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Earnings Call Analysis
Q1-2025 Analysis
Archean Chemical Industries Ltd
Archean Chemicals faced a tough start to FY '25, reporting total revenue of INR 2,234 million, reflecting a significant year-over-year drop of 37%. This decline was primarily attributed to logistical issues, particularly difficulties in shipping, which had a profound impact on their export-driven business model. In this quarter, approximately 72% of revenue came from exports, highlighting the company's reliance on international clients.
Bromine and industrial salt were the main contributors to revenue, with Bromine accounting for around 55% and industrial salt contributing 44%. The remaining 1% stemmed from Specialty Organic Products (SOP). Specifically, industrial salt revenue was recorded at INR 1,172 million, while Bromine contributed INR 937 million. However, the company remains optimistic as customer contracts are still intact, indicating demand continuity despite the challenges.
The EBITDA for Q1 FY '25 stood at approximately INR 849 million, resulting in a margin of 38%. This margin was achieved through various operational efficiency measures, although it represents a decline compared to previous quarters. Net profit after tax was reported at around INR 485 million, showing resilience in profitability amidst top-line challenges.
Moving forward, Archean Chemicals is focusing on recovery in the salt segment, anticipating better logistics in the second half of FY '25. For Bromine, they expect to produce between 22,000 to 25,000 metric tonnes, a conservative outlook that reflects current market uncertainties. The company has noted that their export market for Bromine saw a healthy uptick, suggesting a potential recovery.
The company is making strides with SOP, recently commissioning a pilot plant in collaboration with a technology provider, expecting sales to commence in the third quarter of FY '25. This initiative is part of a broader effort to diversify product offerings and hedge against market fluctuations.
A significant move for Archean is the acquisition of Oren Hydrocarbons, which will allow them to integrate specialty chemicals and broaden their product range targeting the oil and gas industries. After receiving the NCLT order in July 2024, operations are anticipated to begin in H2 FY '25. The company aims for sales of over INR 200 crores from this segment, although they are taking a conservative approach regarding timing and capacity utilization.
Despite the near-term challenges, the management assures that existing contracts and continued customer support will stabilize revenue streams. They emphasize a focus on internal efficiencies and cost management as core to their strategy moving forward.
Archean is well-positioned in the market, especially in Bromine, due to a solid customer base and ongoing demand from industries such as agrochemicals and flame retardants. The company acknowledges the potential for increased competition, particularly from new entrants in the market, yet maintained confidence in their superior capacity to meet long-term contracts sustainably.
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Ladies and gentlemen, good day, and welcome to Archean Chemicals Industries Limited Q1 FY '25 Earnings Conference Call. 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 are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Ranjit Pendurthi, Managing Director of Archean Chemicals Industries Limited. Thank you, and over to you, sir.
Thank you. Good morning, ladies and gentlemen. We wish you all a warm welcome to our Q1 FY '25 earnings call. Thank you all for being here today. Today, we are joined by Mr. N.R. Kannan, our Executive Director; Mr. Raghunathan, our CFO; Mr. Rajeev Kumar, our DGM Finance; and SGA, our Investor Relations adviser.
I assume everyone had an opportunity to go through the financial results and investor presentation, which has been uploaded on the stock exchange and on our company website. I will further give you a quick snapshot on the industry and recent developments of the company as well. Post that, Mr. Raghunathan, our CFO, will walk you through the operational and financial performance of the company.
To start with the industry highlights. As you know, the chemical industry has been seeing some green shoots recently. And after a brief period, we also are witnessing the same. There is some restoration and stabilization of demand in the chemical industry in the last few months. Although it seems momentary as demand across the end user industry remains a bit weak and China continues to struggle to revise its economy, we on the other hand have experienced some delays on availability of vessels, containers, and increased freight costs, which posed some challenge for Indian manufacturers. This has impacted the overall dispatch and business momentum across the board. The same, of course, has affected many major Indian exporters, especially in the chemical industry.
As you may already know, export accounts for more than 20% of our total business. This recent logistics-related challenge has had a bearing on the delivery schedules as well as some impact on shipments. However, to note, we continue to have healthy inquiries across all the products and expect to have a good recovery in the coming quarters. We have been consistently reviewing our internal measures to mitigate any rising costs as well as to stabilize dispatches in a timely manner. Our team, of course, is in constant touch with all our clients and is grateful for their support.
