Gujarat Fluorochemicals (NSE:FLUOROCHEM) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Gujarat Fluorochemicals Limited q two and h one FY twenty seven earnings call hosted by Dan Capital Advisors. 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. Please note that this conference is being recorded. I now hand the conference over to Mr. From DAM Capital Advisors. Thank you, Gujarat. Thank you, Vikram. Good evening, everyone, and welcome to the Q2 and H1 FY 'twenty seven post results earnings call of Gujarat Fluorochemicals Limited. On behalf of DAM Capital Advisors, we thank the management for providing us with this opportunity.

0:56 Today from the management, we have with us Doctor. Beer Kapoor, the Deputy Managing Director and CEO of Gujarat Fluorochemicals and along with him, the other senior members of the management team. I would like to hand over the call to Doctor. Beer Kapoor for his opening remarks, post which we can open the floor for Q and A. Thanks, and over to you, sir. Thank you, Karan, and good afternoon, ladies and gentlemen. I welcome you all to Gujarat Fluorochemicals Limited's Quarter two and H1 FY 'twenty seven Earnings Conference Call. For this call, I have with me my colleagues, Mr. Akhil Jindal, who is Group CFO Mr. Manoj Agrawal, CFO of GFL Mr. Kapil Malhotra, Business Head of Fluoropolymers and Mr. Rajiv Rao, who is the Business Head of our Battery Materials.

1:52 Thank you for taking the time to join us today. I hope you had an opportunity to review our financial results and investors presentation, which are available on the stock exchanges and on our company's website. Let me begin by briefly touching upon the broader global environment. The world continued to navigate to multiple uncertainties ranging from the ongoing conflict in Europe and developments in the Gulf Region to evolving trade policies, tariffs, volatility in financial and bond markets and climate related uncertainties.

2:38 Such developments have become an increasingly familiar part of the global operating environment, requiring businesses and economics to continuously adapt. Amid these challenges, it is encouraging to see how India has demonstrated remarkable resilience despite unprecedented external shocks and geopolitical uncertainties, the country has maintained its growth momentum, supported by strong domestic fundamentals, robust demand and a resilient economic framework. India's ability to navigate this complex global environment, while remaining firmly on its growth trajectory is particularly encouraging.

3:33 Against this backdrop, at GFL, we remain firmly focused on strengthening our position as a globally integrated fluorine chemistry and advanced materials company. Our strategy continues to be anchored around three key pillars: strengthening our core fluoropolymers business expanding our fluorochemicals portfolio and building a scalable advanced battery materials platform as a future growth engine. During the quarter, we continued to make progress across all three strategic priorities. Our efforts remain focused on expanding manufacturing capacities, strengthening technology and product development, enhancing backward integration and progressing customer qualification across our businesses.

4:35 Let me touch upon Chemical business first. Chemical segment revenue increased 42% year on year to $17.23 crores, reflecting a healthy demand across the fluoropolymers and fluorochemicals portfolio. EBITDA grew 33% year on year to INR $50.05 crores with sequential growth of 10%. Demonstrating sustained operating momentum, Chemical segment's PAT increased 46% year on year to INR $2.90 crore, outpacing revenue and EBITDA growth with increased PAT margin.

5:24 On consolidated basis, our quarter to FY 'twenty seven revenue stood at $17.60 crores, registering a growth of 45% year on year and 11% quarter on quarter and EBITDA for the quarter stood at INR $4.73 crore, registering a growth of 32% year on year and 11% quarter on quarter. The EBITDA margin for the quarter was steady and stood at 27%. The margin reflected the resilience of our operating performance despite the evolving market environment. Profit after tax for quarter two FY 'twenty seven stood at INR $2.40 crore, representing a growth of 42% year on year and 10% quarter on quarter.

6:24 Coming to the segment wise performance, our Fluoropolymers business continued to deliver healthy growth, while Fluorochemicals witnessed a particularly strong performance during the quarter. Coming to our Fluoropolymers business. Revenue for quarter two FY 'twenty seven stood at $9.31 crore, registering a growth of 22% year on year compared with $7.64 crore in quarter two FY 'twenty six. On a sequential basis, revenue grew by 2% from INR $9.14 crore in quarter one FY 'twenty seven. As indicated in our previous interactions, we had guided for an annual growth of 17 to 20% in our Fluoropolymers business.

