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Apcotex Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 and FY '22 Earnings Conference Call for Apcotex Industries Limited. [Operator Instructions] Please note that this conference is being recorded.
At this time, I would like to hand over the conference to Mr. Anuj Sonpal, CEO of Valorem Advisors. Thank you, and over to you, sir.
Warm welcome to you all. We represent the Investor Relations for Apcotex Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the fourth quarter and financial year ended 2022.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is clearly to educate and bring awareness about the company's fundamental business and financial quarter under review.
Now let me introduce you to the management participating with us in today's earnings call. We have with us Mr. Abhiraj Choksey, Managing Director; Mr. Sachin Karwa, Chief Financial Officer; and Mr. Anand Kumashi, Company Secretary.
Now without any further delay, I request Mr. Sachin Karwa to give his opening remarks. Thank you. And over to you, sir.
Thank you, Anuj. Good evening, and welcome everyone to this earnings conference call for the fourth quarter and full year of financial year 2022. Along with me in today's earnings call, I have our Managing Director, Mr. Abhiraj Choksey; and Mr. Anand Kumashi, the Company Secretary. I hope you had an opportunity to review the financial statements and earnings presentation, which have been calculated and uploaded on the website and the stock exchanges.
So briefly on the financial performance for the fourth quarter of financial year 2022 we had strong growth on a year-on-year basis and also on quarter-on-quarter basis. The company has reached historical highs in Q4 FY '22 across all the financial parameters. In Q4 FY '22, the revenue from operations grew by about 48.5% on a year-on-year basis to around INR 278 crores. The EBITDA grew by 51% on a year-on-year basis to around INR 45 crores, with EBITDA margin reported at 16.32%.
Net profit grew by 37% on a year-on-year basis to INR 31 crores, and PAT margins were reported 11.14%. For the financial year ended 2022, the revenue from operations grew by 77% on year-on-year basis to around INR 957 crores, while EBITDA grew more than 100% to around INR 140 crores with EBITDA margins of 14.61%. And the net profit also grew over 100% to INR 99 crores with PAT margin of 10.33%. The growth in fourth quarter and for the year was driven by strong volume across all the industries, geographies, product group and also increase in realization. Export contribution grew to 21% of the overall revenue.
On the CapEx side, the work on new expansion project is running on schedule and is expected to be completed in Q3 of year FY '23. Lastly, the company has recommended a final dividend of INR 3 per equity share, making total dividend for FY '22 to INR 5 per equity share.
With this, I would like to open the call for question-and-answer session. Thank you.
[Operator Instructions] We have the first question from the line of Mr. Ankit Kanodia from Smart Sync Services.
I think 4 years ago, in Q4 FY 2018, one of the participants asked you about growth rates and vision of the company. So I would just like to share what the management said at that point of time, that our first target is INR 1,000 crores turnover and said, our vision is not so much in numbers that we want to be a INR 5,000 crore company or INR 10,000 crore company. Our vision is more towards where we want to be and wherever we are and aggressively grow in technologies that we understand.
Now unlike some other markets where growth is 40% to 50% a year and you can think of financing 5 years, it is not the case in current product ranges that we are in. So it's 4 years, and we are now close to INR 1,000 crores. So just your views as to how would you rate your performance given there was a year of pandemic in between and if I would like to repeat the same question today, what would be your thoughts on the next few years in terms of how we are today compared to the past, if you can give some color?
Yes. Thank you, Ankit, thanks for reminding me what we said in 2018. So we feel pretty happy and where we are today. Obviously, there have been challenges. I think 2018-19 was a difficult year for us. '19-'20, we were -- sorry, 2019-20 was a difficult year for us, and of course, '20-'21 started off very difficult with the lockdown in India. But post that, I would say, from Q2 of FY 2021; so almost 6, 7 quarters in a row; we have taken a lot of steps. We've learned a lot through COVID. We have made our plants flexible. We had a huge trust on our sales and marketing, a lot of customers that we were -- both in India and abroad that we were looking to get approvals from.
A lot of that has come through and obviously, you're seeing that in the results, we are running at 100% capacity utilization right now, even the debottlenecking projects that we took up in this financial year, earlier in the financial year, are fully utilized now. So we feel very happy where we are. Of course, post-COVID, there was a lot of -- and so uncertainty and we were also wary of the risks of the uncertainty, but we took some bold calls in the last 1.5 years, and that has paid off. So we feel happy.