To give you a quick glimpse on the recent developments on respective products. To start off with Bromine, we continue to see a steady demand from the domestic market as well as encouraging market pickup on the export side from all end users like agrochemicals, pharmaceuticals, and flame retardant manufacturers overseas. Export market as well had an uptick in demand in this quarter and should gradually improve in the coming quarters. We aim to produce nearly 22,000 to 25,000 metric tonnes of Bromine for the year, including captive requirements.
On the Industrial Salt front, Industrial Salt suffered some dispatch delays in Q1 FY '25. And as you're aware, export markets account for majority of this business, greater than 95%. To give you more insight on the same, a large fleet of trucks are being engaged on a daily basis for movement of Industrial Salt from the plant to both Jakhau and Mundra ports for exports in vessels.
The quarter gone by had been difficult to manage due to shortage of trucks as well as nonavailability of berthing schedules at Mundra and Jakhau. This switchover generally happens before the monsoon period starts in April. And we lost a couple of weeks in the shipment movement from switching from Jakhau to Mundra, hence the dispatches were reflected in the quarter being lower than similar quarter last year.
However, the demand remains firm and customer contracts continue to be in place and we only believe this to be temporary. We continue to remain optimistic in the salt segment and expect a good recovery in FY '25. However, this growth will be contingent on how these external challenges ease out in the coming quarters. Here, we will focus more on improving our processes and cost efficiencies as well as the logistics.
SOP, the third product that we produce. On the SOP, we continue to make significant headway over the last few months, and recently have commissioned the pilot plant at the technology provider's lab with a larger sample size, and we continue to contemplate to make a second wave SOP and are seeing some inquiries from both the global and domestic markets. So we should start seeing some sales in the third quarter. So it's a work in progress, as we have said before, and we continue to expect meaningful contributions in H2.
Moving on to Acume, our subsidiary for the Bromine derivatives business, the Clear Brine Fluids, and the PTA Synthesis business. The response to CBF and PTA synthesis is very encouraging and have already received approval from around 10-odd clients. We are in discussion with more than 1/3 of our total client base. Given that this product is more technical than elemental bromine, we're actively engaging with clients to conduct trials and determine specific requirements. We have seen favorable progress in these products and expect a healthy contribution in FY '25.
The fifth part is Oren Hydrocarbons. We received the NCLT order on 9th of July 2024 for acquiring this unit. This unit focuses on the hydrocarbon space and serves the oil and gas and drilling industries. The key rationale behind this acquisition was to offer a product basket to clients by adding specialty chemicals and CBF products. This will help to build a long-term relationship with them, because these derivative products are complementary to each other as well as to our Bromine derivatives business.
We've made some investments in these units to refurbish them and restart the plants, and we will expect business to start from H2 FY '25. Going forward, we will be establishing relationships with new clients, broadening our product portfolio, and ensuring the stability of our new manufacturing site. We are certain that we will grow gradually in the coming years.
That's it from my side. Now I would request our CFO, Mr. Raghunathan, to run through the financial performance.
Thank you, sir, and a very good morning to all the participants on the call. We are pleased to report a notable performance for this quarter. To give you a quick financial summary of Q1 of FY '25 on a stand-alone basis. The total revenue for this quarter stood at around INR 2,234 million. However, there is a drop of around 37% on a Y-o-Y basis.
As highlighted by MD, the drop is predominantly due to the logistics challenges at the ports. Export market accounted for around 72%, and the balance 28% is from the domestic market. Bromine contributed around 55% of our total revenue, and Industrial Salt has contributed around 44%. The balance 1% has come from SOP. EBITDA for this Q1 stood at around INR 849 million with a margin of 38%. Various operational efficiency measures have been undertaken across all activities to hold on to this margin range. Net profit after tax for this quarter stood at around INR 485 million. With this, we conclude the speech, and the floor is open for Q&A. Thank you.
[Operator Instructions] The first question is from the line of Sanjesh Jain from ICICI Securities.
First, I want the breakup of the revenue and volume for the Salt, Bromine and SOP for this quarter. What is the, say, revenue as well as volume sales?
Good morning, Sanjesh. The revenue of Salt for this quarter is around INR 1,172 million, Bromine is around INR 937 million, and SOP is around...
SOP is?
SOP is 22.
32?
2-2.
