Aether Industries Ltd (AETHER) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Your passcode has been confirmed. Please wait while you are joined to the conference. The conference is now being recorded.
Moderator: Ladies and gentlemen, good day, and welcome to Aether Industries Q2 FY '27 Earnings Conference Call hosted by HDFC Securities Limited. 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nilesh Ghughe from HDFC Securities Limited. Thank you, and over to you, sir.
Nilesh Ghughe (HDFC Securities Limited): to all. On behalf of HDFC Securities, I welcome everyone to this Aether Industries conference call to discuss the results for the quarter ended September 2026, and half-yearly performance of FY '27. From the Aether Industries, we have with us today Dr. Aman Desai, Promoter and Whole-Time Director; Mr. Rohan Desai, Promoter and Whole-Time Director; Mr. Faiz Nagariya, Chief Financial Officer; Mr. Kushal Doshi, Lead Investor Relations; and Miss Shubhangi Desai, Executive IR. Without further ado, I will now hand over the floor to Mr. Kushal Desai. Over to you, Kushal.
Kushal Doshi (Aether Industries Ltd): Thank you, Nilesh. A warm welcome to everyone. Today, the board has approved the financial results for the second quarter and half year ended
Kushal Doshi (Aether Industries Ltd): for fiscal year 2027 and the same has been filed with the stock exchanges as well as updated over our website. Please note that this conference call is being recorded and the transcript of the same will be made available on the website of Aether Industries Limited and the stock exchanges. Please also note that the audio of the conference call is the copyright material of Aether Industries Limited and cannot be copied, rebroadcasted and/or attributed in press or media without specific and written consent of the company. Let me draw your attention to the fact, on this call, our discussion will include certain forward-looking statements which are predictions, projections, or other estimates about future events. These estimates reflect management's current expectations on future performance of the company. Please know that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Aether Industries Limited or its officials do not undertake any obligation to publicly update any forward-looking statements whether as a result of future events or otherwise. Now we'll ask Mr. Rohan Desai will begin by sharing Aether's business outlook, ongoing expansions. And then we'll have Dr. Aman Desai who will provide inputs on R&D and new client initiatives and strategy of the company. Hand over the call to Rohan for his opening remarks. Over to you, Rohan.
Rohan Desai (Aether Industries Ltd): Thank you, Kushal. Good afternoon, everyone, and thank you for joining us for second quarter results call. Before we begin, on behalf of Aether, I wish you and your family a very happy and prosperous Diwali. It is a season for new beginnings and that feels right where Aether is today. Q2 is a solid quarter. It reflects disciplined execution, the strength of our product portfolio, and the growing strategic role we play across all three business verticals. The macro environment remains volatile, but we have kept building momentum and we are laying the foundation for our next phase of growth. Our CRAMS and CRAM businesses continues to lead. Together they now contribute over 65% of our sales. That comes from the continued ramp- -up of our major CRAM contracts and from new CRAMS projects we have added. Today I want to focus on few key developments, increased portfolio with Baker Hughes and our progress in semiconductor businesses. As you know, we have already manufactured a few products for Baker Hughes at our dedicated starter site, which is site 4. We are not now taking sorry, we are now taking this partnership a step further. We have commercialized an entire new set of oil field industrial chemicals for Baker Hughes, which have been shipped in quarter two of financial year 2027, which is the current quarter under review. We have successfully finished the required minor modifications for one of the production streams in starter site to accommodate this new product. We see great potential for this new products as we service Baker Hughes customers worldwide. This clearly showcases Aether's depth and long term nature of this relationship as we envisage to become Baker Hughes strategic partner of choice for future products and projects. This matter beyond one contract. Recent events have reminded the world how important energy security is. We expect oil and gas to attract significant investments over the coming years and Aether is well placed to benefit. Oil and gas already accounts for 33% of our sales and we expect it to remain a key growth driver. On our semiconductor business, we have moved quickly here since our last call. I am pleased to share that we have started our first commercial shipments to semiconductor customers from our existing production facilities. Volumes are modest today, but we are growing month on month basis. For us, this is a strong validation of our capability, our quality, and the trust our customers place in us. Our new production block for this segment at the Magnum site is being equipped and is on track for commercial production from quarter four of financial year 2027. In terms of looking ahead, the execution at Magnum site and the expansion of our R&D facility are on track, and in the several places, ahead of schedule. We are working on number of exciting opportunities and expect to conclude agreements with legal leading global companies of over the coming quarters. None of this would have happened without our people. I want
Rohan Desai (Aether Industries Ltd): every member of the Aether team for their commitment this quarter and our customers and shareholders for their continuous confidence in us. With this, I will hand over to Aman, who will update you on Dow silicon project, our ongoing client discussions, and a new contract with leading global agrochemical company. Over to you, Aman.
