Conference Call with Balaji Amines Management and Analysts on Q3FY22 Performance and Outlook. Listen to the full earnings transcript.
Specialty Chemicals company Balaji Amines declares Q3FY22 result: Consolidated Q3FY22 Revenue up by 44% at Rs 565.83 Crore; EBITDA up by 35% at Rs 159.67 Crore; Net Profit up by 29% at Rs 101.59 Crore Revenue from Operations for Q3FY22 stood at Rs 565.83 crore, up by 44.11%, as compared to Rs 392.64 crore in Q3FY21. Total volumes stood at 27,589 MT for Q3FY22 as against 31,993 MT in Q3FY21. The revenue growth was muted sequentially as compared to previous quarter due to sluggish demand for few products - because few of our clients couldn’t procure Key Starting Materials (KSMs) for some of our matching products. At the same time, the company had to shut down the plants of DMF & Acetonitrile for a brief period to carry out the de-bottlenecking exercise, which were completed in the month of November 2021 Amines volumes stood at 6,460 MT Amines Derivatives volumes stood at 9,912 MT Specialty Chemicals volumes stood at 11,217 MT EBITDA for Q3FY22 was Rs 159.67 crore, up by 35.45%, as compared to Rs 117.88 crore in Q3FY21. EBITDA margin for Q3FY22 stood at 28.22% as against 30.02% in Q3FY21. The fall in operating margin was primarily due to lower operating leverage on account of dip in volume offtake PAT for Q3FY22 was Rs 101.59 crore, up by 28.74%, as compared to Rs 78.91 crore in Q3FY21. Diluted EPS for Q3FY22 stood at Rs 27.64 per equity share On the performance Mr. D. Ram Reddy, Managing Director, commented, “The demand remained sluggish due to the unavailability of KSMs for same of our matching products at our customers’ end in Q3FY22. However, this constraint is now over, and we are witnessing a substantial pick-up in these products. Our sales volumes were also affected on account of temporary shutdowns we had to undertake at our DMF and Acetonitrile plants for the debottlenecking exercise, which was completed in November 2021. As announced earlier, our capex for DMC plant under Phase 1 of our 90-acre Greenfield Project (Unit IV) is nearing completion and we hope to commence operations during Q1FY23. The capacity of this plant would be about 10,000 to 12,000 tons per annum. The company would be the sole manufacturer of this product in India and currently the annual domestic demand stands at about 8,000 to 9,000 tons which is completely met by imports. We are confident to achieve capacity utilization of 60-70% at our DMC plant in our first year of operation itself. DMC is used in the production of Polycarbonate and Lithium Batteries – the consumption of which will exponentially grow in India backed by various government incentives. Also, we see encouraging scope for exporting DMC to outside markets." Result PDF
Key Financial Highlights Balaji Amines Q2FY22 Revenue up by 86.76% at Rs 528.67 Crore; EBITDA up by 80.48% at Rs 134.26 Crore; Net Profit up by 99.25% at Rs 88.07 Crore Total Income for Q2FY22 grew by 55.09% to Rs 439.33 crore as compared to Rs 283.28 crore in Q2FY21. The revenue surged on account of higher volumes driven by the commissioning of additional Ethyl amines capacity of 16,500 MT in last quarter, improved capacity utilization and overall healthy demand across our product basket. Total volumes stood at 23,604 MT for Q2FY22 as against 23,151 MT in Q2FY21. For Q2FY22, Amines volumes stood at 5,861 MT Amines Derivatives volumes stood at 8,261 MT Specialty Chemicals volumes stood at 9,482 MT EBITDA for Q2FY22 was Rs 102.06 crore as compared to Rs 72.22 crore in Q2FY21, posting a growth of 41.32%. EBITDA margin for Q2FY22 was at 23.23%, as compared to 25.49% in Q2FY21. The margins remained a little subdued due to significant increase in prices of key raw materials, which are now being passed on to end customers after a lag of 3-4 weeks PAT for Q2FY22 was Rs 69.59 crore, up by 46.01%, as compared to Rs 47.66 crore in Q2FY21. Diluted EPS for Q2FY22 stood at Rs 21.48 per equity share. Revenue from Operations for H1FY22 stood at Rs 833.58 crore, up by 67.98%, as compared to Rs 496.25 crore in H1FY21. EBITDA for H1FY22 was up by 74.18% at Rs 218.98 crore as compared to Rs 125.72 crore in H1FY21. EBITDA margin for H1FY22 was at 26.27%, up by 94 basis points, as compared to 25.33% in H1FY21. PAT for H1FY22 