Gandhar Oil Refinery (India) Limited — Q1 FY26 earnings call

The company continues focusing on the personal care, health care, performance oil products. Obviously, the metrics still remain the same. And obviously, that is how we like to continue and focus on our customers and improve the relationship with our customers and grow with these customers accordingly.

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Okay. And sir, how do we look at the overall revenue growth for this year? How much of this will be driven by volume? What sort of volume growth are we targeting for this year and remaining how much will be coming from price?

And sir, in terms of export, export performance has been really good. We've seen 51% increase in revenue. How do you see the contribution for exports for the entire year? Which geographies will we be targeting for this year?

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See, the company continues to export to 100+ countries across globally. The company continues to maintain a very strong relationship with its overseas customers. Having said that, Gandhar Oil Refinery (India) Limited July 23, 2026 Page 6 of 16 the company have focused more on export and overseas sales as well. We anticipate the export revenue and the export sales will be in the same level for the quarters to come.

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In terms of our -- so growth driven by segment, which segments do you see contributing the highest for this year, any segmental mix that we expect to change significantly? Or we will be maintaining the similar mix that we had this quarter?

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The star performing segment was still being -- the PHPO, which is the personal care, health care performance oil division, second by the process and insulating oil division. So, these are the two segments where we anticipate the growth will be similar. The trend will continue to be similar for the next quarters as well.

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Okay, that is very good to hear. Congratulations and all the best.

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The next question come from the line of Dhaval Shah from Girik Capital.

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Thank you so much for the opportunity So just taking -- elaborating more on the first question you answered, so if you can help us understand what sort of scenario has happened in terms of price increase, basically of spread increase? And was it driven by some -- I mean supply getting stuck from Middle East impacting the demand/supply of your products versus the movement in the raw material, the base oil prices? Can you just help us understand a bit more for us to take a view that these margins could extend maybe 1, 2 quarters more? And b, the kind of cash flows which are going to generate out of this, though it's too early, but if you would like to answer anything on that? But first part of the question, if you can just help me understand more on it.

See, as you are well aware about the Middle East war, obviously, most of our supply is primarily coming from Saudi Arabia and South Korea. Now because of the geopolitical situation, the Hormuz closure, obviously, the slight change in our sourcing strategy. We've continued buying from them, although since we have some contracts, we get shipments from Saudi Aramco. But obviously, the shipments are a little bit delayed because of the Hormuz closure. But apart from that, we have started -- we've changed our sourcing strategy, buying more from domestic base oil producers as well. So that helped us in navigating the situation. And we could get our key raw material, which is base oil from our suppliers. That is why because of our sourcing strategy, we could sell it with an expanded margin or expanded revenue to our customers.

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So, the raw material, the supply which is not coming from Middle East, you were able to compensate by buying from the -- from South Korea and those sites? Gandhar Oil Refinery (India) Limited July 23, 2026 Page 7 of 16

See, obviously, I'm not told that raw material is not coming in from -- raw materials were coming from Saudi Arabia, but I mean, obviously, not to the levels that we anticipated or that we had planned on. So, to compensate or to take care of our requirement, we had to source it from South Korea or from other Indian producers at a different price level, of course.

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Okay Okay, got it sir. Thank you.

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The next questions come from the line of Vinit Thakur from Plus91 Asset Management.

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Congratulations for this amazing exceptional quarter results. Sir, I had a couple of questions. Sir, we have seen a volume degrowth Q-o-Q. But year-on-year, there's a volume increase. But if you could help me understand, there is a year-on decrease on volume growth for PIO and channel partners as well.

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Okay. So there has not been a degrowth in the PIO category. That's what I had given in my statement.

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Okay, sir. And sir, sir, could you just comment on the realization? I know you have done it, but there has been almost quite at least 70% to 80% incremental realization for each of the segment Y-o-Y. So, do you feel like this would be a sustainable realization going forward or would revert back to the Q4 realization for the Q1 of FY26?

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See, I just discussed during the first question asked by Sapphire Capital, I think the answer stage is similar. Obviously, this has been an exceptionally good quarter. We continue focusing on expanding our revenues, our relations with our customers and focusing on our key categories across the product portfolio.

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Sir, what would the margin expansion attributable to them? It's a combination of all the things, but what would be the sustainable force going forward to maintain these margins? That would be my question.

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Obviously, the company would do its endeavour or it’s best to ensure to sustain this margin to be very precise. But obviously, this has been historically a good quarter because of agile sourcing and optimum utilization of the inventories that we had. So obviously, this has been a historical good quarter. But obviously, we anticipate the margins would be continued to be at a stellar levels for at least the next 1 or 2 quarters to come.

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Okay. So, we would not be reverting back to the previous margins for at least for a couple of quarters? Gandhar Oil Refinery (India) Limited July 23, 2026 Page 8 of 16

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Not immediately.

