Ganesh Benzoplast keeps surprising regularly, now they had the fraud issue and again increased LPG capex costs to 700-750 cr. They had started with LPG capex costs of 400-450 cr. in FY23Q3, increased it to 500 cr. in FY24Q1, 550-600 cr. in December 2023, 650-700 cr. in FY24Q3, and now 700-750 cr. This is the reverse of how Aegis operates. Concall notes below.
FY24Q4
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Issue of unauthorized bank account and loans
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Funds were routed into an account that company and its directors didn’t know about, believe that company has indemnification from this issue, wont have any financial repercussions
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One of the 7-8 parties have waived its claim
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Ramakant Pilani and his son resigned from the board, they hold ~1% in the company
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Have changed payment approval systems in terms of the limits for how much are authorized
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Throughput reduced from 1.66 mn MT to 1.4 mn MT, they changed product mix which contributed to revenue increase. Will continue to improve margins via product mix change
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60-65% of products handled are hazardous (higher margin) and 30-35% are non-hazardous
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LPG terminal will cost 700-750 cr. (increased from 650-700 cr. earlier)
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Aegis competition in JNPT: Ganesh Benzo has lower cost land + Ganesh is the only one to have access to railway evacuation
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Have faced land allotment issues in Mangalore
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Annual maintenance capex is 12-15 cr. (will be higher at 20 cr. in FY25)
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Other income of 15 cr. was from wharfage income (4-5% margin only)
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Chemical
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75% utilization which should ramp up to 95% in FY25 (10-15% growth expected)
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Ramesh Punjabi has taken over this division (chemical engineer from IIT Mumbai with 30-years in the group)
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Faced issues due to currency depreciation in Nigeria (~20% of their sales) + red sea issues
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Disclosure: Not invested (no transactions in last-30 days)
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