Snapshot of 2nd quarter consol results:
The Company reported a y-o-y growth of 19.4% in revenues during Q2FY23 and improvement in EBITDA margins over the same period. During the last investor call company had given a guidance of margins to be upwards of 20-25%; the same has been achieved.
Sequentially, revenues have declined by 6.4% despite the overall volumes being higher than the previous quarter. The volume expansion of 15.3% in speciality chemicals more than made up for the decline of 5.3% in volumes of amines and amine derivatives over this period. In fact, volumes in Q2FY23 are only 0.5% higher than those seen in Q2FY22 though the revenues are up by 19.4%.
Company’s inventory days have almost doubled during H1. This can impact their costs and will need to be watched for the second half.
During this quarter, the Company commissioned new capacity of 15,000 tonnes of Di-methyl Carbonate, Propylene Carbonate and 15,000 tonnes of Propylene Glycol. Given the H1 sales of close to 1300 crores, the Company is on track to achieve the full year guidance of 2500 crores, especially with the commissioning of new capacity.
Speciality Chem business is not a wholly owned subsidiary; promoters hold direct stake as well. And Balaji Amines is not offering any shares in the IPO. So no immediate benefit from its listing unless the listing multiple is more than what Balaji is getting now.
Disc: Invested.
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