Apcotex Q4FY23 Concall
-Margins were impacted due to lower demand for Nitrile Latex. And Indian Business reverted back to normal
-For the quarter: volumes are flat, most of the revenue generation is due to product mix changes & realisations. Volumes have grown by 8% this year.
-High cost RM has been exhausted. NBR margins have normalised in Q3 & Q4.
-Nitrile Latex market is weak as excess supply in Glove markets. Margins are even lower than pre covid. Post new plant- cost structure will go down. Demand should pick up and go back to Pre covid level.
-In the long term, we are bullish about the business. One of the handful manufacturers who can manufacture this product.
-Apcobuild has done really well. Entered new markets and new spaces. 25%-30% was the YOY growth. Total contribution to sales isn’t much.
-Seeing higher competitive intensity in NBR, very less competitive intensity in Synthetic latex. 2 companies have 80% market share in India. Main place, margins have been impacted is Nitrile Latex.
-Export growth of 28% in volumes for this Quarter, and export growth of 15% in volumes.
-NBR project: detailed engineering we have done and might announce depending upon the markets.
-End markets: paper, carpet, textiles etc are doing well. Only problem has been nitrile latex where demand is slow.
-Hope to get into Full capacity utilisation within 2 years for the incremental capex which can lead to 600-700 crores.
-200-250 crore of additional topline is possible this year from the new plants.
–14-15% will be the base margins, once nitrile stabilises. Aiming at 17-18% EBITDA Margins in the long run once things normalise.
-Completely exited the emulsion business for paints business.
-Competitive intensity in current industries isn’t that high. Barriers to entry are also higher.
-1700-1800 Crores we will be at FY26. We have other plans to grow as well- hinting to acquisition.
-Not seeing any slowdown in NBR. For last 6 months, if you remove NITRILE Latex. EBITDA Margins would have been higher by 100bps.
-Nitrile Latex next year will 15-20% of the entire sales.
-Taloja- 100% capacity utilisation will be sometime in FY25. Will reach 3000tonnes per month in FY25.
Disc: no reco.
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