7:18 We are pleased to have delivered 22% year on year growth this quarter, and we remain confident of sustaining this growth trajectory going forward. We continue to see healthy demand across several application segments, particularly in high performance and specialty applications such as FKM in automotive sector and PFA and modified PTFE in semiconductors and data centers. Our strategy remain focused on moving towards higher value products and specialty grades, which are finding increasing applications across semiconductor manufacturing, electric mobility, electronics, chemical processing, renewable energy, data centers and other advanced industrial applications.

8:18 During the quarter, our focus remained on capacity debottlenecking with plans to undertake additional growth CapEx over the next one year. We also continue to focus on improving our product mix, enhancing operating efficiencies and progressing with customer approvals for newer grades. Moving to our Fluorochemicals business. Revenue for the quarter stood at INR $60.07 crores, registering a growth of 135% year on year compared with INR $2.58 crores in quarter two FY 'twenty six. On a sequential basis, revenue increased by 33% from INR $4.58 crores in quarter one FY 'twenty seven, largely growth driven by growth in refrigerants, particularly R32.

9:18 The full utilization of R32 capacity will further strengthen our market positions through higher volumes. We are seeing healthy demand visibility for R32, supported by the increasing adoption of R32 based air conditioning systems across major markets, particularly as the industry transitions towards refrigerants with lower global warming potentials. Refrigerant demand and pricing remains stable in near term, providing a supportive operating environment. Our R134a project is progressing as a part of our strategy to expand and diversify our refrigerant portfolio and is expected to commence production by quarter four FY 'twenty seven.

10:15 The addition of R134a will further strengthen our presence in the refrigerant market and provide access to additional customer segments and applications. We remain focused on building a comprehensive refrigerant portfolio, including R22, R32, R125, R410 and R134a, while utilizing our manufacturing capabilities and regulatory entitlements effectively. Our bulk chemical portfolio reported a revenue of INR 151 crore in quarter two FY 'twenty seven compared with INR 158 crore in quarter two FY 'twenty six, representing a decline of 5% year on year.

11:05 On a sequential basis, revenue declined by 8% from 164 crore in quarter one FY twenty twenty six, primarily due to lower caustic soda prices and higher captive consumption of chloromethanes for R32 production. One of our key strategic priority is building a globally competitive advanced battery materials platform to our subsidiary, GFC Levy. We believe the global battery materials industry represents a significant long term opportunity, supported by the growth of electric mobility, energy storage systems and the increasing localization and diversification of battery supply chains.

11:55 Our objective is to establish an integrated battery materials platform, leveraging our core strengths in chlorine chemistry, manufacturing capabilities, process technology and backward integration. LIPF6 sales is ramping up well with sales to five major global electrolyte players. Production is being progressively ramped up along with new plants being added to meet strong customer demand backed by multiyear order visibility. On CAM material, LFP, plant samples are progressing through customer qualification programs globally, including India.

12:46 We are now progressing towards development of higher end LFE grades. In view of the strong emerging global market demand, further substantial capacity expansions is underway. Multiple PVDF and PTFE grades are at advanced stages of customer qualifications across both wet and next generation dry electrode applications. Customer engagement remains strong, particularly in U. S. And Europe. With customer qualification programs progressing, commercial supplies under long term supply agreements are now expected to commence from quarter four FY 'twenty seven. Electrolyte engagement continued to progress well with domestic cell manufacturer across EV and BET applications.

13:41 Customer specific formulations are being developed and supplied from our commercial plant for evaluation and qualification. We expect domestic electrolyte demand to pick up towards the end of next financial year. As discussed in our previous interactions, the battery material business is transitioning from the development and qualification stage towards commercialization. The business has a significant growth opportunity over the medium to long term. However, the pace of ramp up will be linked to the customer qualification time lines, commercial approvals and capacity ramp up. We believe our integrated fluorine chemistry capabilities, diversified product portfolio and investments in emerging growth areas position us well for sustainable growth.

14:41 The investments undertaken over the past few years are aimed at creating additional growth engines for the company. With this, I would like to conclude my opening remarks and open the floor for questions. Thank you once again for your continued interest and confidence in Gujarat Fluorochemicals Limited. I will now hand over the call to the moderator to begin the question and answer session. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, may press 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press 2.