2-2. And volume?
Volume, the sold quantity of salt is around 660,000; Bromine is around 4,700 plus; and SOP is around 66 tonnes.
66 tonnes. Great. Ranjit, the entire lower volume in salt is attributed to the dispatch problem, or this is a significant pressure on the caustic and soda ash player in terms of realization? Has that also started catching up?
So thanks for the question, Sanjesh. So as you all will be aware, we have fixed contracts on salt and those contracts continue to run. So there is no challenge for us on the sales side. All those contracts have already been signed and continue to come through.
Our challenge has purely been on the fact, as I mentioned in April, we had a switch over from Jakhau to Mundra, as we do every year. However, in this particular case, we lost almost 2 weeks because the weather turned abruptly bad. And as you know, monsoon has come a bit early there as well in the region. So we've had to move to Mundra and we had some delays. Hence, there was a drop in volume, as I also indicated. But having said that, there is no issue with regard to all our exports on the customer side. All of them continue to offtake the contracts as signed.
Got it. And again, precisely on the monsoon. This time monsoon has been very good, particularly in the Western part. And you have said that the monsoons were early as well. Are we seeing any weakness for the second half, which generally gets impacted by the monsoons and production gets a little bit slower than other quarters?
I think monsoon has been extra good this year. So I think it bodes well for the country and the economy, considering that it has a large impact on the agriculture sector. And if the agriculture sector does well, the agrochemical sector does well, thereby we do well. I think that is the run-up to us also coming through better performance.
So I think as that sector improves its outlook over the next few quarters, I think we'll probably run parallel to that improvement in what we do as well. So coming to specifically on the second half, yes, historically, it's a bit weaker, simply because of rains. And there is some amount of dilution in the concentration levels in the brine. But I think we are prepared for that, as we are every year. And I don't think we will deviate too much from what we set out as targets even historically.
Fair enough, fair enough. Then next on the Bromine side of it. Last quarter, we were looking at a volume of 25,000 to 28,000 metric tonnes for this year. And now, in your opening remarks, Ranjit, you said 22,000 to 25,000 metric tonnes. There is a small dip in the expectation of the Bromine volume. Any particular reason you are seeing a little softer first half impacting the volume? Or you expect the recovery should be more gradual than what you thought earlier?
On volume basis, I think we've done better than we did last year same period. So I think we are a bit ahead. I wouldn't say largely ahead, but marginally ahead. So I think that's a healthy sign. I think as our derivative plant ramps up, I think we will start consuming a bit more there. I think we've just been a bit conservative on what we have said in the beginning, what I have mentioned, in fact, 22,000 to 25,000 metric tonnes. I think we're just, like I said, being conservative and not being unnecessarily aggressive.
Got it. Last on the...
Sorry, just to clarify, I think on the demand side, we have no issue, because as you would see, the exports have come back on stream. We're doing quite a bit on export, and domestic market, as I mentioned, remained healthy.
Fair enough. Fair enough. On the Acume side, it's been 2 quarters we have been manufacturing, and you rightly said that we have approvals from the 10 clients. When should we expect the supplies to accelerate? It's more second half? And do we still stick to that 50% kind of capacity utilization for this FY '25?
I think the sales will start coming through in H2, as I indicated. At the moment, I think we'd probably be in a better position to tell you maybe on the next call or over the next couple of months. The ramp-up is going on. And on the demand side, I think we remain encouraged seeing the response we're getting.
And also I think it's giving us a chance to do some specialty products where others are not doing. So I think you will start seeing the sales come through over the next couple of months, starting maybe September, but to be, again, on the safe side, I think from October, the second half.
Got it. Got it. One last question on the Oren. Now that we have all the approvals, when should we start the plants. I believe they had some 5 or 6 plants. Are we commissioning all the plants? Or it will be more phased way?
I will take the second part first. I think it will be in a phased manner, because they are different plants. So we are exercising caution. We don't want to jump in and start spending money everywhere. So I think we would like to be a bit more pragmatic in what we think we should start. So we're starting the 2 plants that have a direct connection to the oil and gas drilling industry as well as the Clear Brine Fluids products. So I think we'll be going segment-wise, that's where we're going first.
And from the product, it will be all, starch, barite, and bentonite, all will be there or it will be more of starch?
Maybe starch and barite.
It will be starch and barite.