Going forward, just the products that we have, I think there is potential to grow this business to over the next 5 years to maybe 2 to 2.5x the current revenue. Again, I just want to quickly mention, and I mentioned this many, many times that look, revenue is a number that, of course, feels good when you reach INR 1,000 crores, INR 1,500 crores tomorrow, INR 2,000 crores, but we focus more on our volumes because in our kind of business, given the huge volatility that oil prices and therefore the downstream petrochemicals, which are our main raw materials.
So revenue can vary. So for example, again, if oil falls to half, then you could see a dip in revenue but what we are more interested in is focusing on our EBITDA margins, on our contribution margins and of course, per tonne margins as well, more than anything. So I hope that kind of answers your question.
And in terms of EBITDA margin or EBITDA per tonne as we understand, the EBITDA per tonne is a much better figure for -- a metric for us to look, I think it would be fair to say that we are still among all time high in that number? Are we close to all time high?
Yes, we would be overall at a pretty high number, yes.
Any ballpark any 10%, 20% below, high or what would you like to quantify that, I mean, how?
Well, I'll just say that our EBITDA per tonne for the financial year is up by a good double-digit margin, falls around 40%-50%, almost 50% for the year. And for the quarter is up by also 20%, 25%, 22%, I think, between 20% and 25%, compared to the…
But that would be compared to the -- but that would be compared to the last year, which was a pandemic hit year. If you compare it with 2018 or '19 pre-pandemic period would it be close to [ all-time high, here ]?
Yes, for sure, yes. We would be higher compared to '18-'19 as well.
One last question before I go back to the queue. In terms of ApcoBuild, I think last time you mentioned about Maharashtra, Gujarat, Madhya Pradesh, and Goa was the latest state we entered. Have you added any more states or we are still focusing on these things?
No, mainly these 4 states right now.
And in terms of volumes after COVID in this quarter, would you like to give any growth rate?
I would say, for the year for ApcoBuild, we are -- in terms of volumes higher by more than 100%, I think 120%, 130%. So we feel -- as I said, it's still a small part of our business, and we don't give out numbers separately for ApcoBuild but as and when it becomes -- we feel it is a reasonable portion, we will talk about it more. But as of now, we're very happy with the development in sort of construction chemical B2C as well.
[Operator Instructions] We have the next question from the line of Farokh Pandole from Avestha Fund Management.
Congratulations on the great results. And I hope that we are building up momentum for the future and confidence for the future as we go along. I have a question. My first question, you mentioned in the -- to the earlier sort of color, you mentioned focusing on margins rather than on revenues. And I just wanted to get some sense of, in light of where oil prices are and what has happened with oil prices over the last year. What sort of -- do you feel like the full year margin is a more sustainable margin with the expansion, et cetera, is the current quarter margin something that we should be aspiring to.
So some color basically on the sustainability of margins going forward? And my second set of questions was on the CapEx, both for the gloves, latex capacity and I noted with -- that we've extended our sort of commissioning date further another 3 months. We are now talking about December of this year. So there has been a pushback of few quarters over time. And also, if your answer to me in the last quarter on the NBR project, if there is any change in the last 3 months to make you sort of evaluate that project any differently from the sort of response you gave us in the last quarter.
So I'll take it one by one. The easy one is CapEx. So frankly, we are not delayed really. I had said that it would be around towards the end of the second quarter. So just to be conservative, we're just saying Q3 because while today, there are no delays, but you all know the situation with the supply chain and availability of a lot of materials, not only raw materials for our product, but even capital goods, there's been a huge demand for capital goods.
So in case there is a delay, it would not be on account of anything sort of we have not internally, it's on -- really on account of any delays that the suppliers, there may be a delay for a month or so, but certainly not a quarter. And so we are saying in Q3, but we are hopeful that one project would be even end of Q2 and the second project would be -- in Taloja would be early Q3. So I think we're just being conservative given what's happening in the world today. Therefore, we mentioned Q3, yes.
So we will see some revenue in Q2 and then maybe more revenue in Q3 and then so on and so forth going forward?
I had always mentioned that Q2 would be -- end of Q2 would be the commissioning is from what I recall at least. And for one of our projects, yes, that would start kicking in from Q3. But obviously, it will not be overnight 100%, it would build up over -- we hope 6 months, but it could take a little longer because some of the reapproval cycles from a new plant for even for our existing customers, they would want to test it out for 2-3 months before completely moving whole hog.