15:32 The first question is from the line of Ketan Gandhi from Gujarat Securities. Please go ahead. Sir, there is two questions. One is how adoption of dry process for cathode using PTFE is happening in the world? And what is your view on likely positive impact on our sales on PTFE? Yes. Thank you. Thanks, Gujarat. Thanks for asking question. The dry electrode is being one of the holy grails and various companies are trying to develop it.

16:24 Some of them have progressed well. Of course, it's at the advanced stage of commercialization. What we believe is that the PTFE grades have a very strong role to play in this. And several of our grades are at the advanced stage of trial in this case. And certainly, it's a very huge upside for the PTFE business as a whole because the demand as more and more battery manufacturers move towards the dry electrode systems, the demand for PTFE will continue to pick up. But we are very optimistic about this to happen very soon because this has several advantages from the manufacturing perspective because there's no solvent evaporation, no solvent recovery, and it's environmentally a very positive step.

17:28 Sure. You're seeing a lot of traction, right, in the world? Yes. At least we are talking to few of the because there's research is going on, but there are one or two who are very close to commercialization. Fantastic. And sir, there is a second question on our plant coming up at Janiadhara for semiconductor I mean, electronic chemical. Do you want to share at this moment something regarding WF6, C4F6, NF3, F2N2 and PFPE? What are the asset I mean, what are the CapEx, likely CapEx, asset turn and margin? I'm okay if you don't want to share it at this moment. I mean, I We don't haven't mentioned any of the chemical that you mentioned. So but let me tell you, I mean, we'll probably share it in next few quarters, given why we are still because it's very early stage of discussion and conceptualization.

18:28 And obviously, you must have read it in the new, there's a very strong focus from the government to promote this particular sector. So we believe it's a very strong area to play in. And particularly with our expertise in fluorochemicals and fluoromaterials, there are several opportunities. And we will share it in due course of time. I cannot mention the product or the CapExes at this point of Sure, sure. No issue. But this sector looks very exciting, sir, because only handful of player is doing this, only one or two Japanese player. And if India, if we are doing, then it will be It's good for the company as well as good for the country. All the best, sir. We agree. Thank you. Thank you. Next question is from the line of Sanjay Sjain from ICICI Securities. Please go ahead.

19:21 Yes. Good evening, sir. Thanks for taking my questions. I got few of them. First on the fluoropolymer. If I see the export data, it appears that there is a sharp increase in the realization and probably partly the 20% revenue growth what we have achieved is also because of this. Can you help us understand what is the volume and value growth and how is the mix changing from PTFE to new fluoropolymer? So on a blended basis, how is the business moving? And this 20% growth, is it sustainable for next two to three years or or we are more looking at this year only? Thanks, Satish. I'll request Kapil to take this question.

20:13 Sanjay. Good afternoon. Hi, Praful. Good afternoon. Thanks. Thanks for your question. So yes, whatever growth of 22% we have seen from the last year to this corresponding year, It's growth of the volume also. And also, if you remember, I've been also saying that the conversion towards the advanced applications with a higher value, that has also started happening now. In the last one or two quarters, it has started happening. And it is pace is also now developing faster. Every subsequent quarter, we are seeing that the high value addition application where we got the approvals are contributing every quarter. So that's why you see that one of the reason of the higher value is also due to the higher volume, not all of also because of higher volume, but also the higher value which we have achieved for some of the application which we have been always talking about.

21:18 And this growth momentum, Kapil, do you think we can sustain for next few years? Yes, Sanjesh, we are absolutely positive on this. We feel the kind of traction which we are getting from the segments like EV, semiconductor, data centers and probably green hydrogen will follow soon, we feel that the growth momentum, which we have been advocating will continue for next couple of years. That's helpful. Second, on the refrigerant gas, based on you mentioned in your opening remarks that we are at to reach the peak utilization in '32. Can you help us understand in this quarter what was the utilization rate? And when are we anticipating to hit the peak utilization in the R32?

22:09 And some time line on R134a production will also be helpful. All I can tell you, Sanjay, is that in this quarter, the quarter going on will probably reach the full utilization of what we had planned initially. But having said that, we'll we haven't really stated the capacity yet, but the initial phase of capacity that we had planned in R-thirty two will get fully utilized by the end of this quarter as which is quarter three, okay? Now coming back to 134, I think I mentioned that, that by quarter four of this financial year, we'll commence production. And we are on track on that?