[Operator Instructions] The next question is from the line of Yashita Banka from Ratnabali.
This is Abhinav Chandak here from Ratnabali. I have one clarificatory question on the volumes that you said. So I wanted to know, your salt volumes you said was like 660,000 tonnes for the quarter, correct?
Yes.
Okay. So why this dip is something you said because of logistics. So you assume that or you feel that next quarter, the volumes would pick up and the loss for the current quarter would be made for? Or what is your guidance for the full year for the salt volumes?
I think, we don't necessarily see quarter-to-quarter in terms of how we do the business, because the contracts by nature are long term, 1 year, 2 years. So I think we measure what we're delivering to customers, and if there is any backlog in any certain customers, then those shipments will also be completed. So our contractual obligation is to complete the contracts we have in place before March. So we will do whatever is required to ensure that we stick to that overall volume.
Okay. So are you giving any overall volume guidance for the year also for the salt, like you gave for Bromine 22,000 to 25,000 metric tonnes, is there anything for salt also?
I believe we have given in the previous call, but...
So you will maintain that?
I think yes. Well, we don't see a reason to change it at the moment.
Okay. Okay. Sir, I had one more question on one of your subsidiaries, which you have recently formed in some semiconductor business. Can you throw some light on what exactly they are doing? What acquisition they have done? And [Foreign Language] what exactly is it? Can you throw some light on that?
I think it's a work in progress. We do have a tie-up that we signed with IIT Bhubaneswar. We just started some groundwork on silicon carbide crystal growth, which, as you know, is in the semiconductor space. But I think over the period of the next few months, we'll probably have more to speak about that beyond what I have mentioned now.
Okay. What exactly we'll be doing there, sir?
With IIT, all projects generally are research and development in nature, R&D. So I think we've picked up in R&D. Like I said, I think what we do with it will probably be clearer over the next few months.
Okay. As far as this Oren acquisition is concerned, you mentioned that from H2 FY '25, the numbers would start to come in. How much of a delta would this give to our margins? If you could give some guidance on the margin also for the year?
At the moment, I don't have a guidance on the margin because the plant -- we just got the NCLT order only in July. So we have effectively been able to only start work on plant refurbishments, renovations, et cetera. So our team actually has got physically into the sites only post NCLT order, because that only gives us a legal basis to get in there. So I think the business, we hope, like I said, will start in H2. So that's, I think, what we are maintaining. Specifically, guidance, I think will probably have to wait.
Okay. I have one last question, and there are two sides to that question. So one question is on the guidance on the Bromine prices, the way you see Bromine prices from here, say, next 1, 2 years from now.
The other question is, are there any large serious players who are also entering the run? Because what I read from articles that a couple of players have got sizable land parcels allotted in run. Do you see some significant competition or large competition coming and hitting this space? Or the allotment is for some other purpose?
I think competition in any industry is going to happen. It's just about having a first mover advantage. So there are, I think, a couple of more people who are producing. I think the question will always remain the capacity that we have, the infrastructure that we have, and the ability to deliver the volumes that we have. It's similar to salt. I think salt is an 8-year-old industry, many players in it. But I think today if someone has a large contract for supply that they would want, I think we'll be one of the very few that would be able to do that on a consistent basis on a 1-year, 2-year contract.
So same with Bromine. I think Bromine is not going anywhere. Having said that, end users, I think, are increasing and continue to be some critical end users. And in terms of, I think, the first part of your question on pricing, I won't hazard a guess on price, but I think I've said this even maybe over the last couple of years, whenever the calls have happened, that I think the pricing that we are seeing now, I think, it has stabilized over the last couple of quarters, and I don't see a reason for it to drop.
The next question is from Archit Joshi from B&K Securities.
Sir, my first question is on the project that we have held back for some time, which was the Phase 2 of our derivatives expansion, largely the flame retardant bid. Any progress on that account, sir?
I think we are in the process of finalizing the technology. And I think it goes back to my last call or the previous one before that, where I said, we're going to do it in a realistic way, in a measured manner. The market as such is not going anywhere given that we are captive bromine. So I think we'll take our time to do this. The first thing is, I think it goes back to someone else who asked on the call earlier, we want to get the first phase up and running and hit the volumes there. And I think we will continue to progress on the Phase 2 in a measured manner. But it will depend on the permissions and all those other things in place as we speak for Phase 2.
