“Changes in Inventories” is indicative of what you might be looking for. Two products, limited customers, batch deliveries (lumpy business). Volatility is bound to be there. Q-o-q is a terrible way to judge their business.
Real scale in Intermediates comes only when there is product diversification. There’s a limit to where you can scale intermediates individually. Intermediates at an individual level aren’t fast churn because these are critical in manufacturing the API and are therefore stocked for a decent period of time. Because they don’t overload the inventories (value wise) for an API manufacturer (fractional cost). So, criticality + low value warrants stocking.
Gross margins also aren’t all that different. And Ebitda also has to take a hit when you have operated fully but haven’t sold the batches. Your overheads would eat up the margins.
Discl: no reco
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