22:57 Yes, we are. One on the battery chemical side for the Rajiv. Now, LIPF6, we have mentioned in our presentation that we have started supplying to the five customer and we are also expanding the capacity. How should we see progression here in LIPF six and probably PVDF, PTFE, which is the first set of revenues we are looking to book from the battery side? How should we see the progress? We expected the second half to be a much stronger. Can you help us understand in the magnitude how big are we looking at in terms of second half being for us? Rajiv is on the call. Can I Rajiv, can I answer this question?

23:49 Yes, yes, sir. Please go ahead. So the way it's happening is that by quarter one next financial year, okay, whatever the capacity and what we had planned and solved, we'll see the impact of that, okay, next two to three quarters. So now you will see the ramp up is happening very rapidly. Because as I've said that it's happening because of two things as the qualification, the order pipeline is very strong for us. And as we are ramping up the capacity of the existing LIP 6 plant, plus we are adding more plants, okay? So I think we'll see the full utilization of this more or less by quarter one next year, quarter one next financial year. So maybe two or three quarters from now, including this quarter.

24:50 We are saying the expanded capacity, we will run full capacity full utilization. Is that the right understanding? That's what it looks like at the moment, yes. And LIPF6 prices in China has significantly now come down in last one month from 150,000 to end to now almost 100,000. Will that have any implication on our pricing formula with the customer? The thing is this has to be looked in context of the lithium price as well. So we need to look at the adder, where the adder is moving, Sanjesh. Okay. So it's all raw material, like deflation Correct. Correct. So if you look at it very closely, it has a lot to do with the lithium because lithium is what LiPS6 is dropping as a result of the lithium pricing fall off. And in most of our cases, it's passed through.

25:44 And so overall, the margin remains protected, Satish. Got it. Got it. One last one from my side. LFP, we have mentioned in the presentation that we are looking to expand capacity significantly. Is the effort on or we will wait for the final approval and then only expand the capacity? How should we see the time line for it? No, we we are already in fact, if you recall last call, I had mentioned that we are planning to set up the large capacity in Oman, which at the moment, we have put in hold. So instead, we are shifting most of those capacities to India. So that we are start I mean, this project is going on at full swing right now. There's no hold.

26:33 We have because we have a very good traction. The current capacity that we have, Sanjay, is very small. This is the capacity, which is essentially to get our hands wet to get to learn. And a lot of it is also to develop grades and products, which we'll send for qualifications. So we are utilizing this capacity as of now for various grade developments. And the significant capacity will come up by towards quarter three of next financial year or towards the end of next year. And we are going forward, we also have quite a few equipments have already reached the site. So we are progressing at full swing.

27:26 That's clear, sir. Thanks for answering all the questions and best of luck for the coming quarter and Happy Diwali for everybody. Thank you. Thank you, Sanjay. Happy Diwali to you as well. Thank you. Thank you. Next question is from the line of Ankur Periwal from Axos Capital. Please go ahead. Yeah. Hi, sir. Good evening. Thanks for the opportunity, and congratulations on a good set of numbers. First question on the CapEx. So we had guided for around, you know, 3,000 plus crore CapEx for this full year, FY twenty seven, largely on the battery side and plus around INR800 crores for the core standalone business. And going by their comments that there could be further expansion in terms of new CapEx getting announced across lower polymers and other segments.

28:14 How should one look at this number, one more from time lines and execution for the existing 3,000 crore CapEx? And going ahead, how should we build that number playing out across the battery and the non battery segments? So let's talk about the nonbattery segment first, okay? We had indicated on this year. By the way, this included the investment in fluoropolymers, okay? Fluoropolymer investments are not a separate investment. It's already part of that, okay? So that INR 800 crores CapEx is progressing well as per the plan, okay? We are almost reaching the zero five point now after this end of this quarter, okay?

29:05 Coming back to battery materials. Battery materials, we had indicated around INR 2,100 crores roughly. Right now, we are slightly behind on that, but that is because we that CapEx was planned looking at that execution of Oman project with certain time line. Unfortunately, because of putting that project on hold and bringing some of that capacities to India, there has been a delay of quarter to quarter and a half. So the plan of 2100 is on, but it will not happen completely in this financial year, okay? So this financial because it will probably go push out, I would say, by one quarter or so.

