Had sent a few questions to the management on the business, and they were kind and cooperative enough to reply to some of those. The summary is as follows:
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Recent quarterly reports of intl. players like Croda, Evonik, Archer Daniels etc. had mentioned sales slowdown due to de-stocking by their customers.
However, VT has not faced any such issues (till now). Demand from pharma (for polymers) and cosmetics (for DPO) is strong. Revenue mix as of last FY is 75% polymers, 25% DPO. -
Wrt margins vs Ideal Cures, as Ayush ji mentioned, IC is more into customised formulations (higher margin), while VT is more into polymers (can be thought of as a intermediary). Also IC has higher exports proportion due to its current ownership. Hence VT vs IC is not an apple to apple comparison wrt margin profile.
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As per them, their know how and capabilities on a wide range of polymers (mostly acrylic based) is their advantage over other Indian players. The 3 primary applications of their polymer excipients are in: sustained release, enteric coating (targeted as per ph level of surroundings etc.) and taste making.
In my view, the India side of their polymer sales will likely follow – Indian pharma industry growth rate (expected to be around 9-10% CAGR till 2030 as per some industry reports) plus the addnl. market share they gain.
If they can keep on increasing exports and also add a few more product lines, they are likely to do really well.
The cyclicality of GMs is likely to be there based on crude oil prices (as long as their product mix is dominated by acrylic polymers).
PS – Still figuring out reliable sources to get key customer names.
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