Galaxy Surfactants

Galaxy Surfactants Q3 Highlights -

RM, Freight costs decline significantly aiding margins. Fatty Alcohols down almost 45 pc

Macro headwinds continue in Gulf, Turkey, Africa but a sequential volume recovery points to some recovery. Another stable Qtr will establish the trend

Pricing, Product Mix, forex gain led to EBITDA/Ton shooting beyond guided range

Demand in developed mkts still slack. Demand from India is good

Q3 numbers -
Sales - 1084 vs 931 cr, up 16 pc
EBITDA - 158 vs 78 cr, up 102 pc
PAT - 106 vs 46 cr, up 133 pc

9M FY 23 numbers -

Sales - 3474 vs 2644 cr, up 31 pc
EBITDA - 437 vs 267 cr, up 63 pc
PAT - 291 vs 164 cr, up 77 pc

Q3 volumes almost flat due de growth in Developed and ME,Africa, Turkey mkts countered by good growth in India

Product wise sales breakdown -

Performance surfactants- 683 vs 570 cr
Speciality Care products- 401 vs 361 cr

Company is a India’s largest manufacturer of Oleochemical based surfactants and speciality products for home and personal care Industry selling over 205 product types

Fully vertically integrated

07 manufacturing facilities ( 5 in India, 1 each in US, Egypt ), 01 R&D center

Preferred supplier to leading MNCs across the world and local FMCG brands

Industries served - Oral care, Hair care, Cosmetics, Skin care, Toiletries, Home care

Last 6 yrs -

Sales CAGR at 13 pc
EBITDA CAGR at 10 pc
PAT CAGR at 17 pc
Volume CAGR at 7 pc

ROCE, ROE- continiously above 20 pc ( except FY 22 where they were slightly below 20 pc mark )

Debt to Equity down to 0.2 vs 0.9, 6 yrs back

The trends in volume growth going fwd is the key considering other headwinds seem to be over

China re-opening should aid volumes in Q4

Company booked 20 cr of export benefits to Egypt in Q3. These incentives were for last 36 months. So, the bottomline got additional push

Company hoping for an overall FMCG industry level volume growths coming back in FY24 after a tough past 02 yrs

Expect some inventory correction in US in Q4. In other markets - no inventory corrections are expected

Some more impact of reduced RM prices will be seen in Q4

Guiding for aprox 150 cr / annum capex for next 2-3 yrs - combo of maint and growth capex

Currently India sales at aprox 30-33 pc of total sales. Rest are exports

Current capacity utilisation at around 67 pc

Disc: invested, biased