Stallion India Fluorochemicals Limited — Call Transcript 2025

May 22, 2025

Stallion India Fluorochemicals Ltd.

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GIN - L51410MH2002PLC137076 2, A-Wing, Knox Plaza, Off Link Road, Mindspace, Malad (W), Mumbai - 400 064. Tel.: 022-4351 0000 Email: sf@stallion.in

Date: 22[nd ] May, 2025

To, National Stock Exchange of India Limited (“NSE”), The Listing Department Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex Bandra (East), Mumbai – 400 051.

To, BSE Limited (“BSE”), Corporate Relationship Department, 2nd Floor, New Trading Ring, P.J. Towers, Dalal Street, Mumbai – 400 001.

NSE Symbol: STALLION ISIN: INE0RYC01010

BSE Scrip Code: 544342 ISIN: INE0RYC01010

Sub : Intimation under Regulation 30 of the SEBI (Listing Obligations and – Disclosure Requirements) Regulations, 2015 Transcript of the Investor Conference

Dear Sir/Ma’am,

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the transcript of the Investor Conference held on Tuesday, 20[th] May 2025, at 04.00 p.m. IST with regard to the business and financial performance of the Company for the quarter and financial year ended 31st March 2025.

The transcript has also been uploaded on the Company’s website and can be accessed through the following link:

• • https://stallionfluorochemicals.com/investors information/earning call/

You are requested to kindly note the same and acknowledge receipt.

Yours Faithfully,

For Stallion India Fluorochemicals Limited (Formerly known as Stallion India Fluorochemicals Private Limited)

GOVIND Digitally signed by GOVIND RAO RAO Date: 2025.05.22 18:10:19 +05'30' Govind Rao Company Secretary & Compliance Officer

Khalapur Plant - Survey No. 11 & Hissa No.9/10/1, Village lohop, Taluka- Khalapur, Dist. Raigad, Maharashtra -410 207

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Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

Event Date / Time: 20/05/2025, 16:00 Hrs. Event Duration: 01 hr. 20 mins 20 secs

CORPORATE PARTICIPANTS:

Mr. Shazad Sheriar RustomJi Managing Director & Chief Executive Officer

Mrs. Geetu Yadav Director

Mr. Parth Raorane Confideleap Partners

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Moderator

Ladies and gentlemen, good day and welcome to Stallion India Fluorochemicals Limited Q4 FY '25 Results Conference Call hosted by Ventura Securities Limited. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing * and then 0 on your touchtone phone. Please note that this conference is being recorded.

Before we begin, I would like to point out that this conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. I would now like to hand over the floor to Mr. Parth from ConfideLeap Partners. Thank you and over to you, sir.

Parth Raorane

Yes. Thank you and good day to you ladies and gentlemen. This is Parth from Confideleap Partners. So we represent the Investor Relations for Stallion India Fluorochemicals Limited. On behalf of Ventura Securities and ConfideLeap Partners, I warmly welcome you all to the Stallion India Fluorochemicals Limited results call for the Q4 and FY '25 earnings conference call.

The company is represented by Mr. Shazad Sheriar Rustom Ji, he is the Managing Director & CEO, and Mrs. Geetu Yadav, who is the Director at Stallion India Fluorochemicals Limited.

I would now like to hand over the call to Mr. Shazad Sheriar RustomJi for his opening remarks. Thank you and over to you, Shazad Ji.

Shazad Sheriar RustomJi

Hello?

Parth Raorane

Your voice is cracking, ShazadJi.

Moderator

Sir, please go ahead, sir. You're audible. Dear participants kindly stay connected.

Shazad Sheriar RustomJi

Hello...?

Moderator

Yes, sir you are audible now, please go ahead.

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Shazad Sheriar RustomJi

Yes. Sorry for the bad signal. I would like to extend a very warm welcome to all of you joining us on our Q4 and FY '25 earnings conference call. We are pleased to close financial year FY '25 on a strong note, underscoring a successful execution of our strategic initiatives and increasing importance of our integrated solutions within the fluorochemical industry.

For Q4 FY '25, we recorded total revenues of INR 153.16 crore, registering a robust 79.87% QoQ growth, supported by sustained demand across our end user industries. Our EBITDA rose 41.75% QoQ to INR 20.31 crores and PAT came in at INR 13.27 crores, which is up 35.56% quarter-on-quarter.

On a full year basis, we crossed a significant milestone by delivering INR 379.47 crores in total revenues, EBITDA at INR 49.74 crores and PAT at INR 32.33 crores. This is excluding a onetime provision of INR 10.71 crores, which we had made in H1. Other than this, our underlying PAT would have been INR 43.04 crore, reflecting the true strength of our operating performance. Strategically, FY '25 marked the beginning of a new chapter for Stallion, as we accelerated our forward integration efforts.

The successful execution of projects at the Khalapur and Ghilot facilities as well as the groundwork for the upcoming Mambattu and Specialty Gas Unit sets the stage for the next phase of growth in the high margin segments such as semiconductor gases, HFOs and liquid helium.

At Khalapur, we are developing capabilities for semiconductor and specialty gas debulking and blending, while the Mambattu facility is poised to become a key production center for HFO based refrigerants, aligning with global environmental mandates and India's strategic push for indigenous electronics and semiconductor manufacturing.

These expansions will enable us to participate more deeply in the electronic solar and fiber optic ecosystems, which are expected to grow at high double digit CAGRS. Furthermore, we continue to maintain a strong focus on safety, sustainability and customer centric innovation. Our ability to customize gas blends tailored to the needs of over 200 customers across 15 plus sectors, including automotive, pharma, fire, defense and power, differentiates us in a commoditized industry.

We believe that our strategic investments in infrastructure and product development, backed by our 30 plus years of technical know-how, position us to capture an expected CAGR of 30%, 35% over the next three years, while enhancing profitability by 3% to 4% through margin accretive offerings.

Looking ahead to FY 2026 and beyond, we are confident in our roadmap to become fully integrated fluorochemicals company with a strong emphasis on backward integration, innovation and operational scalability. With a well-established Pan India network, deep industrial linkages and a growing presence in next generation industrial gases, we are committed to creating sustainable long-term value for all stakeholders.

Before we open the door for questions, I would like to thank the entire Stallion team for their hard work and commitment and our investors and partners for their unwavering support. With that, I conclude my opening remarks and invite your questions. Thank you.