Right, sir. Any timelines that you might venture out over here with respect to commissioning of the plant?
For sure, we won't do it before March '25.
Right. Sure, sir. Sir, speaking of the same, flame retardants as an industry, even though there is some bit of a derailment with respect to our plant, could you comment on how the global dynamics are working out to be? I think a large part of Bromine is consumed in flame retardants globally. And the industry volumes, I think, if I take a year-on-year look for the last maybe 3 or 4 years, at least our Bromine volume offtake has been pretty much similar. Would you allude that to the global challenges in flame retardants? Are they on the verge of an improvement? Any comment that you might want to give out globally?
I think you've asked me a very global question. So I would like to also give you a global answer, not a specific one. So industry, I think, will stay intact. We don't see the Bromine industry or end use changing too much. I think the agrochemical use and the flame retardant use both, I think, continue to be healthy. Of course, each one is dependent on a different set of factors.
But having said that, I think we're ideally positioned from an India context to be a strong producer and supplier of Bromine, both domestically and export. So I think our leadership position on that front, we expect to hold on to that.
Sure, sir. A short global question again, sir. Sir, has there been any shift with respect to -- in the supply chain, rather, when it comes to us having a stronger hold in the Chinese markets, India as a country when it comes to Bromine exports into China. And some of the reports suggesting that because they have found their own reserves in Laos, Djibouti, and some of these geographies, they have kind of shifted away from that earlier phenomenon, which was driving our exports growth for India as a country. Is this holding through even now? What would be your opinion on that?
I think there are some new geographies that are producing, but I think the logistics is a challenge for them. Some of these are not in the easiest of places to evacuate from or connectivity or probably don't even have a port in their own country. So I think on that front, we will continue to have an advantage. And of course, the geopolitical situation from Middle East, et cetera, I think there's uncertainty there. No matter what the price is, at least the buyers all know that it's certain to be supplied from India. So I think it's positive in one sense for us as a country, and I think neutral in terms of more downside, I think, from any other source affecting the supply.
Sure, sir. One last, I'd like to squeeze in. There is a press release by IIT Bhubaneswar saying that the estimated cost of this SIC crystal is approximately INR 45 crores. Would that funding entirely be done by Archean Chemicals?
Not entirely. I think it's a collaboration with IIT Bhubaneswar. So as you know, working with government institutions has various components, but safe to say a large part of it will come from us. But there will always be some amount of, I think, government grants or any such thing that IIT will also be able to access. So...
Our next question is from the line of Krishan Parwani from JM Financial.
Just a couple of clarifications. So can you please give a breakup of Bromine exports and domestic in this quarter and last quarter, please?
Please give some time. I'll disclose the numbers for you.
Okay. And the second is on the derivatives side -- I mean, Bromine derivatives side. Can you please indicate the CapEx for Bromine derivatives? This is ex of flame retardants that you have incurred till now, and what is the remaining CapEx?
CapEx on bromine derivative plant, what we incurred?
The total project cost is around INR 252 crores, of which we have spent around INR 140 crores plus till date.
INR 140 plus crores. And how much is remaining? This is ex of flame retardants, I'm asking.
So the balance that we have to spend will be around INR 10 crores to INR 15 crores to mimic our CBF and catalyst to PTA products to produce.
Understood. So the rest, let's say, INR 100 crores is kept for the flame retardants, correct?
Yes. And coming to your first question, our domestic sale of Bromine is around INR 58.8 crores, and our exports is around INR 34.9 crores.
Okay. And the pricing is same, or pricing is different for the domestic and export market?
Almost the same.
Almost the same.
Okay. And just a follow-up on that. So I mean, if we look at the China spot prices, they have been around $2.83 or so. So are we seeing any uptick in our Bromine pricing? Or will there continue to be a disconnect between that?
I think spot price is something that we feel happy seeing, but not necessarily we sign on those rates. I think the way we see the spot price is that it's a good sign that the demand is healthy. But from a contracts perspective, the contracts probably are signed before movement in these prices. So sometimes they go down, sometimes they go up, as you're aware. But our prices are a little bit lesser than the spot prices. These are long-term contract prices, right? So...
