AETHER INDUSTRIES Q2 CONCALL: TARGETS ₹300–400 CR SEMICONDUCTOR REVENUE BY FY29, $100 MILLION+ BAKER HUGHES BUSINESS; GUIDES FOR 30%+ EBITDA MARGINS, ₹350–370 CR FY27 CAPEX & 14 OF 16 MAGNUM BLOCKS UNDER CONSIDERATION

• EBITDA Margin Guidance: Management reiterated its approximately 30% EBITDA margin benchmark and indicated that margins could exceed 30% as the contribution from CRAMS and CEM increases. • Margin Expansion Outlook: Management expects higher-value contracts, increasing capacity utilization and operating leverage to support EBITDA margin improvement over the coming quarters and years. • FY27 Capex Guidance: Management expects capital expenditure of approximately ₹350–370 Cr during FY27, covering the Magnum manufacturing facility and R&D infrastructure expansion. • Magnum Expansion Outlook: Management indicated that construction and equipment installation at the Magnum site are progressing on schedule, with several activities ahead of the original timeline. • Magnum Capacity Allocation: Management has visibility on potential utilization of 14 out of the planned 16 production blocks, subject to successful completion of customer negotiations. • Magnum Business Mix: Two production blocks are earmarked for Large Scale Manufacturing (LSM), while the remaining 12 are primarily intended for Contract Exclusive Manufacturing (CEM). • Magnum Commercialization Timeline: Management expects the 12 CEM blocks to commercialize progressively over the next 2–3 years. • Magnum Expansion Strategy: Management is accelerating construction and preparing manufacturing infrastructure in anticipation of potential long-term contracts with global chemical companies. • Future Capacity Expansion: Management has begun considering development of adjacent land for additional manufacturing capacity if the existing Magnum pipeline converts successfully. • Magnum Construction Progress: More than six production blocks are already structurally above ground or approaching completion, with additional facilities under development. • FY27 Capitalization Outlook: Management expects approximately ₹400 Cr of existing capital work in progress to be capitalized by FY27-end. • Capital Work in Progress: CWIP stood at approximately ₹700 Cr, predominantly associated with the Magnum facility. • CRAMS Project Pipeline: Company is currently working on more than 65 CRAMS projects across its R&D and pilot plant facilities. • CRAMS Growth Outlook: Management expects strong demand for complex chemistry development and contract research from global specialty chemical companies. • R&D Operating Hours: Company is transitioning its research operations from a six-day to a seven-day, round-the-clock schedule to improve project turnaround and execution speed. • New CRAMS Customers: Company commenced new engagements with an automotive ancillary major, a global mining company and an additional oil and gas major. • CRAMS Customer Expansion: Management is expanding engagements with small and mid-sized European specialty chemical companies seeking long-term manufacturing partners. • New Customer Additions: Company added 16 customers during H1 FY27. • Customer Qualification: Management reported completion of more than 20 customer and certification audits during H1. • New Contract Announcements: Management expects several ongoing contract negotiations to conclude during the remaining months of FY27, subject to commercial finalization. • CRAMS-to-CEM Conversion: Management is focusing on converting complex R&D projects into long-term exclusive manufacturing agreements. • CRAMS & CEM Revenue Mix: Combined contribution from CRAMS and CEM has increased to more than 65% of total sales. • Baker Hughes Business Target: Management aims to scale business with Baker Hughes to more than $100 million annually over the longer term, without specifying a firm achievement date. • Baker Hughes Existing Opportunity: Management indicated that the original pour-point depressant product portfolio represented an approximately ₹400 Cr opportunity. • Baker Hughes New Products: Company commercialized another set of oilfield chemicals for Baker Hughes and completed initial commercial shipments during Q2 FY27. • Baker Hughes Expanded Opportunity: Management estimated approximately ₹400 Cr of additional potential from the newly introduced products, taking the identified near-term opportunity to ₹750–800 Cr. • Baker Hughes Long-Term Opportunity: Management estimates that the broader market for the newly introduced product category could be approximately $2–2.5 billion. • Baker Hughes Production Location: Existing and newly commercialized products are manufactured at Site 4, Strata, rather than the Magnum facility. • Baker Hughes Incremental Capex: Management indicated that the new product portfolio can be manufactured using existing Strata infrastructure with relatively minor modifications. • Baker Hughes Supply Chain Shift: Management indicated that some