First time Thesis fully reflected in Numbers
I Attended the call live, seems there will be another 1000+ crore capex over the next 2 years
NAVIN CONCALL NOTES (SOIC)
-FY23: Revenues first time crossed 2000 crores and EBITDA crossed 550 crores. EBITDA has more than doubled YOY. EBITDA Margins at 28.9%.
-R32 capex will be commissioned as per schedule. Q2FY24, sales will start. Adding one more new molecule in MPP.
-Navin Advanced Life sciences:- 40,000 MTPA HF being set up for more than 400 crores.
-2 more new projects will be given to the board for approval. CGMP4 & one new project in Speciality Chemicals.
-Not seeing any impact on pricing of agrochemicals, as most of our business is contracted. As we are working with innovators on patented molecules. Have seen some impact, for the rest of the year- Will see some impact on one molecule. Maximum impact was felt in Q4FY23. Have developed other molecules which has ensured no slowdown is seen.
-Took a decision to reduce the chemical business for Generic pharma.
-Working on debottlenecking the Honeywell contract, and will increase capacity by 20%. Working on new molecules identified by Honeywell.
-Getting very good traction with our key accounts in CDMO. Getting opportunities outside of Fluorination. Have added one new customer. CGMP4 will be significantly larger than cGMP 1,2 or 3.
-Other expenses have gone up due to 2 one off charges: consultancy charge (5crore) & another one time 10crore charge.
-Outlook FY24: No change in Guidance as we haven’t been impacted by any over inventorisation in agro. Q1- Sequentially you will see some drop, because the HPP plant in DAHEJ was shut for a month. 1 more line of HF was shut in Surat.
-R32: there is a lot of interest to buy R32 on a long term Basis. Demand will increase as it will be used as HFC & HFO blend. Pricing for R32 will remain strong.
-Not many companies are adding capacity in R32. Demand is strong and only a few players are adding capacity. For quite a few years there will be demand for R32 as a HFC blend and HFO blend. No one can add capacities for R32 post December.
-In Q4- achieved optimal capacity fairly quickly. There is still capacity headroom available in the Quarters to come. Will get close to the full capacity utilization. Debottlenecking will come into play next FY. For HPP- Honeywell contract.
-Annualized margins will keep improving. We can’t comment on a QOQ basis.
-On ref gasses and Inorganic Revenue was flat.
-Extremely confident of growth in CDMO in FY24 and coming years.
-Maximum impact of Esop charges will be seen in the first 2 years, and in the third and fourth year. It will end up going down.
-In MPP: produced 3 molecules and supplied. In total there are 5 such molecules (4 agro, 1 pharma). Identified one more new molecule for a new customer.
-Working capital: will bring it down over a period of time.
Disc: No reco to buy or sell.
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