they vacated that space. Now coming to AGC, that announcement has just come yet. So we are we have started getting some queries and inquiries from the customers who are using their material.

1:03:11 And again, the good part is that more or less whatever they were making, we have the grades available with us. So our qualification process also started with the customers who were their customers. So we that also traction we'll see, not immediately, but probably a quarter or two down the line. Ladies and gentlemen, that was the last question from the participants. I now hand over the conference to management for their closing comments. Over to you, sir. Thank you. Thank you very much. I would like to thank you all for your continued patronage. And as we have been guiding in the past, the CapEx we have incurred over the past couple of years have now started to contribute to our financials meaningfully, and we expect to grow further from here on.

1:04:08 Fluoropolymers has done well and expected to grow, as we had said earlier, 17% to 20% annually going forward as well. Again, primarily on volume as well as the high value products. Fluorochemicals segment has emerged as a very strong contributor to our financial and is expected to contribute meaningfully to our profitability going forward. Advanced battery materials segment, after a very rigorous qualification and approval process, will now start to contribute to our financials and growth. This segment will see sticky growth over the next few years, driven by demand explosion and our global positioning in this segment.

1:05:01 I can say with confidence, we are very well placed to witness strong growth going forward. And with this, I would like to thank you all for your interest in GSL. Thank you. Thank you, everyone. Thank you. On behalf of three sixty one Capital Market Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.