So that does take time and so you would see some of it in Q3 and some of it -- and then from Q4, of course, both the plants will be completely ready, and then it will be -- depend on how quickly we're able to ramp up and complete the approval -- reapproval cycle with a lot of our customers. And yes, and you'll have to add new customers as well.
Unfortunately, there are customers that are asking us for material, but we're not able to go through the approval cycle because we just don't have material to give them even a few tonnes we don't have today. So the demand cycle is quite strong. And so we're focusing on the current customers that we have been working with for the last year or 2 strategically at least we feel that's important. So yes, that's on the CapEx front.
As far as margins being sustainable, look, we -- I've always said there could be a quarter or 2 where suddenly if there's a crash, then we could be stuck with some high-cost raw materials, the crash in oil prices and subsequent petrochemicals. So -- but on average, we have over the last few years, barring maybe 1 year in the middle, we have consistently grown on our EBITDA margins percentage-wise and certainly on the EBITDA per tonne. And that will be our endeavor.
Yes, there have been tailwinds in the last 6-8 months that I must admit. For example, we -- there's really been no crash, let's say, in the last 6, 8 -- last, I would say, 6 quarters, so that's obviously helped us. The last quarter, for example, we did have some inventory gains due to the war, suddenly oil spiked, all our petrochemical prices, the raw material spiked, but we had some good buying that we have done in December and January and February and so on.
So obviously, that, to some extent, I would say maybe about 10%, 12% of our profits were due to that factor as well. But we are quite confident that with the set of customers we've built as long as the macro picture and the macro environment is strong, we feel pretty confident of sustaining these margins in the long term. Again, I'll just to clarify, there could be 1 or 2 quarters the margins will fall, but our endeavor is to stay between the 13% and 17% margin numbers. And your last…
On the NBR?
Yes. Your last question on NBR, I was just -- we are waiting on the final environmental clearance for NBR project, which should come through, we're expecting this quarter by the end of this quarter, after which we need to take a call. We feel bullish, as I said, but we haven't taken a final call. I'm sorry to -- there's no major update. Our focus is just to get these 2 projects off the ground this in the next 6 months and hopefully, as and when we take a call, I'll let you know. But it certainly -- as part of our strategic plan, it is on the cards.
And one more thing that's changed, I just want to mention is, is that commodity prices and CapEx costs have significantly increased in the last 3 to 4 months, as you can imagine. So we would have to reevaluate the IRRs of the project and actually take a call because we're very conscious of allocating the right amount of capital, and we don't want to do it in a cycle, which is at the peak. And we may -- so we were not sure. We may choose to wait. I don't know if that's a smart thing or not because things can go up further, I'm not sure, but we'll reevaluate the IRRs once we get our environmental approval, see what the commodity prices are then and when I say commodity, I mean, steel, cement, all the commodities that are required for a big CapEx and then take a call.
Sure. And how much money have you spent on the gloves capacity that you are planning for the third quarter?
So just to clarify, we are doing 2 projects, one in Valia, one in Taloja. The one in Valia is completely for gloves. There will be some flexibility that we'll try and build in, but -- and the one in Taloja is a multipurpose latex plant. And at this stage, we're not sure, depending on, again, the margins we can use it for our styrene butadiene latex products that go into carpet construction, paper and so on or uses for nitrile latex for gloves. So I just wanted to clarify that. Sorry, what was your question?
So I think we were talking about INR 150 crores, if I'm not mistaken. And so how much of that has already been spent and how much is balance?
Yes, how much has been spent. So the cash outflow up to March 31 out of -- our total project size is about INR 190-odd crores between both plants, and we are investing in a zero liquid discharge plant in Valia as well. So both -- everything put together, out of which we would have spent about 40%.
But that's cash outflow, yes, everything -- all this will be obviously commissioned when -- I mean, it will hit the balance sheet only when we commission the projects.
We have the next question from the line of Mr. Karan from AMSEC.
So just wanted to have some understanding with respect to our product mix between 2 product categories, latex and rubber.
Yes, it remains about the same, which I had mentioned last time around -- say about 55% to 60% is latex, maybe around 56%-57%, the rest is all the rubber products, which are solid polymers, the liquid polymers or latex is about 56%, 57%.
And as you mentioned that we are already running [indiscernible] exercise. So how are you preparing for the volume growth for the near- to medium term?