witnessed a jump of 83.95% to Rs 151.41 crore from Rs 82.31 crore in H1FY21. Diluted EPS for H1FY22 stood at Rs 46.73 per equity share. Consolidated Performance Highlights for Q2FY22 & H1FY22 Revenue from Operations for Q2FY22 stood at Rs 528.67 crore, up by 86.76%, as compared to Rs 283.07 crore in Q2FY21. Total volumes stood at 28,361 MT for Q2FY22 as against 25,499 MT in Q2FY21. EBITDA for Q2FY22 was Rs 134.26 crore, up by 80.48%, as compared to Rs 74.39 crore in Q2FY21. EBITDA margin for Q2FY22 was at 25.40% as against 26.28% in Q2FY21. PAT for Q2FY22 was Rs 88.07 crore, witnessing an increase of 99.25%, as compared to Rs 44.20 crore in Q2FY21. Diluted EPS for Q2FY22 stood at Rs 24.61 per equity share. Revenue from Operations for H1FY22 stood at Rs 980.61 crore, up by 93.32%, as compared to Rs 507.26 crore in H1FY21. EBITDA for H1FY22 was up by 116.11% at Rs 278.55 crore as compared to Rs 128.89 crore in H1FY21. EBITDA margin for H1FY22 was at 28.41%, up by 300 basis points, as compared to 25.41% in H1FY21. PAT for H1FY22 witnessed an increase of 144.73% to Rs 185.46 crore from Rs 75.78 crore in H1FY21. Diluted EPS for H1FY22 stood at Rs 52.51 per equity share. On the performance Mr. D. Ram Reddy, Managing Director commented, “Post the swift weakening of COVID-19 pandemic across India, the overall demand for our product basket remained healthy despite the temporary reduction in demand for certain products from pharmaceutical clients on account of Chinese API KSM unavailability due to challenges in ocean freight logistics. The prices of some of the key raw material prices witnessed significant increase which impacted the operating margins of the business in the current quarter. However, the transition period of 3-4 weeks is now over, and we have started passing on the increase in cost prices to end customers. While anticipating favourable pricing and better product mix going ahead, we expect operating margins to inch upwards in the H2FY22, from the current levels. During Q2FY22, the higher price of acetic acid gave us perfect opportunity to undertake the long pending activity of the de-bottlenecking exercise of our Acetonitrile plant. With this exercise now complete, the plant capacity has now increased from 9 TPD (tons per day) to 18 TPD and we now expect gradual ramp-up in capacity utilization in H2FY22. As disclosed in previous quarter, we also plan to undertake capex of approximately Rs. 70 to 80 crore, by using a different technology for additional Acetonitrile plant having capacity of 50 TPD, at our 90-acre Greenfield Project (Unit IV). This plant is likely to get commissioned during FY23. We had to shut down our DMF plant in the first week of October 2021 due to a small incident which had led to minor leakages. We took this opportunity to also undertake debottlenecking exercise which will enhance the operating capacity of the plant from present 50 TPD to 75 TPD. We expect the DMF plant to re-commence operations within first week of November 2021. The capacity utilization of DMF plant was about 53% in Q2FY22 and 37% in H1FY22 (versus 35% in FY21) and we expect the capacity utilization to steadily increase on account of robust demand and continued higher price realisations. Our subsidiary company – Balaji Specialty Chemicals Private Ltd. – continues to witness robust demand and higher price realization for its products. The capacity utilization increased from 42% in Q1FY22 to 67% in Q2FY22 with average production of 1,675 tons per month in the second quarter. The subsidiary company has been facing shortage of raw materials which is imported. Upon smoother accessibility to the raw materials in coming quarters, we expect rapid increase in capacity utilization in H2FY22 and over the next fiscal year. We also aim to increase the share of exports from our subsidiary plant to about 25-30% going forward from about 15% in H1FY22 We shall continue to witness improved demand across our product portfolio as the dependability on Indian pharma and agrochemicals industry increases on account of ‘China Plus One’ business strategy being adopted by western companies. Our thrust remains to expand our portfolio of key derivative products alongside entering newer specialty chemicals to gain from both vertical integration and operating efficiencies.” Result PDF