Q4FY24 Conf Call Notes [1st ever call]:
- Red sea crisis has increased shipping lead time by 1~1.5 months. Seems small challenge compared to COVID experience.
- All plants running at optimum capacity except Patalganga (started in FY22), which still has some room for capacity ramp up and might need 3~4 yrs to fully utilize.
- Incorporated WOS [Fine Organic SEZ Pvt Ltd] in MH SEZ area, allocated land ~30 acres. After possession of the plot, EC will be applied. Post EC approval, activity to set-up export oriented mfg facility will be initiated. Post land allotment, capacity and investment plan will be announced.
- FY23 was an aberration. There was disruption on the supply side with volatility in the raw material. Hence, FY24 performance is not comparable to FY23.
- Thailand plant’s trial production (small capacity) for one of the product commissioning is expected by the end of Jun24…After that, we need to observe for almost a quarter to decide further course of action about overall capacity needs.
- Europe demand remains subdued.
- 20~22% sustainable historical margins.
- Intend to have a plant outside India. Also, looking for acquisition.
- Before commercialization, a new product takes 3~4 yrs to get approvals.
- Cash Usage Plan: Business growth - New SEZ plant, Plant outside India, and working actively for acquisition (traits: complementary to existing chemistry, new market/customers) opportunities. We may need to borrow more money.
- Key challenge: Long approval (customer as well as regulatory) cycle.
- Will continue to host conf calls at the end of the year.
Source: Fine Organics | Investor | Investor Presentations
Disc: No position
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