As per Q3FY22 Concall the company has launched 2 new products TBHQ and PBQ in production(mentioned in presentation Q1FY23 as well). HAL’s production is expected from Q2FY23.
There was 4% increase in RM costs in Q1FY23. There could be 2 reasons i.e. product mix or Raw material cost increase. I remember Phenol being 50% of RM costs in Q4FY22 and Phenols price reduced by 7.4% in last 3 months
(source: tijorifinance)
so it must be other 50% of RM used to make other products. So my logical conclusion is product mix might have changed (as mentioned in slide No. 5 Q1FY23) in favour of TBHQ and PBQ, where they will have to offer discounts to increase market share.
Anyway I would like to hear from the Management itself.
CSTL increased MEHQ production by 50% for internal consumption to BHA. Vinati is a major customer for CSTL, and both being a world leader in their sector means both are interdependent. It is fair for Vinati to backward integrate to improve their margins but for CSTL it has to find buyers for their products to maintain their market leadership.
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