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Balaji Amines Ltd
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Ladies and gentlemen, good day, and welcome to the Balaji Amines Limited Q1 FY '21 Earnings Conference Call, hosted by Nuvama Wealth and Investment Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ranvir Singh from Nuvama Wealth and Investment Limited. Thank you, and over to you, sir.
Thank you, and a very good afternoon, and warm welcome to everyone. We have with us Mr. Ram Reddy, the Managing Director of Balaji Amines. Before handing it over to the management regarding today's call, I would like to read the safe harbor statement. Before -- this conference call contain forward-looking statements about the company, which are based on the belief of opinion and expectations as of today. Actual results may differ materially. These statements are not a guarantee of future performance and involve risks and uncertainties that is difficult to predict. The detailed safe harbor statement is given on Page 2 of the company's investor presentation, which has been uploaded on the stock exchange as well as on company's website. I will now hand over the conference to Mr. Ram Reddy, -- over to you, sir.
Thank you, Mr. Ranvir. A very good evening and extend a warm welcome on behalf of Balaji Amines Limited to all of the shareholders who have joined us for this con call to discuss the financial performance of the Q1 FY '24 and performance of the company. We appreciate your time and interest in our company's performance. Before we dive into the financial results, I would like to address a significant factor affecting the timely submission of our financial results for the quarter ended June 30, 2023. The delay is primarily due to our subsidiary, Balaji Specialty Chemicals Limited proposing to undertake its initial public offering of equity shares, which has been subsequently withdrawn.
The management team of Balaji Specialty Chemicals has been fully engaged in process which has temporarily hampered their availability to complete the preparation of financial results required for the consolidation of our company's financial statements for the same period. We apologize for any inconvenience this may have caused.
Moving on to the financial performance of Q1 FY '24. I hope everyone had an opportunity to go through the financial results and investor presentation, which have been uploaded on stock exchange and on our company's website. During the first quarter of the year, our company encountered an unparalleled array of hurdles with the specialty chemical industry. These challenges were predominantly a consequence of the swift contraction in global demand. This has been further exacerbated by an oversupply situation in China stemming from sluggish domestic demand and slowdown in several developed markets due to stockpiling.
These factors are impacted the offtake and sustenance of realization, especially in the specialty chemicals market. However, we firmly believe that this is a temporary setback and our long-term prospectus remain robust. Our performance, Q1 aligns with the industry's subdued trends. We are dedicated to maintaining a customer-centric approach, consistently delivering value.
This commitment underscores our dedication to serving our customers' needs effectively. Our medium- to long-term plans are progressing as intended. Our new projects are on track, and we are diligently working towards their successful completion without incurring any debt. Our strategic focus remains on identifying unique product opportunities, enhancing our product offerings and contributing to India's self-sufficiency objectives through the development of world-class manufacturing facilities. Our continued leadership in amines and their derivatives within India has been cornerstone of our success.
Additionally, our comprehensive portfolio of specialty chemicals sets us apart from competitors and reinforces our position as a reliable and innovative industry player. In summary, while the challenges of the first quarter were notable, we remain optimistic about our long-term prospectus. Our commitment to customer satisfaction, strategic initiatives and our strong market position in key areas will continue to drive our success as we navigate through these challenging times.
Now let me take you through the consolidated financial and operational performance. Revenue from operations for Q1 FY '24 stood at INR 469.32 crores as compared to INR 674.86 crores in Q1 FY '23. Total value stood at 26,820 metric tonnes tons for Q1 FY '24 as against 27,358 metric tonnes in Q1 FY '23.
EBITDA for Q1 FY '24 was INR 103.69 crores as compared to INR 219.48 crores in Q1 FY '23. EBITDA margin for Q1 FY '24 stood at 22.09% as against 32.52% in Q1 FY '23. PAT for Q1 FY '24 was INR 67.68 crore as compared to INR 148.04 crores in Q1 FY '23. Diluted EPS for Q1 FY '24 stood at INR 16.28 per equity share as against INR 37.95 in Q1 FY '23.
For Q1 FY '24, Amines volumes stood at 6,757 metric tonnes. Amines derivatives volumes stood at 8,288 metric tonnes and Specialty Chemicals volumes stood at 11,775 metric tonnes. On a stand-alone basis, we are a debt -- 0 debt company. Looking ahead, we have strategic CapEx plans in place to fuel our future growth journey.
We have initiated the CapEx of setting up the following plants, which will significantly contribute to our expansion. Number one, the N-Butylamines plant, which will have a capacity of 15,000 tonnes per annum, is progressing well. We anticipate commissioning the plant around December 2023.
The Methylamines plant with a capacity of 40,000 tonnes has initiated project implementation work. We expect this project to be commissioned around June 2024. In addition to these ongoing projects, we also have some exciting new projects in our pipeline. This includes the establishment of Di Methyl Ether with a capacity of 100,000 tonnes per annum, a new-age gas, which has application in various fields such as replacement of LPG for fuel and aerosol usage, demand of which is being met by imported LPG currently.
The company is working on various other applications and usage for replacing LPG. The project is likely to be commissioned by the end of financial year 2025, and DMA HCL plant with a capacity of 7,500 tonnes is likely to be commissioned by the end of H2 FY 2024.
These projects demonstrate our commitment to expanding our product portfolio and catering to the evolving needs of the customers. Our Unit-IV Phase 2 and 3 projects are shaping up as a world-class facility, set to begin phased production from the second half of financial '24 onwards. We are confident about stronger long-term opportunities.