29:58 But and the project that I mentioned about LFP adding substantial capacity is the same. It's part of the 2,100 that we had. So we are still targeting what we had indicated earlier on battery materials, which is investment of INR 6,000 crores. So it's part of that, and we'll continue to do that. So INR 2,100 crore this year probably will spill over to two quarters. And then obviously, the remaining part of the CapEx out of that pool will go into FY 'twenty eight. Sure. And INR 800 crores on fluoropolymers should be executing within the financial year? INR 800 crores is part of the entire GFL CapEx. Including fluoropolymers.

30:52 And fluoropolymer, in fact, I had said earlier also, in fluoropolymer, we have a significant capacities of monomer available. So now the capacity is being added is through adding polymerization capacity, which is reactors. And that is already on as we speak. Sure, sir. Second bit on the fluoropolymers, wherein we are seeing a good sort of traction across, you mentioned both volume and pricing. So is from a current gross block perspective, what could be the peak revenue now from FLUOROCHEMAR, given the the higher realizations that we are seeing? And secondly, you know, are we seeing any traction in terms of new client additions or new geographies getting added? Where is the demand uptick coming from?

31:46 Ankur, the thing is that it's an ongoing process, okay? We will not wait for the CapEx investment to peak out and then plan because we have already indicated and promised that we will achieve growth of 17% to 20%. So typically, based on as the so our CapEx are planned according to that, okay? We believe that results. And as Kapil indicated, that there's a strong traction from the market. So as we see capacity getting utilized, and as I said earlier that the monomer is already in place, so adding reactors or polymerization capacity is relatively short on, okay, to downstream.

32:35 It's a short cycle, eight months, eight to ten months at the most. So we will keep on adding CapExes and continue to add CapExes in terms of products and trying to optimize the product mix to achieve that 17% to 20% growth. That's, I think, is probably if you have taken a model, you can take that growth and CapExes would follow that. Sure, sir. That's helpful. You and all the best and wishing you all a very happy Diwali. Thank you. Thank you. Wish you a happy Diwali as well. Thanks. Thank you. Thank you. Next question is from the line of Arjun Joshi from. Please go ahead.

33:22 Hi. Very good evening, sir, and thanks to the entire team. Firstly, sir, just touching upon the CapEx once again. If I can see from the presentation, we have planned out for almost 400,000 crores, including the 2,100 crore for this year. I just wanted to get a sense of what all is getting covered in this. We we know for sure that electrolyte salts. There's a small electrolyte capacity and the expansion of LSP. Is there anything beyond this? And will it be fair to assume that by gross impulse attraction, 2,000 odd crores is the balance CapEx left, would that be entirely dedicated towards anode wherein I believe we haven't done much progress on the construction activity, if you can clarify that?

34:15 Yes. No, it will not be entirely on anode because I think sometime last call, we had also mentioned very clearly that we had certain CapExes planned for electrolytes and salts. And India market has been behind in terms of its progress. The battery plant that we announced in India have been behind and a lot of electrolyte and salt catering to that. So will come now, which will probably come in the next financial year going forward, depending upon how the market situation improves, okay? So it's not entirely on anode, okay?

35:02 And so still, there is more investment to come in salt and electrolytes going forward. Got it, sir. When do we expect the start of the anode plant? And any time lines around that? One more point to add, Achit, of course, is that there'll be some CapEx that we had allocated for backward integration as well. And that will come as well once our downstream product capacity is up and stream and utilize some of the CapExes will go into the backward integration. Got it. Sir, if you can address the anode part, which I asked in terms of time lines and when do we expect to begin that project?

35:53 I think anode project is going on very right now, it's slow because we have put some sort of a hold on that looking at because we are putting all our focuses right now on LFP, electrolyte and salt, trying to get these qualifications out of the way. And right now, as I said earlier, that we have a second opportunities available in LFP. So our focus is to get the LFP grade developed and also ramp up the capacity as fast as possible. So I think anode will come subsequent to that. So right now, it's behind the entire set of other products.

