Sharing the notes from Screener.in
Financial Performance:
- FY2023 saw a 31% increase in income and a 68% surge in profit on a consolidated basis.
- Consolidated EBITDA margin increased by 550 basis points over the last two years.
- Consolidated debt to equity ratio stands at 0.9 times now compared to 1.3 a year ago.
- Consolidated domestic and export sales continued their growth trends, growing by 36% and 26% respectively on a year-on-year basis.
- Consolidated EBITDA margin for FY2023 was 17.4% compared to 15% in FY2022, an increase of 200 basis points on Y-on-Y basis.
- Consolidated PAT for Q4 FY2023 was 36 Crores compared to 29 Crores for the corresponding quarter previous year, up by 25% Y-on-Y basis and 12% on Q-on-Q basis.
Capex:
- The company has 98 Crores of CWIP, out of which 93 Crores is towards its precipitated barium sulphate project, which is expected to be completed in the first half of the current financial year.
- The company plans to sell 30,000 volume of barium sulphate in the first year and has already spoken with big end users and distributors in India, Europe, and North America.
- The company expects volume growth in both chromium and barium chemicals in FY2024, with a focus on targeting certain EBITDAs and maintaining margins.
- The company has pending capex of about 10 Crores for FY2024 and cannot give a guidance for top line growth in FY2024, but expects growth to continue with the addition of the new product in barium.
- Vishnu Chemicals Limited plans to undertake a capex of Rs. 90 crores for a barium sulphate plant.
New Products:
- Upon commissioning, the company will become the largest producer of barium chemicals in India.
- Precipitated barium sulphate finds its application in the paint industry, powder coating, battery industry, and is also being researched by some of the most acclaimed scientists globally to create the whitest paint in the world directly from precipitated barium sulphate.
- The company plans to add 20,000 tons in chromium and has backward integration of soda ash of 30,000 to 35,000 tons.
- The company is working on new value-add products in both chromium and barium.
Guidance:
- Company expects margin improvement in chrome and barium.
- No guidance given on volume or value growth for FY2024.
- The demand for barium sulphate is steady, and the company is seeing regular volumes.
- The supply scenario for chromium remains steady, and the company is not witnessing any major production cuts globally.
Raw Materials:
- The use of barium sulphate has seen consistent growth of 12% YoY in the powder coating industry in India, which is replacing titanium dioxide due to its oil absorption and cost-effectiveness.
- The pricing of chemicals is determined by raw material cost, freight cost, and demand and supply, with a current correction in realization of under 10% due to the decrease in freight costs.
- Raw material cost reduction through backward integration in barium.
Miscellaneous:
- The company is recovering soda ash from the process by pumping in carbon dioxide instead of sulfuric acid, and as production increases, the recovery will be proportionately increased.
- Barium sulphate is used as a replacement for TiO2 in certain applications like the powder coating industry.
- The powder coating industry in India has grown from 76,000 tons to 140,000 tons in three years, and as it grows, the demand for barium sulphate will continue to increase.
- The demand for barium sulphate in the powder coating industry is estimated to be about 15-20% of the overall demand for TiO2.
- Utilization rate for barium chemistry was 55-60% in FY2023.
- Company targeting to utilize barium carbonate capacities upwards of 70% in 2024.
- R&D for chromium metal ongoing, hoping to start looking at a pilot plant towards end of 2023.
- Board approvals received for QIP, enabling approval for 12 months, no update on timeline for raising funds.
- Investors can reach out to the company for further questions or queries.
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