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Questions & Answers

Moderator

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question please press * and 1 on your telephone keypad. And wait for your name to be announced. If you would like to withdraw your request, you may do so by pressing * and 1 again.

The first question comes from Sanket Sadh from Aarth AIF. Please go ahead.

Sanket Sadh

I think, firstly, congratulations on a good set of numbers. I have a few questions. So how many competitors are there in India doing similar activities as you?

Shazad Sheriar RustomJi

Basically, we are Stallion is across multi fields. It's not single. Like in the restaurant side of the business, you have companies like SRF, Navin, et cetera, who are competitors. These are the big names. Smaller names, there would be at least much, meaning much smaller than us and in the trade segment more than in the manufacturing segment. There would be at least another 10. Then in the industrial setup, that is in the specialty gas side, not exactly special, one is in the Specialty Gas side, there would be about seven. In the Industrial segment, there would be another about 7 to 10. In the Fire side, there would be at least 10 to 12. So, we are not in one particular segment. We are ranging across a huge number of segments. As such, that gives us a different strength, which others do not have.

Sanket Sadh

All right. But our company will mostly into....

Shazad Sheriar RustomJi

It's quite difficult to find another company that fits in with Stallion across all the segments.

Sanket Sadh

Right, thank you. And what will be the key reasons for the guidance of 30% to 35% staggered growth in the next 3 years?

Shazad Sheriar RustomJi

Basically, if you have seen, it's for the investors, it has been a very good studying option. Stallion, basically, we entered into the IPO mode in 2023. We had expected that in when we first filed our DRH 2024, we had expected that we would have been through by March. However, due to SEBI requiring us to have land purchased earlier, we had to withdraw and again file back. So we got set off by one year.

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Now the good thing for the investors, all the investors is you were able to study us over two years, which is normally not the case in most IPOs. In most IPOs, you look at the company three months, they've come in, you've done all your showcasing, et cetera, and the IPO is true and that's it. Here, we have been over '23-'24, '24-'25. So you've got two financial years results where you have seen YoY growth happening. So, basically, firstly, it starts with the basic thing. Forget the expansion. Even as a normal company, we had geared up post COVID when everything had come crashing down.

We had, meaning we had geared up that we would be on a growth mode and we would expand at least by 20%, 25% minimum. Now post IPO, we've got the funding, we've got the plans forward for setting up the specialty gas unit, we've got the plans forward for the HFO unit and the Southern facility, which gives us a different reach. Together with these, we believe that 30% to 35% YoY should be a very reasonable growth target that we have kept for ourselves. And seeing our past performance, I think you can believe that we would be able to more or less meet whatever targets we are setting.

Sanket Sadh

Right. And can you please comment on the CapEx for our semiconductor gas and specialty gas facility? I can see that there's not much of the IPO proceeds which are utilized as of yet. And can you also comment on the capacity utilization, which your facilities have currently? Because as per the RHB, I saw that the Manasaura and the Panvel facility utilization were decreasing every year.

Shazad Sheriar RustomJi

Okay. Basically, your questions let me break up your question into three parts. One, first is the question on CapEx utilization for the current IPO proceeds, number one. Number two question is, what why is the capacities not utilized -- meaning, what are the capacities and why are they not utilized? And third, why are the capacities declining utilization declining in certain facilities? So I'll that should give clarity to your question. So I'll answer it in sequence.

The CapEx, basically, we received the funds somewhere in February end, meaning Jan end, we got listed. By the time we started finishing formalities and finishing everything, we almost reached February end. We were in middle of our best quarter. And very honestly, we did not want to waste time or the quarter because up to March is our strongest quarter. So we did not want to waste time in, number one, in the CapEx spending and neglecting an opportunity that is there because the sales are not going to wait for us. So basically, March, we were concentrating more on closing the year with good, growth, number one.

Number two, the redesigning of the both the facilities have taken some more time than what was expected. In the sense, the Mambattu facility was designed for five tanks as a five-tank facility. We have scaled it up to a 10-tank facility. The helium plant also, the specialty gas plant also, initial designs were different. Then, now basically, as you come into the current year and as you see the opportunities coming in front, so you will reengineer and rechange the design to suit what would now appear to be a better sort of plant utilization than what was earlier planned for.

So in both cases, we are scaling up slightly. In Mambattu, we are scaling up 100%. Reason for scaling up is in these plants, especially in the Mambattu plant, which would also be a flammable gas plant, technically. So all the gases are flammable. So what happens is if you set

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up five tanks and now, we want to go in for expansion of say one more tank or two more tanks or additional some facility, you have to take a complete shutdown.

So once we are started on a growth projection and towards the growth drive, we don't want to come to a stage where now we want to expand and we need to take a shutdown for three months for expanding the capacities. So it was decided that it might not be entirely a bad call to complete the maximum utilization of whatever we have there and in one stage complete all the capacity that we want to enhance.

So we've gone in for 100% utilization of total land, 100% utilization of whatever is possible, doubling the capacity, et cetera, and finishing it once and for all. So that in the designing side took a month more, number one, because you have to change the entire RFIDs, you have to change the piping diagrams, then you have to fit in with the space restrictions, the safety distances, et cetera. So it's quite a task. So all that was completed by April end. And now we have started giving out all the orders for all the raw materials, all the plant and machinery, all the work.

Overall, we will not lose time because the end what we have, 30th October is what we are looking at completion. We would be on track to meet our completion date. Internally, the little time line has moved up and down, but ultimate time line will remain the same. There won't be any changes.

And coming to your third part about capacity utilization and why reductions are there. Now capacities, you have to understand the capacities that have been mentioned is basically during the IPO, the merchant bankers and we, et cetera, they asked they needed they wanted a third party-chartered engineer to come you know, evaluate and arrive at the capacities. So the way of evaluating is, slightly different than realistic in the sense it's more a paper working of capacity where, like, suppose you have a tank, you have, you know, the downloading, equipment, et cetera, your capacity to unload and, repack is so much. Your capacity to blend is so much.

So what they do is they note all that down and then they multiply by the number of tanks or setup you have, which is little unrealistic because what it does is, it does not take into effect that you cannot run all simultaneously. So you cannot actually multiply in the manner that it was done. So the capacity is a little shown out. So it is shown as poor capacity utilization, which is not the case.