36:39 Got it, sir. So just one last question. You have mentioned in the PPT that we expect domestic electrolyte demand to pick up towards the end of next financial year, and I believe we already have a a smaller set of capacity that that we have already constructed. The operationalization timelines for this and and the the the CapEx that we are talking about even for the electrolyte formulations, would that be closer to when we think that demand will pick up? Or if you can guide something on electrolyte's contribution into our p and l, when do we expect that to start in terms of sales?

37:25 See, electrolyte business was particularly meant for domestic market. And if you look at the current battery manufacturing in India, It's quite behind in overall. The overall in terms of gigawatt hours, the battery production is still at very, very low levels, okay? And the way typically what our understanding is based on our interactions with OEMs is that when the battery plants have started in the initial period of stabilization and performance guarantee test runs, these plants are typically run based on the electrolytes, which is supplied from the technology supplier or through one of its directed suppliers.

38:18 Subsequently, once this plant reach some level of stabilization, the localization effort has taken place. So we're looking at the trajectory that we see right now of ramp up, we expect that the localization efforts and the demand for electrolyte in India will start ramping up towards the middle of next year. And you'll see the reflection of that towards the end of the financial year. Now having said that, at this point of time, we have capacities, which we are using to making samples, develop formulations and also using it for qualifications. So at this point of time, we will for next six months or so, we are not do not have any plan of adding more capacities in electrolyte.

39:10 But probably towards the end of next financial year, we'll be required as the market pickups, we'll have to have more capacity being added. Electrolyte is normally a CapEx light as a turnover is very high. And the time line for setting up these plants is much less compared to either LIPF6 or LFPO or anode. So now coming back to your next question that when should we see the revenue from electrolyte coming in, I think we'll probably see that towards the H2 of next financial year. Got it. So it will be Salt, LFP, electrolyte and then anode in terms of revenue recognition time lines.

40:01 That would be a fair understanding. Right? That... That's correct, Rajesh. Absolutely. Got it, sir. Thanks. Thanks for all Yeah. Thanks. You. Next question is from the line of Rohit Madhuraj from three sixty one Capital. Please go ahead. Thanks for the opportunity, and congrats on strong set of numbers. So first question is for the battery chemicals CapEx of INR six thousand crores. How is the funding now looking like in terms of equity fund infusion by external investors by parent and then debt and probably some cash flows from the EV part of the business?

40:51 Yes, Rohit. I'll request Akhil, who's our Group CFO, to take this question. Rui, basically, we have got external investors like IFC who have funded close to INR 400 crores. We have got additional equity round that we did a couple of years back, almost INR 1,000 crores, plus the GFL contribution itself, which was around INR 800 crores. So if I add up all three of them, it was nearly around INR 2,300 crore of equity that was being put into the system as of now. Thus, there is a loan of almost INR100 crores that we have taken from two banks. One is the Sumitomo Bank, the other is ICICI Bank. Sumitomo, have taken INR600 crore.

41:39 ICICI, we have taken another 300 crore. If I add up again INR 2,300 plus INR 900, it makes it almost INR 3,200 crore already raised in the system. This money is enough to sustain us for, I would say, a good part of this calendar year, a little bit more in the next 2027. But having said so, there are adverse discussion going on with many investors of similar repute as IFC, who are looking at this funding because this is a purely green funds and green funding as you would recognize that we are one of the pioneers into the energy transition energy transition zone as a group, not just as a GFL EV, but as a group.

42:29 And to that extent, there are many climate oriented funds also, environmental funds, which are keenly looking to support us in this equity round. My estimation is that we will be able to tie up another INR500 crores to INR700 crores over the next three, four months. But we will do it gradually. I mean, obviously, the plan is to reach INR600 crores, but the entire INR 6,000 will not be funded out of debt or equity, partly it would be through the internal accruals. So my estimation is that we will have around INR 1,500 of loan, we'll have around INR 3,000 crores, INR 3,700 crores of total equity And the balance INR 1,000 crore rod will be through the entire as we will go along. But as I mentioned to you, the equity raise will be gradual.

43:17 After IFC, which is a very, very, I would say, market investors and they have given us a of visibility in terms the corporate governance and ESGs and so many other things. There are similar sovereign funds and similar climate funds that we are targeting. And just to repeat what we have said in earlier call, we have not provided any put or any backstop from parent or promoters for any such funding. So we'll continue to do so as we go along. There are sovereign funds, there are private funds that we are talking and as per the needs of the company, we will not be raising all the money at one go, but gradually over the period of next twelve to eighteen months. That is extremely helpful. Second question is on FY twenty twenty eight revenue scale up from battery chemicals business.

