Q4FY23 Balaji notes
-Margins fell due to de-growth of Pharma, API & Agro sector.
-In past years experienced exceptionally high realisations led by Covid. Need to adjust expectations accordingly.
-Currently a zero debt company on stand-alone basis.
-Inducted 4 new board members. Each of them come from Diverse backgrounds.
-Changed management roles:- CFO is now focusing on Balaji Speciality.
-Revenues from DMC, PG, Ethyl Amines- Will start contributing from Q1FY24. This can improve the margin potential of the company.
-Have initiated capex for: N Butylamines (15ktp)| During H2FY24
MethylAmines: March 2024
DME: 1,00,000 MTPA: can replace LPG.
AcetonItrile plant: 15,000 MTPA with new tech. New tech will provide cost advantage. This will result in healthy operating margins.
DMAHCL: 12,000 MTPA
DMF: 15,000 MTPA.
-In last few weeks, have seen some improvement in end users. It may take 1-2 Quarters to fully normalise. Our capacity utilisation has started improving.
-All 3: Acetic Acid, Ammonia and Methanol have corrected. This will help the API industry to recover. Prices will come down to pre-covid level.
-Our high cost inventory has been exhausted. Next month there will be no high cost inventory.
-DME: Going for Aerosol market and commercial market like using it for heating for industrial usages. Have the EC, and equipment ordering has also started. Will give exact commencement next Quarter.
-DMC & PG: have seen good off take of these products in last 1 month. In next few months will see these products go full swing.
-In DMC and PG by end of the year should reach 70-80% utilisation.
-In import substitute products, takes 9-12 months to get them approved and only then they see full utilisation & traction.
-ButylAmines: September it will commission. Only producer in the country.
Second plant is Methyl Amines: by March 2024. 40,000 MTPA.
Third plant: DME will be the one.
ACN Plant will come parallel with DME
DMAHCL & DMF will come parallely
-By FY26 should expect 1,80,000 MTPA utilisation. Doubling of volumes on stand-alone basis.
-In Subsidiary, have applied for new land for new expansions. In 2-3 weeks time, they are looking for new products for the first time in the country. Acquired Sodium Cynide technology. Several new products will be launched in the subsidiary.
-5 TO 7% margin improvement should be there from here on wards for the entire industry.
-Only compete in one or two products with China. DMF has started improving from this Quarter.
-Due to RM shortage, could utilise subsidiary plant at 70-73%. Earlier we thought we will do 80%.
-Consolidated expect 26-27% margins and standalone 22% margins.
-From last 2-3 weeks we have seen customers increasing the off take. (Pharma customers).
-Sales was lower, we were able to recover trade receivables faster. As industry took precautions, we tightened the receivables as the entire industry was cautious.
-As per SEBI guidelines, no independent director can be on the board for more than 10 years. Majority of directors are finishing 10 years as they were appointed together. One director also attained 75 year age.
-500 companies nearly applied for PLI schemes. If any molecule comes from PLI, all our products will anyways go into full swing.
-Capex for FY24 will be 250-300 crores and same in FY25 as well. All capex will be done using internal accruals.
-For FY24 looking at minimum 10% volume growth and margins will increase 5-7% from the current level.
-In Subsidiary:-
-
Can double capacity. As 50% products are still imported, we may take a call to double capacities in 2-3 months.
-
Sodium Cyanide technology: will announce new products in 1-2 months.
-
De-bottlenecking:- part of debottlenecking has taken place. It will take another 3-4 months.
-Waiting for Lithium battery manufacturers to start their projects. Only then will announce other carbonates and additional 50,000 MTPA plant for DMC. No major usage of DMC apart from this.
-Only 1-2 people are using the ACN technology which we will be using.
Seems it’s corporate rejig as board of both companies was common and now separate entities and boards will be there. This point was mentioned several times in the call @BeatTheStreet10
Disc:- not invested. Tracking
| Subscribe To Our Free Newsletter |