Second, you have to understand that Indian market is now divided into North, West, South. East is pretty much dead zone, meaning in percentage terms, it's like one-fourth of any of these other zones. Like, it realistically, it would be 30, 30, 30, and 10, 4 East. So or 40, 25, 35, and 10,4 East like that. So you have the manufacturing hub that used to be the NCR Belt. Now if you're predominantly dealing in OEM business, then you will stick to this belt. You will have more capacity utilizations here. If you shift your focus to HFOs and other products and aftermarket, then you will move more towards the West and South.

So basically, it's been our move towards operating ideology that currently HFCs, especially what the OEMs are currently using in the NCR Belt. It is oversaturated, number one. Number two, better returns come from the aftermarket and from the new products that are more coming up. Now you've got another region where we have a Mambattu facility, CCD. So all the major industries like, LG, BlueStar, Voltas, Daikin, Umbar, most of the large manufacturing

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have set up one big unit in that facility area. So basically, all the new products, et cetera, anything that they will have, lot of the export business happens from there.

So you would find that lot of the new products more the growth is more in the South and the old products growth is in the North number one. So it's a move towards the shift of products and market that we're looking at. Also, aftermarket, you have to understand is 80% of the total market share and 20% remains with OEM. So he who controls the aftermarket controls the market. It's a larger share percentage. So, it's basically moving the volumes.

Sanket Sadh

Got it. And there is a significant dependence on China for...

Moderator

Hello. Sir, can you join back the queue, please?

Sanket Sadh

Okay. Alright.

Moderator

Thank you, sir. The next question comes from Prabal Jain from SM Holdings. Please go ahead.

Prabal Jain

Sir, my first question was regarding that contingent liability which you have. You mentioned that the part payment has been done, and the deadline was 30th, April. And, there was a one extension clause, which would extend to 30th May. So, I mean, you will be doing the next part payment by 30th, May. Right?

Shazad Sheriar RustomJi

No. Firstly, can I just brief so that everyone else also understands? This contingent liability, basically, in our RSP, we had mentioned that we had a dispute with a Chinese company called Sunmai. The dispute was based on, number one, them arbitrarily changing the terms of the contract resulting in a loss of $500,000, $0.5 million and not meeting the full contract where they did not supply. We had booked -- we had booked for 200 containers, and they supplied only 100 containers because the price jumped from $2 to $7. So we had a result in $7 million notional loss.

So our dispute was based on that, and we could not go into arbitration, because arbitration place was China. This was during COVID period. China was shut down. You could not go there; they could not come here.

Nothing could happen. Thereafter, the time frame moved out, and basically, it just went into limbo. This so finally, after the IPO has happened, now technically, we do not need to settle also because now it's four years past. This year, next year, what we could simply do is now after four years, just write off the operating, this after giving notice, et cetera. But what we decided is now that we are a listed company, now we have got stakeholders, et cetera, it

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would make a lot more sense rather than have any such dispute, anything lingering on, to settle all all such disputes amicably, such that you have a better reputation and better market access even in China or wherever.

So what we did was we negotiated with them. They were claiming, much higher. They wanted about $800,000 of damages. We were claiming something else. Finally, we settled it. What was the net pending amount shown? We closed it at that. No interest. No damages. No legal fees, nothing. Everything we close at that and amicably, everything gets settled. So on that basis, we settled it. We took that in the provisions.

In H1, we have taken it into provisions already, and there's no impact on the balance sheet to that. And we paid out about $250,000 before 31st, March. And the timeline given is not so much delay or monetary thing. You have to understand that there's a operational problem in making payments because my purchase order says $50,000, his invoice has come for $60,000 or $100,000 So the bank says there's a mismatch in documents that you have what the contract states and what you are, asking us to pay don't match up.

So we are having operational issues with the bank in closing all the payments pending. And this is what our dispute was originally about that we placed order 50, at the contract says 50 and you've charged me 100. So that was the basic issue of the dispute, as of right now, we posted on BSE and SE because yesterday. As of right now, we have paid off everything except $32,000, and the $32,000 is spending only because the documents are so mismatched. The bank says you need RBI here, which we cannot issue the statement. So now we'll apply and get it for that last 32,000. But we wrote to Sunmai, they understand and they accept that in principle, everything is closed and settled and this also will be done.

So as of today, when we're talking, we have paid off everything except $33,800 sorry, not $33,800 is all that remains pending. Out of $1.4 yes.

Prabal Jain

Yes. No issues, sir. Sir, in Q4, you did $150 gross odd. At this 150, like what is the capacity utilization that you are at with existing infrastructure?

Shazad Sheriar RustomJi

It's more than 50 everywhere.

Prabal Jain

More than 50%. And so the new two facilities, one of the semiconductor and specialty and one expansion of the existing product lines, what is the peak revenue can we target from these two new facilities once they come in after like I think you mentioned 30th, October 2025?

Shazad Sheriar RustomJi

Yes. See, basically, what is that facility coming up for? Currently, we have four facilities already. Now the four facilities are in North and West. We don't have anything in the South. So if you have a facility in the South, firstly, that market becomes very much more accessible and cheaper for you to operate. We become fully forward integrated, meaning we are just in time with all our customers. Meaning my plant would be like about 10 minutes away from the

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BlueStar plant or the Daikin plant or the Voltas plant. So first thing is in mode of supply. Second, the lucrative South market, which is the Chennai, Bangalore and Kochi belt. We are very much like three, four hours away from each of them. So what happens is the proximity to market gives you additional business, which currently is not being enjoyed by us, number one.

Number two, more important is, this facility is not like the other four facilities because it's going to be designed only for HFO and HFO blending. All the next generation, as the quota starts kicking in and as all companies after, say, 2027, all the companies will start switching over to new products, '26, '27. They will start moving to HFO. So you already have the facility in place. You already have the blending in place. You already have everything available ready. You don't have to set up anything. So first, mover advantage comes about.

Secondly, even for when you apply for licenses, import permits, etcetera, BDFT and, MOEF want to see, do you have a facility? Do you have a PESO approved facility?

Do you have the factory? Do you have the blending capability? So without that, they don't give you any import permits also. So, this facility would provide you a new reach into a new product that are going to be coming. HFO currently don't have that much reach or scale of volume. But now from next year, it is expected to grow phenomenally. So, this gives us opening to the new businesses that are going to start now.

Moderator

Thank you, sir. The next question comes from Jayaraj Jain from HNI And Group. Please go ahead.

Jayaraj Jain

So my first question is like given the company has made recent improvement in gross margin, how sustainable at this level considering potential fluctuation in raw material for us to know?