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Thank you sir. And sir, just last, the gross -- so what was the gross margin for this year in percentage-wise?

Yes, yes, for the quarter.

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It was 21.4%.

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The next questions come from the line of Nayan Gala from Ertica Wealth.

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Congratulations on a record quarter. I had a couple of questions. Just taking the cue from the previous participant on the margin front, I just wanted to understand that during the quarter, was the inventory positioning due to crude price volatility favourable or the margins had -- the product mix had a chance on the margin improvement?

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So, it was a combination of both the things. Obviously, with the elevated oil pricing, with the situation across the Middle East, the Hormuz closure, there had been constraint in getting the raw material. But obviously, with advanced planning of buying of the raw materials well on time and the strategy that we had for optimum utilization of that inventory has paid off this quarter.

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Okay. Okay. Understood. And sir, you mentioned about the strong engagement with customers. Could you share whether this quarter's growth was broad-based across customer base or it was largely driven by a few large customers?

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As you know, I mean, we have been export -- I mean, we have a customer base of more than 4,000+ customers. So obviously, the business has been skewed across the value chain.

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Okay. So, if you can just help us understand how much of the revenue is coming from maybe the top 5 customers?

That data is actually...

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Okay. Understood. Understood. Sir, just wanted to understand on the South Africa entry. If you can just elaborate on that? And would this be through distribution, local partners or setting up our own infrastructure? And what is the expected timeline around the operational of South Africa business? Gandhar Oil Refinery (India) Limited July 23, 2026 Page 9 of 16

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The strategy for the South African arm is being worked out. There will be much more clarity being emerging in the next 1 or 2-odd quarters. It will be a little premature for me to give you more details on next specific plan.

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Thank you sir and congratulations.

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The next questions come from the line of Darshan Garg from Tiger Assets.

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So, I wanted to understand what is the average realization difference between domestic and export market?

Thank you.

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The next question comes from the line of Anirudh Sharma from Ekant Investments.

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So, my first question is that you mentioned that PHPO continued to be the key growth driver during the quarter. Could you share whether this was largely volume-led or customer additions or better realizations? Also, are you seeing stronger demand from pharma or personal care customers?

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Can you repeat your first question, please?

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So, my question was you mentioned that PHPO continues to be the key growth driver during the quarter. Could you share whether this was largely volume-led or customer additions or better realizations? Also, are you seeing stronger demand from pharma or personal care customers?

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It was a combination of volume and expanded revenue base from our existing customers. There has been addition, obviously, as a part of day-to-day routine and that. I mean, obviously, customer addition, new customer development is all an ongoing progress. So that will continue to happen even in the future quarters.

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Okay. And my second question was export contribution has increased quite significantly this quarter. Should we expect exports to remain around the 50% mark going forward? Or was this elevated due to certain temporary opportunities?

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There has been certain opportunities on table, which obviously we took it, and that's why we have been -- the company could deliver this kind of stellar results this time. But we anticipate the company has -- obviously, if you look -- even look at the historical past, the company has a significant amount of exports. And obviously, the endeavour is to increase the export metrics as well in the year ahead as well.

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Thank you sir, that’s it from my side.

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The next questions come from the line of Aryan Vijan from RV Investments. Gandhar Oil Refinery (India) Limited July 23, 2026 Page 10 of 16

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Sir, my first question is regarding the borrowings. As we can see, there has been increase in borrowings. So, can we expect any decrease in the borrowings?

Okay, sir. And any revenue potential from the new expanded geographies, just like you have said from Indonesia, Europe, U.S.A. and South Africa entry? So, any revenue potential from that?

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It's too early for me to give us a revenue projection, but obviously, we'll share once there is much more clarity emerging in the quarter ahead.

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And sir, we can see there's been an increase in the trade payables from INR315 crores to INR430 crores. So, can we see any decrease in this?

Okay Sir. Thank you.

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The next questions come from the line of Mohammed Farooq from Pearl Capital.

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Good morning. And congratulations on the new cash number. My first question is, in a couple of previous questions, you mentioned that the top line is mainly because of significant increase in exports. Could you please give us more detail on that?

You are not audible properly. There's...

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So first of all, congratulations for the good set of numbers. And you mentioned that the top line increased mainly due to the increase in exports. Could you please give more light on this? What was the reason for increase in export? And do you see that in the second quarter also happening?

Do you see that in the coming quarter also, this quarter, increase?

Okay. So second, you also mentioned that the annual growth will be same as 9% like before. But if you look at the previous year first quarter results, most of the time you have almost flat growth. But this year, you have a 90% plus growth in the first quarter. So, if you say annual growth is still 9%, then do you see that there is a degrowth in the next quarter?

Okay. Fine. Perfect. So, value terms, there will be a better growth overall?