For the short term, we are -- unfortunately, it's a good problem to have, but we don't have capacity and the new capacity will all start coming on stream from Q3 onwards.
So you are working on some incremental CapEx for latex as well, so are we on with the plan?
Yes. I mean -- I don't know what you mean by incremental CapEx that was done last year, last year, meaning in the middle of 2020, we finished that. That was debottlenecking, small debottlenecking projects to the extent of INR 10 crores, INR 15 crores investment, which we already completed and that is already on stream and fully utilized. Now we don't have any incremental plan. It will be our 2 big projects, which are coming on stream between Taloja -- between both our plants for latex.
We will move on to the next question while I now invite [ Mr. Satish Kumar from NB Investments ].
Congratulations, Abhiraj for a wonderful performance. Sir, I have a few questions. The first one is the Valia, the one XNB Latex which you are doing, I think you have plans to do in 2 phases, Phase 1 and 2. Just wanted to know the environmental approval what you have, EC approval, sorry. Is it for both the phases we have got?
Yes, we will have the full approval by the end of this quarter. So for both phases, we will have it by the end of this quarter.
So the Phase 2, we don't have as of now.
No, but we'll have it. But the Phase 2 decision we have not taken, that's something we'll take next year anyway, once we have utilized the first phase or close to utilizing the first phase. So we have enough time.
And this NBR, you are founding it may take more time, that's right?
I mean the decision -- well, we're waiting for the environmental clearance and then after that, we will take a decision, as I said, as I was explaining to the -- one of the previous callers that will depend at that time what the CapEx…
No, no. I was saying when are you expecting the EC approval for NBR?
Same, same, this quarter altogether.
Altogether, both are expected, right?
Yes, yes.
Okay. On a quarter-to-quarter basis, the sales have gone up by 11%. Is it possible to give us in terms of volume and value growth?
What I would say -- yes, I think I have those numbers, if you can give me a second. I mean while we don't give exact volume numbers, I would say, yes, 11% is the value growth, out of which I would say 7% out of 11% is volume. The remaining 4% is because of -- for the price increases or raw material increases which led to price.
Now that you are saying that we are already running at optimum capacity, without any more increase in the raw material prices, so this INR 270 crores to INR 280 crores of run rate per quarter, is what we can expect during the first half of the current financial year?
That's correct. That is correct. Of course, again, to qualify, it depends on oil and downstream petrochemical prices for whatever reason if oil falls, then revenue can fall also.
But if you can throw some light how it has behaved during this last 1 month?
I think it has gone up further. It's consistently gone up since, I would say, February. Now I think there are some talks so some respite but I would say, last 3 months, 4 months in a row, mainly due to the war, post-COVID obviously, the bull run on goods and some other products and then the war, Ukraine, caused the sudden spike in oil prices which resulted in all petrochemicals, I think, going up substantially.
Since you said war, so is this war in Ukraine having any impact for the company in terms of, let's say, the sales, the raw material availability or freight rates, container, anything, anything it has affected other than increase in the crude prices?
Well, 2 things. One is directly, we don't have much business in Russia or Ukraine. We do have a small business, but it's a very small percentage. So yes, certainly, that has been temporarily affected. We don't buy any raw materials from Russia and Ukraine directly, so that's really no impact to us. But overall, like everyone else, I think the whole world is facing this issue because of the China COVID situation and the war in Ukraine, and Russia, a lot of containers are stuck, shipping rates are going up and up and up, further up more than the rates, availability is an issue.
So I would say in terms of risk and really our focus these days is managing the supply chain and ensuring because a large chunk of our raw materials are imported. So ensuring that all our imports come in on time, we have -- of course, a lot of delays are there already, but we have increased our inventory cycles, developed vendors in different areas, we have anticipated this, so far, we have not faced any major raw material shortage issues, but it remains a very high risk for the next 1 year. And as far as exports as well, right, to -- I mean we are responsible to ensure that our materials reach our export customers on time and that has also been a challenge. That remains a risk going forward and I think it will remain a risk for the next 6 months at least.
So in spite of all these challenges argument…
[ Mr. Kumar ], you're requested to please come for the follow up question in the queue as we have other participants connected.
Let Mr. Kumar finish one question. [ Mr. Kumar ], go ahead, you are already asking.
So what I want to know is because of all these challenges you mentioned, going ahead, are we in a position to protect our margins?