products previously sourced through Singapore are being manufactured in India for the first time. • Baker Hughes Revenue Outlook: Management expects higher volumes as the expanded product portfolio is supplied to Baker Hughes customers globally. • Baker Hughes Capital Efficiency: Management indicated that mature asset turnover at the Strata facility could reach approximately 3–3.5 times. • Oil & Gas Business Outlook: Management expects continued growth from oilfield chemicals, supported by global energy security investments and rising oil and gas exploration activity. • Oil & Gas Revenue Contribution: Oil and gas currently accounts for approximately 33% of total revenue. • Oil & Gas Margin Outlook: Management indicated that CEM-led oil and gas business margins are broadly in line with overall company margins. • New Oil & Gas Contract: Management is discussing the allocation of an entire Magnum production block to another global oil and gas company, with a possible announcement in the coming months. • Additional Oil & Gas Capacity: The prospective customer has also sought a right of first refusal over an adjacent production block for future expansion. • Semiconductor Commercialization: Company commenced its first commercial shipments of semiconductor-related specialty chemicals during Q2 FY27 from existing production facilities. • Semiconductor Volume Growth: Management indicated that initial shipment volumes remain modest but are increasing month on month. • Semiconductor Plant Commissioning: A dedicated production block at the Magnum facility is targeted to begin commercial production during Q4 FY27. • Semiconductor Revenue Target: Management indicated potential annual revenue of approximately ₹300–400 Cr from semiconductor-related products at maturity. • Semiconductor Revenue Timeline: Management expects the semiconductor business to approach its targeted scale over approximately 2–2.5 years, broadly around FY29. • Semiconductor Volume Target: Management separately indicated a target of approximately 300–400 tonnes of annual sales across semiconductor-related molecules by FY29. • Semiconductor Product Pricing: Management indicated average market prices of approximately $45–50 per kg for the relevant molecules. • Semiconductor Product Applications: Company's specialty chemicals are used in high-performance printed circuit boards, copper-clad laminates, glass-fiber coupling agents and low-dielectric formulations. • Semiconductor Technology Opportunity: Management expects demand from advanced electronic materials, high-speed circuit boards, 5G infrastructure and next-generation chipsets. • Semiconductor Customer Qualification: Management indicated that existing customer approvals should enable a relatively smooth transfer of production to the new Magnum block. • Semiconductor Product Strategy: Company is supplying specialty chemical building blocks rather than finished semiconductor fabrication chemicals. • New Agrochemical CEM Contract: Company signed an exclusive manufacturing agreement with a leading global agrochemical innovator for a patented new chemical entity. • Agrochemical Contract Commercialization: Production is expected to commence at Magnum's fourth production block during Q4 FY27, with initial supplies targeted around January–February 2027. • Agrochemical Initial Volume Guidance: Management indicated an initial annual production plan of approximately 200–250 tonnes. • Agrochemical Scale-Up Target: Management expects volumes to increase toward approximately 600 tonnes annually over time, with potential for further expansion. • Agrochemical Initial Shipments: During Q&A, management indicated that initial supplies could begin at approximately 50 tonnes before ramping up. • Agrochemical Product Profile: The product is an advanced intermediate for a patented agrochemical molecule introduced within approximately the last two years. • Agrochemical Market Potential: Management indicated that the innovator expects the underlying molecule to have blockbuster potential, although no revenue guidance was disclosed. • Agrochemical Customer Qualification: Company completed approximately 12–16 months of development and customer qualification before finalizing the manufacturing agreement. • Agrochemical Growth Outlook: Management expects additional exclusive manufacturing opportunities from global agrochemical innovators despite current sector challenges. • European Material Science Contract: Company plans to expand an existing European customer's product portfolio from one or two products to approximately five or six products. • European Contract Capacity: Management indicated that a proposed 1,000 TPA Magnum production block would be used for the expanded material science portfolio. • European Strategic Collaboration: Management is discussing the allocation of two additional production blocks for a flagship product from the same European multinational. • Additional European