Shazad Sheriar RustomJi

See, we're taking a couple of investor calls in around January, I think. Okay. In that January, February, that period, lot of the investors had asked, like, you know the spike that came about in all the shares of the fluorochemical company, like I said, that's Naveen that the prices have gone up, everything has gone up. So everyone was asking us, how does it look for us? And I just told I just told everyone one simple thing. It's a very good time for us also. We are same as them. What benefits they will reap, we will reap. So to answer you in a correct manner, this is a cyclical upturn, and we have been, how to say, very agile to be able to get the benefits of the cyclical upturn. Similarly, you will have in all industry cycles, you have upturn, up cycle, and you have a down cycle.

So currently, when it's on the up, everyone will have excellent results. In our past record, even in the down cycles, we don't usually have anything. We managed to come out very well even in the down cycles because being across so many industry groups allows us one side one industry group has a down cycle; another has a up cycle. Secondly, getting into the specialty gases, semiconductor gases, et cetera, and HFOs. HFOs don't have a down cycle because they are new industry that is starting.

So it's like a sunrise industry which will only keep rising till it reaches, you know, 12 noon, then it'll start setting. So for the next 10 years, 7 years, it's only going to rise. Then products like

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helium, argon, all the semiconductor products, NFC, et cetera, those only not only have a very stable setting in normal times, they have a very strong cyclical movement also like other products, wherein you get excellent buffering. Suppose if our products, our fluorochemical products have a down cycle, these products will have an up cycle usually.

So basically, being a company that is expanding into various industry mode groupings, it allows us to deflect the usual down cycle syndrome. So we hope to have it pretty much sustainable, maybe the high margins currently seen, it may not in this particular industry segment may not hold, but the other industry segment will offset it. So we can -- we think that it should be pretty much sustainable.

Jayaraj Jain

Okay, thank you. And another question is, can you elaborate your performance between online sales and offline sales channels? And which channel is currently giving you much growth as compared to others?

Shazad Sheriar RustomJi

Sorry, can you repeat online scale and offline meaning?

Jayaraj Jain

Hello? Can you hear me?

Shazad Sheriar RustomJi

Yeah. I didn't understand the question.

Jayaraj Jain

I'm asking about your performance difference between your online and offline sales.

Shazad Sheriar RustomJi

Online and offline sales? Yes. I still didn't understand. What is online? What is offline?

Jayaraj Jain

Online sales. Sorry. Sorry, my bad. So my next question is like are there any plans to prioritize your investment and for the growth as I have seen that you're going for two more new manufacturing facilities, one in Maharashtra and one in Andhra Pradesh?

Shazad Sheriar RustomJi

Yes. Now a complete focus is going to be the CapEx -- proper CapEx spend and also setting up both these facilities in time, because if we meet the time line, then our growth plans as we have kept and as we are announcing, it should be sustainable. More than the current CapEx also, we are enhancing whatever CapEx we had raised money for, and we are increasing where we feel that the capacities we should enhance currently or have better facilities than what we had originally planned for. One is that.

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Second, the company also has a very ambitious growth to go into backward integration. So side by side along with these two facilities, these two facilities would give us a different reach, would give us a different industry segment.

But in the core segment also, we would like to go in for backward integration where we go into manufacture of at least one or two of the molecules. So focus is there also and we are working on that also.

Jayaraj Jain

Okay, sir. And sir, my last question is like if after starting of these facilities, like your new facility one in Andhra Pradesh and another in Maharashtra, how much manufacturing demand will be increased and it will reflect on your revenue?

Shazad Sheriar RustomJi

We have given the expectation; the growth should be 30% YoY.

Jayaraj Jain

Okay. 30% YoY. Okay. And is there any scope of growth for your semiconductor? As you can see, government is giving you much more initiative and incentives for the same. So does the company get any benefit from it?

Shazad Sheriar RustomJi

No. See, the government is giving incentive for the direct manufacture of semiconductor products or products that go directly into it, like say chips or something. And that also in specified areas, they are not giving for every product that goes into it.

Now the gases that will go as part of the manufacturing process, et cetera, Currently, it does not have. Secondly, we are not in the areas where they, you know, where they notify and say that, okay, you'll get if you set up here. Second, you have to understand why we have kept 30%. First thing is we don't want to either over project or try to do a big show sign and say this industry is growing at 100% YoY. We will also grow 100%. We want to give you; we expect to be having this discussion next year also with you. And we hope you will be our investor even next year. So next year, when you turn and ask me that you had quoted 30 and you have done 35%, we have credibility. But if I say 100% and it comes out 30%, we lose credibility. So we are giving figures what we hope to achieve and what we hope to discuss on that we did better than what we had mentioned to you.

We don't want to give wrong figures or very optimistic figures where we are not confident of achieving. We are giving figures that we are confident we will achieve and we may surpass also.

Jayaraj Jain

Okay, sir. Thank you. So just one last question. Like, I have seen your growth is lower....

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Moderator

Mr. Jayraj, can you join back the queue, sir?

Jayaraj Jain

Okay. Sure.

Moderator

Thank you, sir. I request the participants to restitute with three questions in the initial round and join back the queue for more questions. The next question comes from Ajit Sethi from Eiko Quantum Solutions. Please go ahead.

Ajit Sethi

Yes. What is the CapEx amount we have spent for the upcoming two manufacturing facility?

Shazad Sheriar RustomJi

As of right now and what is the asset sorry -- as of right now, we have not spent any CapEx. As of 31st, March, we had shown a spend of approximately, I think, INR 69 lakhs only versus INR 51 crores of CapEx spend approximate INR 51 crores of CapEx spend. I explained why we did not concentrate on the CapEx spend because we received the money sometime by Feb end. March was a very high growth, high sale period. So everyone was concentrating there. Plus, we went in for enhancing the scale of operations. So both the plants needed redesigning.

So redesigning, which started in 15th, March as per the scheduled date, and should have got over by 30th, March, did not get over it. It took till April to complete the redesigning. And in May now we have started the procurement.

Ajit Sethi

So with the optimum capacity utilization of both the plants, so what kind of revenue we can achieve from that plant?

Shazad Sheriar RustomJi

Again, like I said, we have already given the growth figures at 30%, 35% YoY for the next three years. The HFO, you have to understand one thing, the semiconductor business, many big companies also looked and wanted to get into it, till they realized the high gestation period. There's an approval process. Each product will take two to three years to get approved. Once it's approved, it's like an entry barrier. Nobody else can enter. Meaning, if I'm supplying, I'm just giving example, I'm approved and I'm supplying Tata Semiconductor. Now it's approved by the foreign partner. It's approved by the local unit. It's approved. The consistency, quality, et cetera, is approved. I have my price. I'm just giving a ballpark sort of to understand.