We feel pretty confident that we can. We have developed a set of products, a set of customers that are now quite sticky. And as I said, look, there could be a certain situation where for 1 quarter or a few months where there's sudden drop in prices, and we are stuck with some high-cost raw material inventory because we have no choice but to stock up on imported raw material. So that could happen. But in the long term, I think as a business, we have grown from strength to strength. We have grown our volumes. We've grown our customer base. We've grown our geographic base.
Within customers we have increased market share, overall, we've increased market share, we've gone into new industries and fields that we were not in. So we've done a lot of work over the last 3, 4 years. So we feel pretty confident in the long run that these kinds of margins between, as I've always said, between 13% and 17% are sustainable, and we focus on EBITDA per tonne. And so I think the bottom line number is what we focus on and I think we feel confident that it is sustainable in the long run. Again, to repeat for the fourth time, quarter-on-quarter, we could have it. I'm not sure.
We have the next question from the line of Nikhil from Perpetual Investment Advisors.
Congrats on a great sec again. So I have a few questions on the broader industry structure. So firstly, on the Ukraine-Russia war, since there is a lot of synthetic rubber production capacity in Russia, do you see any permanent opportunities emerging out of this or do they get route through China or some other countries?
Thank you, Nikhil, first of all for the question. A little hard to say, I don't think anything is permanent in the world. So I think at some point, the war will end and Russia will come back on stream. But sure, I mean, right now, because of all these bans on Russian materials, from Europe, America, also on the supply side, a lot of raw materials that Russia was importing, they are having challenges with that. I think in the next 3 to 6 months, sure, a lot of synthetic rubber that is coming out of Russia seems to be affected. I don't know how long that will last. As you know, oil from Russia is flowing, oil and gas is flowing fairly smoothly from what I understand into Europe and other parts of the world, maybe in a few months, all other materials also. But as I said, we don't -- I mean, that can be some short-term advantage, but that's fine. I mean, we don't really focus on that. Our business is not dependent on what happens in Russia.
And so on the latex side also, now Synthomer has shut down 2 of their facilities in Europe, I think, it's probably due to high cost base. So but do you see any change in industry structure even on the latex side?
Look, all I can say is demand has been very strong for us, whether that is the reason, I don't know. It could be partly. But I think if I was to venture a guess, it's really, I would say, whether or not that event happened or not, I would say what we have done and the way we have sort of grown in -- customers in India and abroad, since we're talking about Europe. I think that would have happened anyway. Sure, structurally right now, for various reasons, margins are very strong. Demand is very strong. I'm not sure what will happen. You know what is happening in the macro environment, inflation going up, that likely all economic reports, I think that's likely to affect overall consumption and therefore, demand for goods in the next 6 months to 1 year that will affect us, that will affect the world and all companies.
So I mean -- so we're on the good side, irrespective of these plants shutting down, we would have delivered the same numbers so that's assuring.
I think so. And if you see the last 6, 7 quarters, I mean, we have delivered quarter-on-quarter no matter what's happening in the world, whether there was a second wave in India, no matter what's happening in China, Noah's happening due to the war, all these bans of Russian material by U.S., Europe. We have sort of kept our heads down and focused on our business. And sure, there are some tailwinds as I mentioned, right now, for sure. Whether they last or not, we are quite confident that -- we are quite happy with where the business is.
I have 2 more questions. I'll put it quickly. Any update on the cases at CESTAT and as part of the acquisition at Valia, do you also get access to technology for other products?
The appeal process is on, in CESTAT and there are not only us, but many other companies, maybe 50, 60 other companies that were affected by the same ruling in various different industries from pharma to chemicals to steel to every -- so I think that will take some time in India, the whole legal process. And as far as technology is concerned, certainly, when we acquired the company, one of the -- while it was adjacent technology to us, and we understood it well. There were certainly some nuances of the technology and some new things we learned, which now we can take for and use it for newer products, and we are working on it with our R&D team.
Hoping to hear about that probably in coming quarters from you.
Yes. I think, frankly, our hands are full with our current projects in the current context. But yes, hopefully, in the next few quarters, when we make some progress, we'll let keep you posted.
We have the next question from the line of Alisha Mahawla from Envision Capital.
While you did mention slightly earlier in the call that the EBITDA per tonne has gone up substantially if you see from a Y-o-Y perspective, is it possible to quantify what has been the increase on Q-on-Q basis?
You mean Q3 over Q4, or Q4 compared to Q3?