Yes. Yes. Yes. I understand. Okay. And just a small bit on Oren Hydrocarbon. So I think you mentioned in your opening remarks or probably in one of the answers earlier that you'd be making some investments to, let's say, refurbish the plants. Can you please highlight the quantum that you'd be spending, apart from the INR 70 crores or INR 70-odd crores that you've already invested to acquire through NCLT. So what will be the quantum for this?
I think we anticipated that we would spend maybe at the outermost about INR 40-odd crores. So I think we're well within budget, and that was for all the plants. But at the moment, we are only starting with 2. So it will be considerably less.
Noted. And in terms of Salt, how much -- I think volume probably is it 4.5 million metric tonnes, or how much is it for the year?
For the year?
Yes.
It has been around that, yes, sure.
In that range, right, 4.5 million metric tonnes?
Yes. Yes.
The next question is from the line of Aditya Khetan from SMIFS Institutional Equities.
Sir, my question is on to the Bromine derivative side. Sir, as you mentioned in your presentation also that some new products you're planning to add as a part 2. So sir, just wanted to know these new products are into the CBF side? And can you highlight these new products? And when we add these new products, will there be an increase in capacity or it will be the same capacity only of 13,000 tonnes?
Sorry, you mean we're adding new products in Phase 2?
No, sir. Part 2, you've mentioned it. So I believe these new products you are adding into the CBF only, right, into the Clear Brine Fluids?
Yes. So those products are not CBFs or PTAs. They're other specialty products of Bromine. So there's a CBF category and then there's a PTA synthesis catalyst category. So apart from that, there are other products that we are adding as well that we already have the permissions for. So I think those are bromo-related derivatives. The trials and tests have been done with customers. So those also will start when we start ramping up.
Sir, I was asking on to this bromo-related derivative. So this construction has been started? And what is the timeline we are looking for, for this expansion?
Construction is already finished. It's part of the plant that we've already commissioned in March. So there's no new additional construction for these products.
Okay, okay. And sir, excluding the flame retardants, so I believe earlier you had stated that the bromine consumption would be around 12,000 to 15,000 tonnes. Now for ex of flame retardants, sir, what is the guidance for internal consumption of Bromine?
I think as we move forward through the year or the next couple of quarters, as we ramp up the derivatives business, I think it will become clearer. But we would think that it should probably be a little bit less than what you have mentioned.
Got it. Sir, just one last question. Sir, on to the Oren Hydrocarbon, so we are investing INR 40 crores for this refurbishment. What sort of revenue we are targeting for FY '25 and '26?
So I think just to be clear, we're not investing INR 40 crores at one time. That's for all the plants refurbishment. So we're only taking up 2 right now. So it will be considerably less. And having said that, I think we are still hoping to reach the INR 200-plus crores mark on the sales. And I think that's what we're endeavoring to. But given, like I said earlier in the call, that we're only starting with 2 plants, right, the revenue obviously will be dependent upon that. As I said, given all that's going on in the chemical industry, we are just being conservative and taking away the measured approach.
Sir, just one last question. Sir, generally, on to the export side, we do the contract on FOB basis or in CIM basis?
Salt is a combination. Bromine is all CIS, in fact, insurance included.
The next question is from the line of Dipak Saha from DR Choksey Finnserv Private Limited.
Sir, my first question is, in one of the previous calls, you alluded to the fact on Bromine derivatives, we have engaged with 50, 60 clients. And out of those, 10 have already approved. So two parts. Now those 10 who have already approved, how many of them are part of the existing client set? And on the remaining 20, 30, I think, you have said in the previous con call that the response is favorable. So what is the progress on that remaining 20, 30, where you've got good response overall? So these are the 2 parts from the first question.
Thank you for the questions. I think majority of the customers will be new. There's only a few that will overlap, because these are all, I think, companies that deal in different specialty chemicals sector. So I think the customer base is not necessarily the same largely. And second part of your question on the other customers that we have approached, I think that is a work in progress. I think everyone is just, well, including us, we want to start doing the first deliveries to some of these customers, and then I think the traction picks up. Then we have a better leverage with marketing the products. So the dialogue remains active. And we want to start from deliveries, then I think they'll start converting into orders.
Okay, sir. Got it. Sir, on the Oren part, I think in your previous call, you said around INR 250-odd crores you can attain. The range was INR 100 crores to INR 250 crores. And right now, you are saying, INR 200-plus crores. So how should we read it? It's like you're a little bit getting conservative with the number, and that INR 250 crores might be out of the park right now and next year that we should target? Like if you can share some color on this?