I'm charging INR 1000 rupees. A newcomer comes and says, I'll supply this at 500. Nobody will even accept the code. You have to go through the qualification process, which itself becomes an easy barrier. So once you are entrenched in it, you are very secured and the business is

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

very strong, stable and higher, very much higher margins and returns than what you have currently. But it is not something that will come overnight. The HFO business also as the industry, as the companies all start moving over from HFCs to HFO, it's a gradual shift, fast but gradual shift and hence you will see that 30%, 35% growth YoY.

Ajit Sethi

Okay. My last question is what is the current domestic demand for refrigerant gases and what is the industry capacity?

Shazad Sheriar RustomJi

Let me put it this way, the approximate demand. Now I will speak in terms of one product only because the local manufacturers, manufacture. See, there are about a total of 40 products. 40 products that Stallion is in. The peer group, that is Naveen, SRF, they're into five products. They manufacture two. So I will speak on the two because that you can speak only on that when you're asking manufacturing capacity. So manufacturing like 32, the Indian demand should be approximately about 15,000 tons. We understand Naveen's capacity should be 10,000 tons, SRF should be about 16,000 tons. Naveen's 10 should be about 8,000, 8,000 and 16,000.

So that should be about 24,000 tons. There is two new capacities that are coming up. There's a company called Chemclast, who would be coming up with a 3,000 tons facility, TanFax Group. They should be coming up with a 10,000 tons capacity, but initially, they'll start production with a 3,000 tons capacity. So the capacities in the country should be about 30,000 tons for sales of 15,000 tons. But you have to understand that majority of this will get exported out, because the export market pays at least 25% higher than the local market currently. And the global capacity for the same product is over 250,000 tons. So India is still like 10% of whatever global capacity is.

Moderator

Thank you. The next question comes from Manish Bhadane from PNK Securities. Please go ahead.

Manish Bhadane

As you mentioned in your opening commentary that you're expecting a CAGR of 35% for the next 3 years. And you also like explained it one to two times. But can it be clearer like how you will actually be 35% CAGR over the next three years? Like what is your strategy? Like are you going to launch any new product or anything like that? Thank you.

Shazad Sheriar RustomJi

Yes. See the new facility that will come like the helium, all the new products that will come out like argent helium, your, NFC, et cetera, all the semiconductor products that would be there, very easily would add on at least INR 100 crores of revenue. Your Mambattu facility for the HFOs would add on another INR 100 crores towards revenues. So basically, these will keep on scaling up and growing up.

Moderator

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Thank you. The next question comes from Bhavika Singhvi from Niveshaay. Please go ahead.

Bhavika Singhvi

My question is that, as in RHB, it's mentioned that most of your raw material is imported mainly from China. How does tailwind handle price fluctuation? Like do, the cost is transferred to customers or it's get absorbed? So could you?

Shazad Sheriar RustomJi

The reason your question has like sub questions in it, meaning why are we getting most of the material from China, number one, in that sort of asking. And second is, how do we manage the fluctuation? Now basically, you heard about how the Chinese manufacturing took over lot of the global industry, like in rare materials, rare earths, they've almost got 100% of the business share.

Now in fluorochemicals, China has 85% of global share. It is not out of choice. There's nobody in America who makes this. There's nobody in Europe who makes this. There's nobody in any other part of the world who's baking in Japan, et cetera, who's making this.

So if you want to deal in this, you have to go to China. Now it's changing. The government in India has realized they've woken up. They're giving incentives. They're asking people set up. Now you have to understand why is it that everything moved to China. Cost of electricity, like industrial electricity in India would cost something like about INR 9 to INR 11 rupees. In China, it's INR 4.5 to INR 5. The cost of raw material, we did nobody goes about mining, opening up mines and opening up, like, you know, or having strategic partnerships like how China goes to Africa and then takes over the mining of a complete area. The government in most countries don't do that.

So as a result, most of the raw material for manufacturing the fluorochemicals also is controlled by China. So today, if, like, SRS is there, Naveen is there. Okay. We feel that we have manufacturing in India. They still have to go back to China to buy the fluoro, whatever again have to go back to the same guy. So what China does is they increase the cost of raw material when they find that there is a safeguard duty. Like, suppose if on R32, the antidumping duty is there, they'll raise all the raw material cost that goes into manufacturing it.

So for the short run, it is inevitable that most companies in certain fields will have to depend and work with China, number one. Number two, how do you manage the fluctuation? In our product, fluctuations are over 100%, meaning it's about 300% increase is not unheard of. We have seen three cycles where the 300% increase is. So basically, the fluctuation in 4x, the fluctuation in material cost and now the biggest problem will be the quota. What you saw on 1st, January, why the shares pricing went up for SRF Naveen was that suddenly the prices jumped up by 25%. So when there's a 15% quota cut, the price of material will go up because ultimately you can sell less. So you have to divide the cost over the remaining product.

So how do we manage it? A lot of times the questions have been raised, why do we have such high inventory level? So the inventory level is what allows us to offset the fluctuations. Being 30 years into the field, Stallion has never faced a time where we have failed in supply or in commitments. Everyone else, every single company, multinational or Indian, including Clear Group, not one company can give this statement that they have not failed in supply multiple times. And Stallion is the only company you can meaning if you have reached in the market,

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

you can ask not a single time in 30 years we feel the commitment. And the reason is understanding the market, understanding the dynamics, knowing what is going to move pricing, what is going to move availability, knowing what is the seasonal challenges, et cetera.

Meaning, when I say seasonal challenges, I don't mean hot and cold. I mean, you've got the storm season in the South China Sea. You've got regional tension somewhere. So already planning in advance that, okay, if something goes wrong, what's plan B? So usually, it all boils down to having higher inventory levels at the correct pricing. So you have your raw materials stocked up. So that allows you to offset any short-term fluctuations.

Bhavika Singhvi

Yes, sir. So, my next question is that as your revenue comes mostly from domestic, so is there any plan to go like in export side? You are planning something or it's just like domestically there are like you have a lot of supply to cater?