No, Q3 over, Q4 over Q3.
Q4 over Q3, I'm not sure if I have that number ready with me. Sachin, if you are on the call, and I am not sure if you have the number, sorry, we're not in the same location. So maybe my finance team can come up with a percentage. Q4 over Q3, if you have the number, if you don't immediately, then we can get back to Alisha, after the call.
It's approximately 20%.
No, she's not asking Q4 over Q4 of last year. She is asking Q4 over Q3, I don't think it's -- is it 20%?
Yes.
So if I may take this question further, what is driving this improvement in EBITDA per tonne? Is it a particular product that is doing exceptionally well for us or because if this is the kind of growth we're seeing on Q-on-Q basis, it would be -- I think it would be great for us also to understand where it's coming from?
Look, partly, it's coming from overall strong demand. We have been at 100% capacity utilization for the last couple of quarters. We were able to pass along the price increase and do a little bit better. We were able to renegotiate some of our contracts, as I mentioned. We've also had tailwinds in the sense that I mentioned, some amount of it would be because of some amount of stock profit that we would have had from buying raw materials at a good rate back in December, January, February.
And then, of course, we saw February, March, April -- February and March price issue so partly a couple of reasons. But I'm sorry, I'm just asking Sachin this question again. Sachin, 21% is Q4 over Q4 in EBITDA per tonne increase. I don't think Q4 or Q3 would be that much, but anyway, if you are saying, so it must be true. I just wanted to recheck.
Q3 it is higher. It's 25%. I just missed it, yes.
Sorry, I think, Alisha, broadly, it's improved, I would say, but these are the reasons why, what I just mentioned.
Sure. And again, with respect to what you're saying even if crude does correct the EBITDA per tonne that we are currently enjoying, which is 50% higher Y-o-Y or 20% higher Q-o-Q. The absolute EBITDA per tonne you're confident of maintaining?
Yes, under the current context, yes. But as I said, the macro picture, at least for the next 1 or 2 quarters things look quite strong. But with inflation and the macro picture turning, I don't know what would happen maybe, but as I said, our endeavor would be to always improve on EBITDA per tonne.
And as we grow in our kind of business, the fixed costs are lower. So sometimes even the contribution per tonne may drop; when I say contribution, gross contribution per tonne; the EBITDA per tonne mix will go up. So yes, that would be our endeavor to keep improving on that.
Understood. And just coming back…
Ma'am, this is the operator. I would request to kindly join the queue for follow-up questions.
But I just finished my first.
Yes, go ahead, finish your last question. Yes, finish your last, yes.
With respect to the gross margin, which was in, I think, about 38%, is this number a sustainable number because it is on the higher end if you compare to the previous quarters. I just wanted to understand if -- or is this the benefit of some low cost inventory that we were carrying?
That is certainly benefit of low cost inventory.
Is it sustainable? I'm not sure. I'm not sure. It has been one of the highest numbers, I'm not sure. But as I said, EBITDA per tonne and EBITDA percentage, we try -- we'll try and keep it at this 14% to 17% range, so hopefully, it won't drop under 14%, but at least 13% to 17% and increase it further, hopefully.
We have the next question from the line of Kamlesh Kotak from AMSEC.
Congratulations, for a wonderful execution, sir. I have 2 points just to have your thoughts. One is, I don't know whether you spell it out or I missed it. How much of the growth is volume and value for this quarter out of the 48% growth that we reached, sir?
About half is because of volume. 20%-25% is about volume, yes.
Secondly, if I have to just dissect the strong growth that you have seen in the revenue as an extension of that, are we gaining market share from the players domestically or is it that the imports are getting prohibitive because of the global supplies in this location? What is driving the strong growth, is it either of the 2 factors?
I think it's both external and internal. As you said, certainly import has become harder for everyone and every one prefers local supply. So as far as the India market is concerned, which is almost 80% of our total turnover, we have certainly benefited from imports being more expensive due to higher shipping rate, higher retention charges and so on. Availability is also an issue in many cases. So we have certainly benefited, but that's -- so that's the external factor.
On the internal side, we have done so much work over the last 5 years, 6 years since we acquired Omnova Solutions India, in our Valia plant as well in our older business in Taloja. And so we have grown market share across the board and at this point, I'm fairly confident that across all the product categories that we have, almost all, I would say, we are #1 in India or a joint #1, let me put it this way, where market share is very close to somebody else.
