Concall notes and Result summary:
Vishnu Chemicals Ltd
- In the process of Chromium mines and processing plant. The acquistion of Chromium benefacation plant is to secure the consistent supplies and not for cost saving.
- Starting up of Barium sulphate plant costed ~5crs. Demand outlook is strong. Currently in the approvals process with Big players. Supplies to start from Jan 2024
- Done QIP for working capital and debt reduction
- QOQ: Chromium volume is there, but chrome ore price went up, so GM reduction. Realization of chrome product also dipped
- Expect the utilization to move from 70% in Q2 FY24 to 90% by Q4 FY24
- Chrome ore prices went up 25% in last 3 quarters
- Barium chemicals: Received approvals from big paint manfrs. Utilizaiton to go from 40% in Q2 to 60% in Q4.
- Depreciation and Finance cost impacted the bottomline
- Domestic demand is stable but Exports are seeing headwinds (still doing good in volumes as co is leader in domestic market).
- Barium Carbonate: Mainly related to Infra/construction industry. Dumping from China is impacting the demand (since china real estate market is facing headwinds). The main application is in tiles, water purification, bricks etc. Domestic demand is good
- Largest Chromium plant in Eu being shutdown. They used to supply very speciality grade product. Co, is developing that product and in the R&D and Approval process. Expecting to supply from Q4 Fy24/ Q1 FY25
- H2 should be (much) better than H1.
- International markets contribute ~50% revenue. But international market has demand headwinds. But the co is planning to manage by focusing on barium suplhate, barium carbonate and other derivative
- Next CY, Next FY: Commisioning and ramp up of utilization in subsidaries. Reducing cost of power through solar, Backward integration of Soda ash plant ramp up in utilization. These factors will improve the profitability in next year. Macro factors if become better, would lead to even better growth
- Scope for margin expansion: Above mentioined points. Flexible product mix is the main factor that the management wants to realize. Chrome ore acquistion would help.
- Domestic : Export ratio is ~54: 46
Note: Missed lot of details in the summary. Advise to read concall transcript or listen to concall recording
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