So those who have been investors or shareholders with us for a long time, I think, know that we are quite conservative in terms of the market and what we convey. So in that context, I think the last time when I did speak, the number was taking into account that we would have had an earlier start-up of the plant. But as you know, the NCLT order only has come now mid-July. And legally speaking, right from, what you call, activating the company and ROC, getting power connections, et cetera, are all only possible post NCLT order. So the start-up is delayed on account of receiving the NCLT order. So accordingly, I think we got pushed back a bit. And in that context, I have said INR 200 crores.
Okay, sir. And on the margin front, if you see, sequential basis, there are certain considerable improvements. So what are the driving factors on the EBITDA margin front? And going ahead, do we see improving ourselves here on compared to where we delivered on Q1?
I think EBITDA margin improvement is an aim of ours. We consistently and constantly keep an eye on costs, for sure, ensuring that, that stays within whatever we have planned for. And the second one is other improvements in efficiencies, et cetera. So I think things like turnaround times, downtime management, plant efficiency management, raw material consumption management, I think all those play a factor.
But an important part also in the last quarter, I think, has been power. As I indicated in my earlier calls, we are trying to move away from the cogeneration plant to a grid system. So half the capacity now comes from the grid. That savings is what you're seeing also helped improve the EBITDA margin, and subsequent quarters, you'll see a better improvement as we further enhance the grid capacity and take most of the power from the grid, which is cheaper than the cogeneration plant. Plus, very importantly, also helps with the carbon footprint, because we move away from the coal cogen.
The next question is from the line of Vinay Nadkarni from Hathway Investments.
Just one question I had, which was regarding the leasehold. I have not followed your last 2 quarter con calls, but the leasehold land that you had with the Government of Gujarat, has that been renewed? And if yes, for how many years?
Thanks for the question. So I think that's a work in progress. The position has not changed since the last call. I think we continue to actively engage with the government, and we are hoping sooner than later on that front.
The next question is from the line of Vaibhav Saboo from Nippon AIS.
Just one thing. Sir, you have mentioned that the reason for decline which we saw in the end use was primarily on account of logistical issues. But just want to check that our exports business would be, I think, primarily impacted by that. But if I look at the revenue mix, we still continue to have around 72%, which you mentioned, exports, and 28% domestic, which does show that there was pressure on our domestic side of the business also. So any comments on that?
I will answer the question assuming that I've understood it correctly, sir. So if I'm not answering it, please feel free to ask the question again. So I think the slippage in the volume on the Salt has come because of the shift we had to abruptly do from Jakhau port to Mundra port because of the weather change. And hence, the volume came below what we had planned for the quarter. But overall for the year, we're still aiming to do what we set out to do. And on the revenue mix, the salt is all 100% exported. Bromine has a domestic and export mix. So there's a slight dip in the export percentage because the salt volume has dropped a bit.
No. So that's the point, that exports percentage, if I look at it, like exports as a percentage of revenue, that has remained constant mode compared to the previous quarters. In fact, if I look at it, in quarter 4, 69% of our revenue was from exports. And this quarter, it is 72% from exports.
Okay. So that's because the Bromine exports have increased. In May and June, there's a larger volume of Bromine exports. In February, March, there was minimal, in fact, negligible.
But sir, just want to clarify, if I look at it, in Q1 of last year, we had done around INR 113 crores of sales in domestic and INR 92 crores in the last quarter. So this quarter if I look at your numbers, this comes out to around INR 60 crores for domestic sales across the segment. So that's why I wanted to understand if we are having any pressure?
No, there's no pressure. I think it's primarily to do with maybe the value has dropped on the Bromine pricing. So if you are comparing quarter-to-quarter last year to this year, that will be quite a significant change.
Ladies and gentlemen, due to time constraints, we have reached the end of the question-and-answer session. I would now like to hand the conference over to Mr. Ranjit Pendurthi for closing comments.
Thank you, everyone, for joining us in this earnings call today. We appreciate your time and showing interest in our company. And we continue to remain encouraged by all the feedback we receive. And we will continue to work hard for all our shareholders as we go forward. In case of any queries, please do get in touch with us, or SGA, our Investor Relations adviser. And we look forward to meeting all of you very soon. Thank you.
Thank you. On behalf of Archean Chemicals Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.