So we're quite confident and this amount -- if you compare this to about 5, 6 years ago, I would say we are #1 in a few categories, but a strong #2 in most categories. So I think we have grown market share here in India, and we have also, obviously, INR 200-plus crores of our sales this year is from exports. Which, if you compare to a few years ago, has been a phenomenal growth, right, multiples of what we were [ this year ] maybe INR 20 crores, at that time we were only INR 20 crores, INR 30 crores, INR 30 crores, INR 40 crores maximum would have been our exports at that time.
Second point, sir, I just want your understanding on the ApcoBuild, though it's a small business, but how are we strategizing there, any vision statement in terms of the distribution ramp-up, geography expansion and how our product-based price vis-a-vis the competition, how the growth rate so if you can just give some more color on that?
Yes. Look, our main focus has been in ApcoBuild to focus on our strength of the product that we manufacture for the B2B customers. So obviously, since we are backward integrated, we do have some advantage there. Distribution scale up is really the challenge in the sort of B2C space where ApcoBuild is, and we just want to ensure we do slowly profitably, and of course, we have added some products that we are outsourcing and adding to our product portfolio, but we want to ensure that what we deliver to the customer is at a price point and the quality that's not available in the market anywhere. So we're focused on a few products. And as of now, we are still learning and growing in the western part of India.
Any growth directionally you are looking at in terms of the percentage growth or how you're going to…
Yes, look, we have grown at more than 100%, I think, 120% to 130% in this -- in the last financial year. And we -- the way we are adding, I think that growth should be sustainable even for the next financial year. And of course, as the value goes up, obviously, the percentage may start dropping but we feel pretty confident that the business model that we have, being backward integrated and focusing on a few products and a few specific niche applications around waterproofing, I think we feel pretty confident that over the next 2 years, we will grow geographically, there's a lot of scope to grow.
Wonderful. Any price differential you can highlight in…
Mr. Kotak, I would request you kindly join the queue for the follow-up questions.
We have the next question from the line of Anubhav Sahu from MC Research.
First of all, I wanted a little bit of clarity on the CapEx project. As much as I could understand, I think, they are 2 projects which you are looking for a completion by Q3. One is the 60,000 tonne capacity for XNBR plant, right, at Valia. And the second one is the latex plant capacity increased by around 20% in Taloja.
In terms of total tonnage it's 50,000 tonnes at Valia and about 10,000 tonnes at Taloja as of now.
Okay. It's 50,000. And the one for which we are waiting for EC is the NBR project, right?
Yes.
So as far as the latex capacity is concerned, your latest presentation mentioned 65,000 tonnes. So is it the result of debottlenecking you are discussing for the last year?
Yes, we have increased it from 55,000 to 65,000 tonnes.
Another question was on the sourcing of our imported raw materials. I think for us the key concern is styrene-acrylonitrile. So is there any change in sourcing these 2 materials because of the macro challenges, the latest -- happening in the European side, on the China side and which are our key sourcing partner countries, if you'd like to mention on styrene-acrylonitrile?
So styrene, I think, styrene most of it comes from within Southeast Asia and Middle East. So it doesn't come from very far. And we have not seen a major challenge for importing raw materials from these areas. Acrylonitrile, fortunately, is not -- I mean, we are a very -- compared to the rest of India, we are still a small importer. So while there have been challenges, delays coming in, our requirement is not significant compared to the rest of India, maybe in less than 3%, 4% of the total Indian imports, which goes into several different applications like ABS, acrylic fiber and so on. So in NBR and nitrile latex, only 30% is acrylonitrile, 70% is butadiene. So that -- while that has been a challenge fortunately, because our quantities are not very high, we've been okay so far. But you're right, I mean, overall, we are -- we spend a lot of time these days much more than we have in the past, looking at all our supply chain and making sure raw materials arrive on time and we have enough so that the production doesn't suffer.
And that probably, it also explains the spike in net working capital, probably you're ensuring that they are [ variability reviews ]?
Yes. I mean, look, it's a combination of overall all raw materials going up. Obviously, that caused net working capital to go up. Inventories are higher than what we have generally kept, debtors are higher because the prices are higher. So it's a combination of all the reasons that overall net working capital has gone up.
We have the next question from the line of [ Tej Kumar Pandya ], who is a shareholder.