Yes. So, the last question is the profit increased more than five folds INR206 crores. Can we confirm all the operating costs, employee costs and inventory adjustment, everything is fully accounted for in this quarter? There's -- nothing will be...

Yes, because the profit growth is 5x. So, if something comes to the next year, even the next quarter, it will be negative. So that's it, thank you.

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The next questions come from the line of Sarvesh Gupta from Maximal Capital.

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Congratulations on a very good set of numbers. Sir, so this 28,000-odd spread that you have been able to garner in this quarter is…

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Sorry to interrupt Mr. Sarvesh, your voice is not clear. Mr. Sarvesh was disconnected. The next questions come from the line of Prisha Shah from Shah Family Office.

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So, I just have a couple of questions. So, this quarter, you have declared a 100% interim dividend. So, while talking about the future capacity expansion, how should we think about your capital allocation priorities between dividend declaration...

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Okay. Understood, sir. Sir, you also mentioned that qualifying a new customer, typically, it would take around 4 to 5 years. So, could you please talk about your current qualification Gandhar Oil Refinery (India) Limited July 23, 2026 Page 12 of 16 pipeline? Are there any large global customers that are in the final stages of approvals and possibly could start contributing in next, say, 12 to 18 months?

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See, there is a certain NDA signed with new customers as well domestically and on international front. So obviously, it will be difficult for me to name out the customers with whom the product approvals are ongoing or the planned visits are ongoing. But obviously, having said that, we continue developing new relations with new customers and also focus on expanding our reach with existing customers.

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Okay. So, I have something on the industry side as well. So, we have been seeing increasing interest from all the global players in the specialty oils market. So how do you see the industry evolving in next 3 to 5 years period? And where do you think Gandhar is best positioned to strengthen its competitive advantage in this evolving industry?

See, if you look at the CRISIL report, which we did 1.5 years back, the industry is supposed to grow at more than 5% CAGR globally. Obviously, with the balance sheet size that we have, with our sourcing abilities, with our supplier customer relationships, we anticipate we are in a very strong footing position to take care of the future growth. And obviously, we will endeavour to ensure the growth is sustained for the future as well.

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Okay. Sir, understood. So, after such a strong start to this particular year, how are you thinking about the rest of FY27? Do you believe that this momentum can continue going forward? And what would be the key drivers that would give you confidence for upcoming quarters?

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See, the endeavour is to focus on growth, create new customer relationship, create value chain to ensure uninterrupted supply of key raw material during such geopolitical crisis. So, with all this in place, we are quite optimistic about how the future lies ahead for Gandhar and our valued shareholders as well.

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Sir, just one last question. So, going forward, how do you see the product mix to evolve? Are there any specific segments where you intend to increase the contribution because you might be seeing better growth or profitability in those particular segments?

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See, the company continues focusing on the PHPO category. But having said that, the process and insulating oil category also has done a fantastic growth in the previous quarter. Thanks to the increasing requirement of electricity, not only in India, but globally; we anticipate even our transformer oil that is the PIO category to have a strong and robust growth for the future and the quarters to come.

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Thank you so much sir. And once again congratulation on the numbers.

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The next questions come from the line of Sanjay from Sanghai Family Office. Gandhar Oil Refinery (India) Limited July 23, 2026 Page 13 of 16

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Congrats on a good set of numbers. Sir, like in the PPT, we can see that we have happened some significant expansion in our gross manufacturing margins, like which has shooted up from 8,300-odd from last quarter to this quarter 28,000. So, can you justify like what kind of outlook can we expect going forward? Like is it because of the supply chain disruptions? Or is it because of some significant uptick in the demand scenario? And how long can it be justifiable in going forward?

Okay. So, can we expect this kind of 28,000 mark we can expect also in the coming quarters as well?

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It will be difficult for us to give you a forward-looking statement or -- at this point. But obviously, the company will continue focusing on how to further strengthen its profitability and increase its revenue.

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Got it. And sir, what are our capex plans like going forward? Like I think we have a capacity of roughly 597,000-odd kilolitres of capacity, right? If you can kindly help us in getting like segment-wise like a capacity for these things, if possible, like from the PHPO segment, PIO and lubricant segment?

Sir, what has been the current utilization for this quarter?

97%. So, sir, as we mentioned in the earlier commentary, like the industry is expected to grow at 8% to 10% kind of growth. So, sir, if we are talking at 97% kind of utilization and if we don't have anything on our board as of now, so do you think like from the volume front, we will be able to get the market share?

Okay got it. And sir, for our existing capacity, is it possible -- like suppose today, we are witnessing some significant demand from the PHPO segment. Suppose tomorrow, some significant demand comes from lubricant as well. So, can we change the mix on our existing capacity and shift the gear to that of lubricant segment or if possible, from our product?

Okay. And sir, what is the basic raw material for us?