Aman Desai (Aether Industries Ltd): Thank you, Rohan. And good afternoon, everybody. Welcome to this call. I'll start with our multi-year research program with Dow to develop advanced silicones manufacturing technology in India. Since we announced it on 31st July, both teams have been working full-time and making real progress in moving this from a scientific exploration idea on paper towards a commercially viable technology platform. It's a multi-year research program, and it's very exciting. It's also a genuinely new and incredibly complex chemical engineering challenge. Consequently, it is incredibly fun for us because we specialize in accepting and solving challenging problems in chemistry and chemical engineering. Scaling up this technology will need real innovations in process design, material flow, materials of construction, and operating conditions. We are operating at extreme temperature and pressure conditions in the continuous flow regime, which is a which is what we have competencies that we've built over the years or several platforms. Our approach is to break a complex, first-of-its-kind problem in this project into clear, manageable workstreams while we balance timelines and capital efficiency for the future plant. Our immediate goal is to design, build, and operate a pilot unit. It will answer the key engineering questions and give us the data we need to design a multiscale full-scale, multi-kilo ton, multi tens of kilotons commercial plant. We see this as a long-term investment and capability and one that could potentially become a distinctive platform for Aether, which we could base of explorations for decades to come. CRAMS remains at the heart of our business. As Rohan mentioned, our new R&D and manufacturing infrastructure is well on schedule, and we look forward to bringing it online as early as possible. Our pipeline is quite strong. We are currently working on more than 65 CRAMS projects in our R&D and pilot plant. Our NMR-based analytical capabilities have helped us broaden our work with global majors and go deeper into their development pipelines. Customers increasingly see us as a trusted innovation-led partner for complex, long-cycle programs. We continue to win across sectors. This quarter, we started new CRAMS engagements with an automotive ancillary major, a global mining company, and a different oil and gas major. The automotive ancillary major project and the global mining company project are both serious, long-term commercial opportunities, being started in the R&D and the CRAMS business model, and ultimately, these will open up entirely new rounds new fronts for Aether with respect to end application in the chemical industry, which is something we take pride on is our diversification in the end industry applications in the chemical industry. Europe is another area of growing momentum, especially we are working with a lot of long large-scale manufacturers and companies in Europe, but we are also in serious discussions with several small and mid-sized European specialty chemical companies, which is unique, I believe. They bring deep chemistry know-how, and they're increasingly looking to Aether as their manufacturing partner. Finally, we have also moved our R&D operations from 24/6 to 24/7 this quarter. We've started that, and we'll finish that over the next month or so, and this is a first for this company. It means faster responses, quicker project execution, and stronger customer engagement. This quarter, we have also signed a new CEM contract, contract exclusive manufacturing contract, with a leading global agrochemical innovator. It is a new chemical entity. Over the last 12 to 16 months, we've completed the customer qualification fully. Production will be at the fourth production block of our Magnum site and start in Q4 FY '27. This contract matters to us. It shows that we can take a complex CRAMS program all the way to a commercial CEM contract even in a sector which is going through a difficult period. Pricing is confidential, needless to stay, but but we plan to start at 200 to 250 tons per year in Q4 FY 2027 with a projected path of around 600 tons per year over time. This project is yet another example of a project that was started in R&D with a globally leading innovator in the CRAMS business model, the technology and process being fully developed and validated at Aether, scaled up in the Aether pilot plant, and then ultimate
Aman Desai (Aether Industries Ltd): contract exclusive C-E-E-M manufacturing business model. In the first half, we have added 16 new customers, completed more than 20 customer and certification audits. We are also been negotiating several contracts in the recent months and expect to conclude a number of them this financial year, and so please keep a look out for the announcements to come in the next few months. These contracts will fill capacity at Magnum and our capacity there, confidence to fulfill the capacity being build in Magnum keeps growing month-on-month. We now do have line of sight on 14 of the 16 production blocks at Magnum. Two are earmarked for LSM products, the remaining 12 are earmarked for C-E-E-M contracts which we expect to commercialize over the next two to three years. This thus conclude my remarks, looking forward to your questions and ahead of the festive season, I wish you and your loved ones a very happy Diwali and a prosperous new year to come. Stay safe in your travels and have a lot of fun, and spend time with your family. Thank you very much, Kushal.
Kushal Doshi (Aether Industries Ltd): Hey, thank you, Aman. We will open the floor for Q&A.
Moderator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sajal Kapoor from Antifragile Thinking. Please go ahead.
Sajal Kapoor (Antifragile Thinking): Yeah, thank you for the opportunity. Am I audible?
129 more turns of this transcript: log in to Stocksigma to read the full call.