Company came out with a very good quarter, they have increased capacity and got new registrations in EU. I have highlighted key developments from their presentation.

FY24Q1

• Have 8 CEP approvals from Europe (added Gliclazide and Azithromycin this quarter)
• Enhanced capacity from 1500 MTPA to 1800 MTPA
• Undertook commercial validation of vildagliptin for domestic market
• Growth was broad based, domestic market grew by 51% and exports by 26%

• New products under development: Dapagliflozin, Empagliflozin, Canagliflozin

Disclosure: Invested (position size here, no transactions in last-30 days)

Clarification from the company…they are saying it ‘lack of accuracy’.

FY24Q1 concall notes

• ATBS (40% of sales; 170 cr.)
  o Destocking from oil & gas customers as they had overstocked earlier (accounts for 30% of ATBS sales). Expect demand to normalize starting October 2023 as end demand has not been impacted
  o 90% decline was due to volume and 10% due to price realizations
  o Expansion from 40k to 60k tons will commercialize in March 2024. Expansion is based on confirmed orders from repeat customers
  o Have not seen competition from any Indian manufacturer (Atvantic Finechem)
• Anti-oxidants and butyl phenols (Veeral additives; 17% of sales):
  o Commercial ramp-up was slower, will do 150 cr. in FY24 and double in FY25
  o Currently operating at 25% utilization
  o Doubly backward integrated with butyl phenol and isobutylene
  o Doing R&D into more niche AOs (higher realization, lower volume)
  o Total revenue potential from butyl phenols and antioxidants will be 900-1000 cr. with 15-20% EBITDA margin (butyl phenol ~300 cr. + AOs ~600 cr.)
• IBB (20% of sales; 86 cr.): Expected to remain steady in FY24. One Indian producer exited market this quarter
• Veeral Organics:
  o 260 cr. capex for MEHQ, Guaiacol, Iso Amylene derivatives and Anisoles. These products were used in polymerization inhibitors, flavors, fragrances, pharmaceuticals, and pesticides
  o Total capacity for Anisole will be 5000 MTPA; for MEHQ and Guaiacol combined capacity will be 3000 MTPA
  o Potential revenues of 350 cr.
  o Plant will be commissioned by March 2024
  o Production by phenol route: from methanol and phenol you make Anisole and from Anisole you make MEHQ and Guaiacol. This is the most cost-effective route currently
  o Other routes to manufacture MEHQ are based on hydroquinone which is a more expensive raw material than Anisole
• Power costs
  o Commissioned 15 MW solar power plant, which is currently catering to 55% of electrical consumption.
  o Adding 11 MW solar plant, to be commissioned by September 2023
• Custom manufacturing revenues: 150-175 cr. in FY24

Disclosure: Not invested (no transactions in last-30 days)

@1Pranav

A lot of valuepickr threads are a good source to follow to catch sectoral plays.

Other is to follow some high quality investors in social media like Twitter etc, check their track record after following them for a while and then take a call.

Other is to try and cultivate rapport with anyone good at this kind of stuff.

I try to catch these themes by looking at charts and then following it up with fundamental research.

@nithin_Shenoy – Just a question on your chemical watchlist. Did you exclude – Archean Chemical after deliberation or it did not came in your criteria only. Asking about this specific name as it has much superior margins compared to Aether and Fairchem.