Shazad Sheriar RustomJi

No, it's, we definitely have plans for export and also enhancing our footprint across other countries, meaning we have plans for Middle East, we have plans Middle East is more for accessing African sales. Africa is a major sale point, but money is very unsecure. Dealing is very unsecure in Africa. So usually, you look at stepping points like Middle East from where you control the sales to Africa and other Middle Eastern countries, not necessarily Dubai or sales in Dubai. You're looking you're setting up in Dubai, but you're looking at sales elsewhere then also Sri Lanka.

Now, reason is also shipping is one of the biggest customers for from everything from firefighting, insulation, refrigerants, et cetera. So when you have, like, India, Sri Lanka, Dubai, you basically you can manage almost, like, one-third of shipping moving from this area, which is a very huge market. Unitor is a multibillion-dollar company just built on catering to shipping. So we have plans. But currently in this year, possibly in the half of next year, we will not make any move towards it because we having just gone through the IPO, first, we have our CapEx responsibilities complete.

Then we are looking at stabilization here, also backward integration opportunity that is currently there. So we're looking at that also. So we would conclude all our plans here before we move out.

Moderator

Thank you. The next question comes from Gurbaksh from HNI And Group. Please go ahead. I repeat question comes from Gurbaksh. Please go ahead. There is no response.

We have a follow-up question from Sanket Sadh from Aarth AIF. Please go ahead.

Sanket Sadh

So my first question is, how much can the EBITDA margins expand next year and what do you think could be a sustainable margin in the future?

Shazad Sheriar RustomJi

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Currently, EBITDA margin and the PAT margins are much higher than for a company like us, not physically currently manufacturing the molecule. These are excellent EBITDA and PAT margins that we have right now. No one in the similar grouping would enjoy these kind of margins, number one.

Number two, we are definitely looking at enhancing the EBITDA and the PAT margins by moving into like the semiconductor facility that would come up, that would enhance the margins significantly. Even the HFO facility, that would allow better margins. But currently, I can't give you any numbers because we would be starting the sales in this year, current year. We would only enjoy one quarter of the new facilities. So the real difference you would see in next year.

Sanket Sadh

Okay. Fair enough. And can you please tell me a little bit more about the semiconductor facility? Do we already have some sort of arrangement with a private manufacturer who you would be supplying to?

Shazad Sheriar RustomJi

No. Currently, we were not in the semiconductor gas field. Number two, the electronics and semiconductor gas field, what we were very marginally into it. What we are looking at is to become one of the big players like Lindeo, Global Gas, et cetera, and Helium. Then in all the other products also like those that go to fiber optics, electronics and solar. So we are looking at gaining quite a good share in that segment. Currently, we are not a player. So the good thing for us is all these will add revenue streams, give us a sort of a stabilization versus our current business cyclical nature and more important, enhance EBITDA impact also because those places have a much higher EBITDA impact than our current business.

Sanket Sadh

Got it. So, as from my understanding, at least for the next maybe 1, 1.5 years, we won't be seeing any sales to semiconductor, like any sales from the semiconductor gases?

Shazad Sheriar RustomJi

No, you will see it. The last quarter of this year, you will see it. And the next whole year, you will see it.

Sanket Sadh

Okay. But I thought that there would be some sort of gestation period like you had mentioned. In order to actually qualify to be a supplier.

Shazad Sheriar RustomJi

Okay. I'll explain. Sorry. I meaning, you have to forgive me because many times in the flow of talking, we forget that you are not from the field. So, you know, we have to give more clarity when we are speaking. So I apologize. Let me explain it a little better to you. Now helium. Helium is, something that would be required by semiconductor units, et cetera. High priority

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

helium, 6mu helium is required there. But helium is also required for medical purposes. It's used for, like, space. It's used for research. It's used for testing. It's used for, million other purposes other than semiconductor itself.

Now helium is a very big requirement in fiber optic cable manufacturing, et cetera. In fiber optics, it's a very huge requirement. Semiconductor is used. Now all your MRIs, now simple, one of the big user groups would be like all your hospital MRI units. So someone like, say, Siemens or someone like GEO or any of these, manufacturers where they have the service requirements PAN India. So liquid helium is what runs your MRIs. So basically, you don't concentrate.

Now even for the navy, like the navy is one of the biggest users of for ultra deep-sea diving. They need helium oxygen mixture. Otherwise, your lung will collapse at that those depths. So what happens is, like, you will have a tender of, like, 400,000 cylinders of the navy for deep sea diving, helium oxygen mixture in various levels. Then you'll have for, like the MRI business, you'll have for the fiber optics. Then any testing, any laboratory, anywhere needs helium for testing in the gas chromatograph as a carrier gas. There's, like, hundreds of thousands of cylinders going in that application.

So it's not just, your, how to say, semiconductor unit that will require. You also have the ancillary businesses that require the product. We don't have a gestation period. That is why I have not said we will have 100% growth and we will grow at this scorching rate, et cetera. I've given a very, very conservative estimate of 30%, 35% because as soon as the unit starts, the first tanker of helium that comes in will be 26,000 kgs. You cannot hold helium. It has to get sold instantly. So basically, as soon as it comes, you're using liquid nitrogen to dampen any evaporation. The whole thing is in either in, vacuum insulated or flooded with liquid nitrogen to keep the temperatures at below minus 265 degrees.

It's entirely a cryogenic setup. And then you put it in containers either insulated again, like vacuum insulated or insulated with liquid nitrogen. And these have to be rushed out immediately. So your sales will start off instantly. You won't have a meaning the gestation period, the real now let me explain. The real business that will get set is where does Linde earn money? You all have heard of Linde. Now where do they earn? Over the years, they are approved source, say, for semiconductor with the foreign company, et cetera. So when any new unit comes, automatically, they have a prequalification.

Now they still have to go through the qualification, but they will it will be less than one-third the time that it could take us. But once you get qualified like that, the margins there, it's phenomenal. And not only the margins, the business is set. You don't have any disruptions once it's set. So ultimately, you will work towards semiconductor businesses, but it does not mean that you will not have sales or there is not volume that will go into all the other requirements.

Moderator

Thank you. We have a follow-up question from Prabal Jain from SM Holdings. Please go ahead.

Prabal Jain

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Sir, you mentioned that you are a forward integrated player in this industry and you are the only company. And, you also mentioned that you plan to be backward integrated. So can you explain, like, what exactly this mean in simple terms?