Capacity: The customer has also requested a right of first refusal over another two production blocks. • European Customer Opportunity: Under a best-case scenario, the European partner could eventually utilize or reserve up to five of Magnum's 16 production blocks. • Material Science Expansion: Management sees strong long-term growth opportunities in advanced polymers, performance materials and specialty chemical products. • Additional Material Science Project: Management also highlighted discussions involving a manufacturing opportunity of approximately 1,000 tonnes annually with a single customer. • Dow Silicon Research Programme: Company continues its multi-year collaboration with Dow to develop advanced silicon manufacturing technology in India. • Dow Project Progress: Management indicated that technical work has advanced since the July 2026 announcement, with both companies working on process and engineering development. • Dow Pilot Plant: The immediate objective is to design, construct and operate a pilot unit to validate the technology before considering a commercial-scale manufacturing facility. • Dow Commercial Scale: Management indicated that successful technology development could support a future plant with capacity extending into multiple tens of thousands of tonnes annually. • Dow Commercialization Timeline: Management did not provide a firm commissioning date or revenue guidance, emphasizing that the project remains a multi-year research programme. • Dow Technology Development: The collaboration involves complex continuous-flow chemical engineering under extreme temperature and pressure conditions. • LSM Product Pipeline: Company has approximately 12–15 LSM projects under research and development. • LSM Product Launch Guidance: Management intends to launch around two LSM products annually, subject to capacity allocation and the priority given to CEM opportunities. • LSM Growth Outlook: Management expects the LSM business to grow in absolute terms, although CEM is expected to expand at a faster pace. • LSM Capacity Strategy: Company expects to use both existing manufacturing sites and selected Magnum blocks for future LSM product launches. • Pharma LSM Ramp-Up: Management indicated that two pharmaceutical intermediate blocks at Magnum have commenced operations and are undergoing a gradual production ramp-up. • Pharma & Agrochemical Outlook: Management expects continued growth in these sectors, but at a slower pace than oil and gas and material science. • Revenue Diversification Strategy: Management indicated a long-term aspiration for a more balanced revenue mix across oil and gas, material science, pharmaceuticals, agrochemicals and other applications. • Project Selection Strategy: Management is prioritizing technically complex and commercially viable projects offering long-term customer relationships, attractive cash flows and business stickiness. • R&D Organization: Management highlighted 12 experienced research and chemical engineering group leaders supporting multiple projects and reducing reliance on individual scientists. • Working Capital Position: Management indicated working capital days of approximately 165, around three days higher than March 2026. • Working Capital Outlook: Management expects working capital efficiency to improve progressively as newly commissioned manufacturing facilities ramp up. • Inventory Position: An analyst cited inventory days increasing to approximately 172 from 151 in March 2026, with management attributing the rise mainly to new project-related raw material and work-in-progress inventories. • Inventory Build-Up: Company has increased raw material inventories for the Milliken contract and new Magnum production blocks to protect supply continuity. • Raw Material Supply Security: Management highlighted longer import lead times for certain critical materials, including inputs sourced from the US and Far East. • Raw Material Cost Protection: Management indicated that relevant CEM arrangements allow increases in raw material costs to be passed through to customers. • Inventory Normalization: Management expects inventories to decline as production and commercial shipments from new projects increase. • Borrowings: Management referred to approximately ₹200 Cr of loans on which interest capitalization is taking place, without disclosing the weighted average borrowing rate. • Financial Disclosure: The call focused primarily on project execution and expansion; it did not provide a complete set of Q2 revenue, EBITDA and PAT figures in the spoken discussion. • Key Challenges: Timely commercialization of Magnum blocks, conversion of prospective contracts, semiconductor scale-up, customer concentration in major CEM relationships, higher working capital requirements and execution of complex technology development programmes remain important factors.

AETHER INDUSTRIES LIMITED

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