Ami Organics Q2/H1 results highlights –
Q2 results –
Sales – 172 vs 147 cr, up 17 pc
Gross Margins @ 41 vs 48 pc due – steep price erosions in finished products due oversupply from Chinese manufacturers, higher sale of lower margin products. Also, high cost inventory of RM was a head wind
Expecting much better performance in H2 due healthy order book that the company has
EBITDA – 25 vs 28 cr ( margins @ 14 vs 19 pc )
Lower EBITDA margins due – lower Gross margins, higher employee cost due annual increments, hiring for Ankleshwar Unit and ESOPs
Adjusted PAT – 15 vs 19 cr ( without factoring the impairment of JV – Ami Oncotheranostics )
Have signed another contract with Fermion taking the total number of products to be supplied to 3, enhancing revenue visibility for coming years. Commercial production to start from Q4 FY 24 from Ankleshwar facility (validation batches). Have a few more products in pipeline for which manufacturing contracts may materialise for Ami Organics with Fermion and other innovators
One UV Observer – speciality chemical product for paint Industry ( for metallic paints used in Auto Industry ) is scheduled for launch in Q3. The product uses Swiss technology. Validation batches have already been approved
Electrolyte Additives (for energy storage) update – in advanced stages of negotiation of contract with a couple of customers ( first Indian and global company outside China to develop the product ) – product already approved by 6 buyers
Ankleshwar plant to commence commercial production in Q4 ( basically the new 190 cr brownfield capex for advanced intermediates to go live )
Completed acquisition of majority stake in Baba Fine chemicals ( 55 pc stake ) in Q4
Q2 Sales breakup –
Advanced Pharma Intermediates – 134 vs 125 cr
Speciality Chemicals – 38 vs 22 cr (rapid growth due smaller base)
Current manufacturing facilities for advanced Pharma intermediates and speciality chemicals – 03 + 01 R&D facility
59 pc – exports
41 pc – domestic sales
Revenues from top 10 customers @ 58 pc
Cash and cash equivalents @ 104 cr as on 31 Sep
Chinese over supply is not a direct threat to the company. Its just that company’s competitors got cheaper RMs from China and hence the downward pressure on finished products
Company should be back to 48 pc gross margins in next 2 Qtrs
Capex in H1 @ 100 cr. Another 105 cr lined up for H2
Electrolyte manufacturing supply to begin in Q3. Commercial supplies to begin in Q4
Full capacity ramp up of molecules being supplied to Fermion expected to happen in FY 25 – Q3 onwards
Baba Finechem – long term revenue target of 200 cr. Expect exponential ramp up at Baba Finechem from next FY onwards
Aiming to ramp up speciality chemical sales to 2.5 times of current sales in about 2-3 years
Company’s domestic business is mostly spot business. Most of the export business is contract business
Ankleshwar plant has 3 blocks. One of them is Dedicated to Fermion Ltd ( 33 pc of capacity ). This block is fully booked. Other two will be used by the company for business expansion till FY 27
Increase in inventory due build up in anticipation of execution of Fermion contract
Baba Finechem’s H1 sales are 21 cr, PAT is 14 cr !!!
Disc: holding, biased, not SEBI registered
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