Shazad Sheriar RustomJi

Yes. There's a, basically forward integration and backward integration, now SRF Naveen, they are backward integrated. They manufacture the molecule that they are selling, but they are not forward integrated. They do not have a pan India supply network. They are out of wherever the manufacturing facility is. They will send from there -- till Chennai also, they will send from there till, Kashmir also, they'll send it to NCR region everywhere from that one location. As a result, the cost of transportation is 4x or at least 3x what it would be similar for us.

Second, when you are doing everything from one facility, your manpower at that one unionized manpower at that one facility is very high, 300, 400 people. Now when you break it up and each of your facility is next to your customer, just in time and below union strength, it gives you a very different advantage than what it would to your competitor. So currently, we are now we would be in six locations. Number one, geographically in, five locations. And the strength that it would give us is we're just in time to every single customer that is there. I mean, we aim to be one hour away from any customer, number one.

Second, our movement of cargo anywhere would be in 20,000-liter bulk tanks, not in, like cylinders or smaller packings or whatever. So what happens is the cost of transport, the cost of logistics, the cost of manpower becomes, like, almost one-third. So when you get into the real competitive way of move, that time, if you're not forward integrated, you're going to lag the see, today, we don't have the strength because we are not backward integrated. It is easy for us to go backward. But for all the people who are backward integrated to go forward, it is almost impossible.

Prabal Jain

Sir, but backward integrated, you mentioned the molecules are derived from some critical men metal or minerals, which China only has control. So how would you be backward integrated? If you would be needing those molecules.

Shazad Sheriar RustomJi

I'll tell you. See, it's like this. Now when you buy a fluorspar now suppose you want to make R32 gas. I'm taking the product that is manufactured in India. So like I said, out of 40 products, we are working in the local my peer group that I mentioned is dealing in five of those products only, and they manufacture two of those products.

So we'll speak since we are speaking on manufacturing, we'll speak, like, say, R32. So R32, how is it manufactured? You have to take the basic raw material, fluorspar. Fluorspar is blended with hydrofluoric acid in a reactor with a catalyst, and you get R32 as one component. You get dilute hydrofluoric acid as another. You get a waste stream that comes out. So now basically, in the reactor with heat, with the addition of, catalyst, et cetera, you're going to have the reaction.

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Now basic raw material is fluorspar. The biggest supplier is China today. So it does not mean that there are not other suppliers. Mexico is a major source. Then, you have, Vietnam. You have, other countries also. But other countries are very much smaller. The largest is Mexico and China.

Now Mexico, Mexico the problem is the mines are operated by a company that's already in the gas field. So the discomfort in buying from your competitors, that is why everyone relies on China.

Prabal Jain

One more thing about this business. You mentioned that the focus is on aftermarket clients who make up 80% of the market share and deliver substantially higher profit margins than OEM and OEM control 20% of the this. So when we are talking about this, first of all, who are the aftermarket clients and how does the aftermarket service work like?

Shazad Sheriar RustomJi

I'll explain. See, whenever any new business, now the HFO business that we're talking of, so for next 10 years, for the first two years, 100% business will be with OEMs. Then thereafter, it will slowly for the next 5 years, 80% of the business will be with OEMs, 20% will come for service requirement. Then after 7 years, every year then that percentage will start dropping. After 12th year, it starts inversing where the aftermarket grows to 80% and the OEM business comes to 20%.

Now in a OEM business, you have to understand how the business is done. You sign a contract for the whole year. The dollar went up, you don't get anything. If the price jumped up 100%, you don't get anything. Yes. If the whole market moves and it's a major mess, then fine. After two months of dragging the supply, they will enhance the contract, but still nowhere near what the real cost is. So first thing is you're in a very tight, how to say, position, number one.

Number two, as it is, out of 100% of the pie, you can choose wherever you want. So why would you want to take a portion of the pie where the liability is the highest, earning is the lowest and mobility is the least. So you will keep an OEM presence, but you will take a higher share from the aftermarket. It's more lucrative. It's got less liability and the price mobility is instant.

Prabal Jain

Got it, sir. Sir, one more thing on your margin, sir, because so I'm sure we'll be backward integrated, going ahead. But till the time we are not, like, obviously, there will be some volatility in terms of the margin, especially, and I understand you have 40 gases. So, like, there's a good booking of product and upcoming also, like, good product addition is happening. But can we expect, like, the margins are going to be volatile to certain extent because you won't be able to pass it on immediately to OEM customers.

Shazad Sheriar RustomJi

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

We have no -- see, you have to understand, we have never passed on the margins in that manner. That is what differentiates us from the other. There is a difference from a new company or a newcomer coming into a market and trying to understand and feel their way around. I'm first generation in this. This company was started by me when I was 22 years old, number one.

Number two, 30 years, the core team, from the company. The core team has been around over 25 years in the same field. We have never diversified or bought into oil or this or that. We have concentrated on what was our core product and we are today where we had, where our plan was that we will grow to the size, reach here, go ahead and go backward, et cetera. So we are -- as per our plan, we have been moving perfectly in sync with that.

Now when you have so much of experience and knowledge, you know exactly what is going to happen. Meaning, I can tell you exactly what's going to happen two months from now, one month from now. Okay. There are certain irrationalities which are beyond anyone's ability to foresee. But more than that, how the price movements would be, how the market movements would be there for us, it's first thing is experience. Second thing is it's more than experience of gambling. It is having a plan A, a plan B, and a plan C. What happens if this happens? What happens if this happens? So you have seen all the eventualities that can happen.

Now what are the eventualities that will happen? Okay. You might have, like, during the war scene, et cetera. So one of the things that we had to plan out was if war happens, the shipping definitely will shut in Mumbai, or it will be prohibitively expensive. So immediately what we did was, plan B was all shipping will get diverted to Chennai Port, make sure that the tie up, the clearing agents, et cetera, the logistic team, everyone has the tie up there.

Now when our Mambattu facility starts, that would be a real asset because then without seamlessly, we would be able to move into any port that we want. But what I'm saying is the planning starts from the level that if something goes wrong, what is plan A, what is plan B, what is plan C, a lot of your volatility gets removed in this.

Prabal Jain

Great. Sir, just, one more thing. This Honeywell, you have a distributorship agreement for refrigerant. Yes. Right?

Shazad Sheriar RustomJi

Yes.

Prabal Jain

What sort of drop line...

Shazad Sheriar RustomJi

Yeah. Please go ahead.

Prabal Jain

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

No, I mean I just wanted to understand what kind of revenue concentration we have for this plan, because you have a renewal coming up in December 2025 for this date, I guess.