44:10 So in terms of not the absolute number, but a percentage, how much of the revenue is expected from exports of salts, domestic sales of salts and if there is any electrolyte component also from the domestic sales perspective. So just a broader perspective in terms of percentage would be helpful. Yes. I think, as I said earlier, Rohit, is that our currently planned salt capacities will be close to full utilization by quarter one or quarter two around next financial year. So initially, a big part of our revenue, of course, will come from salt.

44:58 LFP large capacity is LFP smaller capacity that we have will, of course, give us certain revenue, but that capacity is small. But the larger capacity of LFP would only get commenced by the towards the quarter three of next financial year. So impact of that, we will only see towards the end of FY 'twenty eight or probably beginning of FY 'twenty nine. So if I have to say in terms of percentage mix, initially, a lot of our revenue will be from LiPS six and, of course, electrolyte because I expect to see electrolyte coming in towards the end of next financial year.

45:43 And right around as once these two get ramped up, the larger capacity of LFP will kick in, okay? So that's the rough, rough, rough sort of time lines of revenue ramp up. So just one clarification, FY 'twenty eight, largely the revenue pie will be from the exports? Or will there be some component from the domestic market as well? There'll be some component from domestic market because I expect towards the middle of next calendar year domestic market to slowly ramp up. But still, it will be driven mostly by export. Sure. Thanks a lot for answering all the questions. All the best and the value wishes to the entire team. Thank you. Thank you, Rohit.

46:30 Same to you. Thank you. Thank you. Next question is from the line of Akash Patel from Akash Securities. Please go ahead. Hello, sir. Good evening. Previously, participants already answered my question. So thank you. No further questions. Thank you. Next question is from the line of Moksha from. Please go ahead. Hello? You're audible, Moksha. Yeah. So, actually, I have two questions. My first set of question is, actually, what is our overall thought process on the backward integration in the electric as well business, especially on the side of iron force. Like, there are now very much specialized players, including in India, which are building in a much larger scale than a captive line inside the cathode plant. So you'd rather buy from them and stay focused on cathode or integrate into the iron phosphate yourself. And also if you integrate, then what cathode volume do you expect?

47:35 And over what time frame would it make sense? Steve, as I said earlier that once our product capacity start getting utilized, we will have the development of the backward integration. So similarly, once we have the large LFP capacities in place, our plan for LFP will commence. So FP, of course, we will get into FP production as well because that's part of our backward integration. So but we will time it according to the LFP sales so that we have the backward integration is ready when the entire LFP sales speak up or the volumes speak up.

48:29 Okay. And my second question is like what percentage of catered costs can be been down if we do backward integration as compared to buying from an Indian supplier? Is that our estimate? I don't think we can give you that because each even the backward integration part to us is a standalone project, which should have its own sort of returns, okay? So I cannot really give you that number. Okay. Sure, sir. No problem. Thank you so much. Thank you. Thank you so much, Moksha. Thank you. Next question is from the line of from MSA Capital Partners. Please go ahead. Hi. Am I audible? Yes.

49:15 Yeah. Thank you so much for the opportunity. Great set of results to the team. Congratulations and season greetings. So I have a two part question connecting to what Akhil sir was highlighting on the sources of funds to a previous participant on battery material business. So if I see, we we... We've invested roughly around 1,800 to 2,000 crores of... 1,800 to 2,000 crores of gross block, creating a gross block. And we have highlighted that we wanna take this to 6,000 crores of gross block. So how should I look at look at the trajectory towards the incremental 4,000 crores in terms of sources of funds and in terms of timeline?

50:01 And so the second part of this... The same question would be that now that we've decided to shift project to India, can we see that there could be some bit of an upside in terms of asset terms that we had guided for 2x and 25% EBITDA margin that we had guided on this business? So, Aditya, we are still holding on to our earlier guidance, which is 2x and 25. Now coming back to the funding part, we have INR 2,100 crores we had planned this year, and Akhil had given complete breakup in terms of where this funding is going to come from.