Basic raw material for us, sir?

Base oil got it. And in the white oil front, sir, we have exported significantly in this quarter. If you can kindly guide us like who are the global peers or Indian peers with whom we are competing in the white oil segment?

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So obviously, there are listed peers operating in this category, but we continue focusing on development with our customers and enhancing value chain with our existing customers and grow with new customers.

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Okay. So, who would be the next peer to us, sir? With whom we are like competing?

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Listed peers within the country. And obviously, there are some global peers as well.

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So, if you can help us in naming some global peers, sir, it will be easy for us for...

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So, there are companies like ExxonMobil or Calumet in the U.S., for example, which are global.

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The next questions come from the line of Disha from Sapphire Capital.

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So, sir, we mentioned that this 16% EBITDA margins, we expect them to sustain over the next 2, 3 quarters given the exceptional market conditions. But sir, going ahead, say, FY28, FY29, what will be our new sustained EBITDA margin run rate, given our increased export mix and value-added products? Because historically, if I remove just this quarter and this year, we've been around in the margin range of 5% to 8%. So, what will be our revised sustainable run rate for the margins going ahead?

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It will be difficult for us to give you a futuristic statement. But obviously, we at Gandhar continue to focus on expansion of our margins, of our revenue and also enhancing our product category -- product mix across the category.

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Okay. And sir, what would be the tax rate that we should model for this year and for the next year?

The tax rate?

So, on a blended basis, it will be around 23%, 24%? Gandhar Oil Refinery (India) Limited July 23, 2026 Page 15 of 16

The next question comes from the line of Sarvesh Gupta from Maximal Capital.

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Sir, one question was that like earlier, we had heard about some increase in the price in transformer oil, etcetera. So, between PHPO, lubricants and PIO can you sort of have that fungibility of selling the product, which has more prices or because of your long-tenure contracts, you are anyways going to be supplying in the same ratio because you have contracts with your long-term customers?

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With a combination of the product mix that we have, we continue focusing on the personal care, health care category wherein the margins are quite strong in that specific category. And with the reports, the independent research reports that we have, the category continues to grow even for -- in the more than 5% CAGR in the next 5 years. So obviously, the company will continue to focus on specifically PHPO product and obviously, the process and insulating oil category.

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Okay. And in this quarter, the higher spread basis, the understanding that I got was primarily because of higher prices at which you were able to sell the end product. So, was there a price increase across all 3 segments? And from the customer point of view also like the FMCG players and all, now they would be mindful about the price increase in their raw material, right, which you are selling to them. So, what has been there stands to this price increase, etcetera? And has it been across all 3 segments? Or is it being primarily in 1 segment?

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So, the price increase has been across the segment, except a bit for the lubric -- automotive lubricant category, where it is more of a dealer distributor network. The price increase has been taken even in that category but obviously got with a little delayed manner. But having said that, the price increase has been across the category and including the PHPO category.

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And sir, what has been the response from your customer point of view? Because I think they would also have some idea about your costs including the cost of the raw material. So how are they talking about to you about this spread increase which has happened and how they want to tackle this in the coming quarters?

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See, it has been an ever-evolving discussion, obviously, with the customer. The important is time we deliver it to our customers, specifically to the brands that they produce. Having said that, the supply chain has been really disrupted because of the Middle East crisis. So, to ensure that the supply chain keeps running, the availability of the product was key during this specific quarter. So that is how we could justify higher spread with our customers.

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Okay. And because of this war, sometimes because of the fear of the shortage, there is accelerated buying also from the end customers. So, did you see that also in this quarter and the last quarter, Q1 and Q2? And has it largely subsided now? Or what is the status on that? Gandhar Oil Refinery (India) Limited July 23, 2026 Page 16 of 16

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See, we don't see that accelerated buying that had happened during this specific quarter. But having said that, obviously, with the outages, with the disruption in supply chain, obviously, I'm sure there's stocking, there would have been a bit of stocking, but not -- I don't anticipate more than 10% or 15% here and there. So, it would not have been like double or something.

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Understood. Thank you and all the best.

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Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Aslesh Parekh for closing comments.

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Before we conclude, I would like to thank all our shareholders, investors, analysts, customers and our business partners for your continued trust and confidence in the company. This quarter demonstrates the strength of our business model, the resilience of our sourcing strategy and our ability to execute effectively in a dynamic operating environment. As we look ahead, we remain focused on disciplined execution, prudent capital allocation and expanding our leadership in high-value specialty oils, which while continuing to create sustainable long-term value for all our stakeholders. Our IR partner is Adfactors, should you have any further questions or require any additional information, please feel free to reach out to them. Thank you once again for joining us today. We appreciate your continued support and look forward to speaking with you again in the next quarter. Have a good day.

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On behalf of Gandhar Oil Refinery (India), that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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