Shazad Sheriar RustomJi

It's sort of perpetual only. There's no renewal. Meaning, it's that's more paperwork. So we've been with Honeywell 20 years. 2006 till date, we are with Honeywell. Now earlier, it used to be it's a nonexclusive agreement. No American company signed the exclusive agreement. So everything is nonexclusive, but it's pretty much worked as an exclusive agreement. Now you have to understand, Honeywell had its strengths in the early part of, the 2000, like, from 2000 to 2015, they had a lot of strength. Now what happened is HFC business, more now India falls under the third world grouping. So we are the last to change over.

America, the first world, changed over instantly. So what happens is now there's no HFCs or very restricted highly restricted HFCs used in, like, in the West, in US, Europe, Japan, et cetera. The move out of HFCs will be much faster there, complete move out of HFCs. There will be in India. India will have a lag of 30 years. So what happens is now they have moved out of HFC, and they do not have this earliest trend that they had in HFC. As a result, the sales major part of the sales booming in India, still HFC.

So predominantly, right now, their share of business comes down, number one. Number two, HFOs, whether it's invented by them, patents are with them, very strong positioning globally is with them. So HFOs as it starts growing, it's a first mover advantage with us. It's restricted to all, meaning I can sell HFOs in India. My peer group cannot sell. They can't sell one kilo.

Prabal Jain

I mean, you as in -- you or Honeywell?

Shazad Sheriar RustomJi

Honeywell as in through stallion. No sales done by Honeywell then. It can only be done by us.

Prabal Jain

Okay. So you will be the exclusive supplier for that HFO?

Shazad Sheriar RustomJi

It's not again, like I said, no American company signs anything exclusive. But, over the last 20 years, it appears to be pretty much that way.

Prabal Jain

Okay, great. Okay, sir. And so last is on your cash flow. I mean, what kind of cash flow cycle do we understand for our business?

Shazad Sheriar RustomJi

Meaning?

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Prabal Jain

Meaning like, if you supply like INR 100 crores worth of gases in a month, like when do we expect the payments to come in?

Shazad Sheriar RustomJi

Normal see, normal most of the when we moved segments, like when we moved to Dow, when we moved to HOSANG, when we moved to JCI, Train, et cetera, we moved the industry segment. Earlier, we were strongly with, like, set people like LG, Voltas, BlueStar, et cetera. So there, it was, like, a 30 day it within the terms of 30 days, but the cycle was usually about 60 days, and that flow was there. So, as we move to newer products and newer business alignments, the new customers are all on 120-to-160-day cycles.

Now we moved all of them into vendor finance and discounting. So the payment cycle should improve significantly, but currently, they are at 90 days average. But we are we are looking at moving it faster out because all of them, we have access. They went the financing. So, like, Dow has Citibank discounting the bills at no recourse to us. So they discount and they make the payment immediately. So we moved I think we have moved things like that to get better realization, faster cash flow turnarounds.

Moderator

Thank you. The last question for the day comes from Bhavika Singhvi from Niveshaay. Please go ahead.

Bhavika Singhvi

Thank you. So my question is, could you please share the current revenue split between after sales service and OEM sales?

Shazad Sheriar RustomJi

It's for us, it is majority majorly, we are concentrating currently. See, you have to understand how we look at it is, where is the major funding, major revenue, major profitability going to be there? So we are going to move majorly in between OEM and aftermarket for the next one year. Currently, aftermarket reliance is 70%, OEM is 30%. Now when we start with the Specialty Gas segment and the HFO segment, again, we will move 100% back to OEM because HFO, there's no aftermarket, it's all OEM. And Specialty Gas, again, it'll all be OEM, there's no aftermarket. So we would keep moving in between the two segments. Currently, ours is 70 driven as aftermarket.

Bhavika Singhvi

Okay. And for FY 2026, how much sales are you expecting? Like any, like, order book or something? Like, how many contact contracts stadium have currently in hand?

Shazad Sheriar RustomJi

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Let me put it this way. After the year started of April, the year started off very beautifully, I think, for all industry, everyone. This current, little border issue that after Pahalgam that happened, unfortunately, it has had its ripple effect on business. It's not that it's not, without totally without consequence. So from what was a sterling quarter that was starting off, it got subdued very badly, number one. Number two, the year continues with the same forecast that we have, 30% to 35% growth.

Bhavika Singhvi

Okay. And is there any, like, can you share the numbers regarding metric tons Stallion can't reduce through its capacity? Like, what is the capacity of Stallion currently without the expansion?

Shazad Sheriar RustomJi

We put it in the RSP. Each plant has capacities I mentioned. Those capacities would, you know, we've explained many times that the capacity, you have to understand, for a blending or a unit like us. So in India, the requirement in summer, per month, it would be, like, 4,000 tons. The same requirement for six months of the year is 400 tons. So now which capacity will you build? To meet peak demand or to meet the low demand? So many times, like, companies like SRF or et cetera also, when the demand was 3,000 tons in India, they're still set up for 10,000 tons plant because 10,000 tons, plant divided by 12 means 800 tons a month. And in summer, even during the 3,000 tons, the summer months would be, like, 1,000 tons. 2,000 tons would be in the summer month. So they would never be able to meet the summer demand.

So the capacities were enhanced and remaining, they started exporting out. So if you need to meet the local demand, this business that is why this business is very difficult and not easy to handle or understand because the difference between season and off season or peak demand and non-demand is like 10x.

Moderator

Thank you. I would now like to hand over the floor to management for closing comments.

Shazad Sheriar RustomJi

I would like to thank everyone for the call today. It has been a real good journey post IPO till today. We are happy that after the IPO, our growth story continues, number one. Number two, all the plans, et cetera, that we have got onwards for growing the company, for the vision for how we want to make it absolutely independent of cyclical fluctuations, et cetera, by being across so many business segments and then anchoring ourselves so firmly, so such that it is how to say, most the company gets more structured, the company gets more integrated and the company's operating margins, PAT, EBITDA, et cetera, improve in line with expectations of all investors also and the returns also show what work we have put in.

We look forward to making sure that we have a lot more success stories like we had in this last quarter, and we would be in touch with you all.

Moderator

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025

Thank you, sir. On behalf of Ventura Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

• Note: 1. This document has been edited to improve readability

• Blanks in this transcript represent inaudible or incomprehensible words.

Stallion India Fluorochemicals Limited Q4FY25 Results Conference Call

20.05.2025