My question is that the trade receivables so in 2021, it was INR 104 crores. And in '21-'22, it is INR 161 crores. As per my understanding, these trade recoverable are an important fact in -- as far as controlling cost as concerned. If you are able to reduce these trade recoverables, you'll be able to -- on your this thing outstanding and your payment for the loans, which you have taken, that will be further reduced. The capital cost would be reduced sharply, your commitment.
So [ Mr. Pandya ], the trade receivables have gone up by, as you said, about a little less than 60%. But if you see our total revenue has gone up also by, what is it, 70% for the year, I think let me just find the exact number. 77%. So if you see in percentage terms, actually, we have done better in terms of reducing our trade receivables, in terms of percentage terms because revenue has gone up by 77%, but trade receivables have gone up by maybe around 60%, percentages the exact number, trade receivables increase in terms of percentage. It's about 60% of that.
So while we understand and we have tried a little bit to reduce the credit period that we give to our customers. Unfortunately, we are also in a competitive market and a lot of the imports that come in give a large number of days of LC credit. So we are forced to walk along with the market as of now. Hopefully, that will change a little bit going forward. But we understand the issue, and we review it very regularly.
As long as you're aware of this issue and are taking care of it.
We are trying. Thank you.
We have the next question from the line of [ Deepak Shah from Shah Financial Services ].
Congrats for the good set of numbers. As usual, I’ll start with complain, this is just a small drawing that we have been paying the tax -- by way of taxes and to the tune of INR 33 crores on a capital base of about INR 11 crores. Plus, we have a dividend payout of about INR 25 crores, counting your last dividend, what you declared INR 3 per share, INR 3 plus INR 2, INR 5. So if I count, that is INR 25 crores.
So we are paying to the exchequer INR 33 crores plus INR 25 crores by way of dividend and that dividend becomes taxable to the majority of the investor. So can we not address this issue as every third company is going for a buyback or a buyback of shares or reduction of capital? So can you again not relook at the thing? Because that has nothing to do with your efficiency of the business.
I understand. Deepak, you've asked this question multiple times, over multiple phone calls and we are -- while you are saying every third company, I beg to defer with you. It is not every third company…
Good companies are -- of our category.
Yes, a few companies are doing it. But in our case, as I've mentioned before as well, that there is a cost to doing this buyback. And if the buyback is not successful, it's an illiquid stock, as you know, it's not a -- we're not as big a company as some of the other liquid companies that you have referred to in the past. And therefore, we didn't see any points of doing a buyback if we are only able to get about 0.5% or 1% of -- then it's not a successful buyback. So you're right, we can do it, but there's a cost to it, and it do make sense in the current context. We discuss it every 6 months and we see if it makes sense. As of now, in the current context, it does not make sense, and we would not be doing it.
Okay. But at the same time, if I have to draw your attention, the promoters also can participate, the percentage of equity will not go down. It is in lieu of dividend, right? The buyback of share is…
If the promoters participate and nobody else participates then what happens.
But still 80% goes through, it's a wonderful thing because the price will be always higher than the -- buyback price will be a little higher than the market price of last, say, 3, 4 months, 6 months. So it will be beneficial, it is in lieu of dividend?
I think let us -- Deepak bhai, you're a well-wisher and you've been a shareholder for a very long time, and we appreciate it. But let us agree to disagree on the -- because every year for the last 5 years, I think we've had the same discussion and conversation. You've discussed with many bankers, thanks for your suggestion, and we have been advised by many people not to do it for practical reasons. If something changes. We're not close to it. If something changes, we'll do it at the right time, but this is not the time for the company to do it. And we are very happy as a company to pay to the exchequer what is rightfully the exchequer's.
I know you may not agree with that but that's our philosophy and that's what we believe in.
That was the last question. I now hand it over to Mr. Sachin Karwa for closing comments.
Okay. I think Sachin is not available. I'm happy to do the closing comments. Maybe he dropped off. So thank you very much. Thank you again. It's been a very eventful year, a strong year for the company, and I would like to thank all the shareholders, analysts and everyone else who's on the call, investors. Thank you so much for your support. We appreciate it. We will continue to strive hard and work hard to keep improving the company's performance and growing from strength to strength. And of course, there will be some good times, some bad times and once again, we appreciate your support. We look forward to starting the new financial year, and we hope to continue this momentum going forward. Thank you very much.
Thank you, sir. On behalf of Valorem Advisors that concludes this conference. Thank you for joining us, and you may now disconnect your lines.