Q1FY24:- SRF| Consolidation ahead
-
Speciality Chemical business delivered growth in Margins and Sales YOY inspite of Agrochemical destocking. Significant inventory winding off taking place globally. There is rescheduling of some orders. Temporary Hiccups being seen.
-
Ref gases were impacted due to Chinese dumping, Soft Indian summers, demand for Chloromethanes were also weak, underlying potential remains strong for REF gases. Expecting performance to improve in H2.
-
1100 crore worth of projects will commercialise in Fluoro Chemicals. Including PTFE.
-
Packaging Films facing headwinds due to huge capacity additions. Will take sometime for Demand and Supply situation to normalise. BOPET is especially worse.
-
1100 Crore for Fluorochemicals+1400-1500 crore of Projects in Speciality chemicals. 2800-2900 crore of Capitalisation in FY24+ 400-450 Crores in Aluminium Foil will get commercialised.
-
Speciality chemical business has grown 10% YOY. Majority of decrease in Chemical business is due to reduction in HFCs. Speciality chemical business EBIT Margins have increased.
-
We are still positive on overall basis for spechem business this year.
-
1000-1500 MT of sales should come through in PTFE.
-
6-7 AI’s will take 2 years to materialise. In fairly good shape to get these contracts.
-
H2 should be much better than H1 in Ref gases. Sales will be better in Q3 & Q4. From Reg gas, from a year as a whole there will be some growth vs last year.
-
Will be better to wait for Q2 to give a better picture for FY24. We Believe growth is possible due to contracted nature of the business.
-
Willingness to keep a larger inventory has gone down due to China re-opening up.
-
HFC R32: some new capacities will play out, our position is fairly strong due to backward integration and portfolio of products. Overall bullish on the long term prospects of R32.
-
PTFE prices in the shorter term should go up. Improves economics of the project.
-
Dedicated plants today will be 15-16, revenue will be in the range of 85%. Revenue shift towards dedicated should be higher. Most plants we will commercialise today(H2FY24) will be dedicated in nature.
-
Q2 will be better than Q1 in ref gases and H2 will be better than H1.
-
Majority of the inventory rationalisation has happened in the Agrochemicals space. Pricing with the customer is driven on contracts business. Product based contracts and Not on EBITDA Per tonne.
-
Market share in key intermediates should be 40-45%. Avg ROCE in Packaging Films business is in excess of 16-18%. Happy with 15-17% in Packaging film business.
-
Destocking is happening at the end distributor level.
-
Closing Q4 Margins were on the higher side. Will give more idea in Q2. When asked on bettering margins in FY24 over FY23.
Disclaimer: no transactions in last 30 days. Not a recommendation to buy or sell.
This risk is here in the near term
| Subscribe To Our Free Newsletter |