50:53 Because roughly at this point of time, I would say roughly maybe INR 3,600 crores is out of that INR 6,000 is remaining. And Akhil had already given an indication for the sources of fund with the visibility of next six quarters or so, five to six quarters. I mean, there anything specific that you're looking for beyond what... No. I'm looking at the FY 'twenty six balance sheet. We've invested roughly around 2,000 crores. We have 600 crores of debt, $606,140 crores of debt. 640 crores has gone to 900 odd crores of debt, which you've gotten from and ICICI.

51:38 So I am still trying to get a handle on how do we go from this 2,000 crores of gross profit that is funded for towards 6,000, which I think that's 100 crores of capital we've invested for, so INR300 crores. Where does that INR300 So that is what I'm trying to understand because the current gradually, so INR200 that you're seeing as on FY '27... '26 will become close to 4,000 as on FY 'twenty seven by the end of this financial year. And it will become, say, around 6,000 crore by, say, FY 'twenty eight. I'm just making things easier for you to understand. And as I mentioned to you, overall plan is to fund INR 6,000 minus INR 1,000 crores from the entire accrual, it's INR 5,000 Out of INR 5,000 crores, our plan is to raise around INR 3,500 crores of equity, of which we already raised INR 2,000 to INR five-zero.

52:35 So we already have INR 800 from GFL, 1,000 from investors, $4.50 from IFC. So close to INR 2,300 crore we already raised, another INR 1,200 crore need to be raised over the next eighteen to twenty four months. And the debt will be around INR 1,500 crores, of which INR 900 is already raised. So that is a broad INR 6,000 investment plan. Understood. Understood. Makes sense. You have any further question, I'm happy to receive a separate call from you and explain to you each and everything. You can call me. Yes, that is what I'll Multiple questions, I'll do that. Thank you so much for answering that. Thank you. Yes. Thanks, Aditya. Thank you.

53:22 Thank you. Next question is from the line of Hansal Thakkar from Lalkar Securities. Please go ahead. Festive greetings, and congratulations on a lovely set of numbers. I think you set the fireworks for Diwali. So two questions from me. First question is on the LIPF six. So you mentioned multiple year order visibility for LIPF6. Could you indicate how much of this is under volume binding long term contracts? And how much is spot purchase? See, lot of it is actually is when I say volume mining, these are volume mining with a price formula based pricing, okay?

54:08 And typically, very little is is spot because a lot of it is ongoing customers who have indicated their projected volumes. And we have we are qualified there. So there is a formula in terms of based on the lithium, what the price should be. And this is how it is mapped out. Rajiv, you want to add anything Yes. To So that long term capacity is pretty much bound with these clients? Yes. Rajeet, please. Yes. So generally, we have either annual contracts or longer than that. So our volume is therefore bound for the at least for the next financial year with our customer and for some of them it is even longer.

55:09 That's encouraging to know. Sir, the second question was on the electrolyte. So on the domestic business, I'd just like to know how many cell maker programs have reached the line validation stage And whether they're EV or DESS or both? They are both. Currently, we are engaged with the three of them have been at a production level in India. And we are engaged with all three of them. And this is a sample where we have sent it to them, and they are at the early stage of evaluation. Okay. So at this point of time, my understanding is there are only three battery manufacturers operating at certain capacities.

56:03 Got it, sir. Great, great. All right, sir. That's all from my side and congratulations again. Thank you. Thank you so much, Anshul. Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference back to management for closing comments. Yes. Thank you very much. And as we have indicated this in this call, we continue to move on in the growth journey with a positive bias on the margins. The Advanced Battery Materials segment is a long term strategic initiative with large CapEx committed. We believe this segment will lead substantial value in the long run.

56:53 While the segment beholds huge opportunity, the long approval cycles and gestation period is a critical entry barrier. We have successfully crossed all the hurdles and are on the cusp of a major growth journey ahead. The nature of the business is such that one has to commit a large CapEx in commercial plants before start of revenue. Fortunately or unfortunately, our revenues are tied up to the end product ramp up where we have seen some delays. However, we are most excited about the opportunities from this segment, while our other segments continue to do exceedingly well.

57:40 With this, we would like to thank you all for interest in Gujarat Fluorochemicals, and we would like to wish you all a very, very happy Diwali. Thank you. Thank you very much. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines. Thank you.