Notes from Q1FY23 Conf Call
a. 30-40% growth possible in FY23
b. Energy prices hike in Europe may help company to sell more products to Indian and export market
c. HALS plant to start by Dec-22 and as BASF is facing issues and they have increased the prices CSTL may able to take advantage of the same
d. Vinati has only announce for MEHQ addition. Actual production may take time and it will be premature to comment on the same
e. New products are contributing 15% of revenue
f. New products will have lower margin and as they scale it will add to the bottom line
g. They were able to ship the products to China during the Apr-May lockdown as well using the different routes
Observation- FY23 can easily cross 1000Cr revenue if this runrate continues.
@AJain all specialty chemical companies like Tatva Chintan, Aether, CSTL are trading at high PE. One optionality they have is using their R&D they can come with innovative processes and eat the market share. One has to be cautious but at the same time we cannot ignore them as opportunity size can get bigger with new product launches.
Tatva Chintan after IPO was hovering at 80PE and after one year the PE compressed to 50 after FY22 results as the company posted good results in FY22. Now PE has increased due to bad Q1FY23 but as they enter into new segments like Waste Management using the SDAs it will again expand their opportunity size. The electrolyte segment last year was only contributing 1% and in Q1FY23 it has increased to 8% albeit a lower base but point here is segment revenue is increasing.
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