We anticipate FY '25 to be marked by growth and opportunities and market conditions improve. The promising future is driven by India's potential on the global stage. We are well positioned to be a game-changer and a performance leader as market dynamics shift. Our inherent expense and competencies continue to guide us in navigating market complexities, propelling us towards greater excellence as a leader in amines and specialty chemicals. Now we can open the floor for question and answers. Thank you.
[Operator Instructions] The first question is from the line of [ Rajiv Rupani ], an Individual Investor.
Yes. Sir, when I had visited you for the factory plant visit on 30th June, so at that time, you had informed us that the Methylamines' new plant will be commissioned by March.
The DME new plant will be commissioned by July 24, and the N-Butylamines will be commissioned in 2, 3 months, by September. And in the presentation and the press release, there is an extension of date. So I mean, is there a delay and why, sir?
There is a 1 or 2 months delay because of the -- some of the equipments and some of the later shortage -- labor shortage. So now we have taken the stock of the situation and given the exact likely date, like before December, I think we'll be commissioning the Butylamines. Maybe 1 or 2 months is delayed what we said. And the same way, Methylamines will commence by June '24. And the DME will take further time, that is by end of the financial year. All are under construction. The both are under construction. One is under commissioning level. It's in the final stages.
Okay, sir. But DME is taking much more longer time, like more than 4, 5 months' time period, more...
Rajiv, one by one, we have to do it. One plant is commissioning now, because there are some regulatory issues are there. Some of the storages, we need the government approvals for filling the metal in the storage, like ammonia, like methylamine gas. Even for the DME also, we have to take methanol permission. So all those permissions now within the control. Basing on those dates, we have given these new rates.
Okay, sir. And 1 more thing. Now last time in this Unit IV for, we are supposed to do expansion of DMF and ACN, which was put on hold. So any update on that? And have the prices of these products improved in the last 2, 3 months?
DMF, I'll tell you what is happening. DMF, sometimes we are rating shortage of DMF. That's the reason we have taken DMA first. And for the DMF, we want to still give some time for the market to absorb. The new, latest development, we started exporting this product. We want to settle down full capacity at the present capacity, then we'll take. We are not scrapped that plan.
It is still there, but it has taken the backbench. And in regards of your Acetonitrile, because of the market condition, prices have gone to below raw material cost. Even today is also it is in the same situation. That's the reason we stopped the manufacturing. For the last -- 1, 1.5 quarter, we are not producing. We have some stocks. We are just salvaging those stocks. The moment it improves, because these -- the products which are -- looking the brighter market, we have taken into the front bench. The moment we finish this, then probably we may take that. In addition to these, we have many other projects in the pipeline, which we are going to declare in the subsequent time.
Okay. And then my next question was on the EBITDA margins and top line. Sir, you had guided us earlier that once all this expansion is complete in 2, 3 years, our top line will be about INR 4,000 crores. So are you sticking to that? And once all these expenses are complete in, let's say, 2, 3 years, what will be our consolidated EBITDA margins?
See, as I said, it is -- depends upon the raw material and finished goods product prices, both the prices have come down -- the reason is it's difficult to say, I said that as on the date the prices, if you take the reference of those prices, I'm still sticking to the INR 4,000 crores in the coming years. And EBITDA, as I said, it will be between 20% to 22% on a consolidated basis.
Okay. And my next question on Balaji Specialty. Now since we have withdrawn the IPO, could you give us more information about when is the debottlenecking complete, number one. Number two, I believe we have the 100 acres for expansion. So what are the products planned in that 100 acres? And you had also talked about 2, 3 years we'll double EDA production, an update on that? And what's the EDA price right now?
See, debottlenecking, we are taking -- probably next week, we are going to take the equipment -- 1 equipment has to come. Almost 90% of the equipment has reached to the plant, only 10%, which we are expecting in 1 week. Once that comes, we are going to take the shutdown for the -- 2, 3 weeks for finishing this debottlenecking activity where we are installing 1 or 2 additional columns whereby we get the -- increases capacity as well as the purity also will improve.
That is number one. Number two, I said that 2 opportunities, either the new products or doubling the capacity. See, until otherwise, this goes to the 100% capacity, market will be full support in the price point of view, we are not going to double the capacity. However, the new products, like as I said, the land allotment, actually, we are going to receive today.
Finally, we received the provisional letter where we pay 25% [ BMD ]. And we are expecting the final letter today as the [indiscernible] completed 2 days back only. Once that comes, probably within 7 days, 7 to 8 days, we are going to submit the details to the environmental clearance, for which the products like I will tell you a few products, hydrogen cyanide, sodium cyanide, EDTA, EDTA 2Na, sodium cyanide, dimethyl malonate, diethyl malonate, methyl cyanoacetate, triethyl orthoformate, trimethyl orthoformate. These are the products actually -- maybe 1 or 2 products, somebody must be doing or maybe all the products will be first time in the country. Some of the products actually listed in the PLI scheme by the government of India. So you will hear in coming quarters about the development of this or probably when you come after 2 quarters, you will see actual plants building at site.
Okay. And this all will be through internal accruals at BSC, Balaji Specialty...
Majority -- maybe we will be -- required some INR 100 crores, INR 200 crores, actually, if projects are not delayed. If they're delayed, then we'll be doing this from the intervals accruals. If we are doing faster installations, probably we may ask to temporarily some banks, maybe INR 100 crores, INR 120 crores from the borrowings from the bank. Maybe we may take help of the parent company.
We have the next question from the line of Kishan Gupta from CD Equisearch Private Limited.
Chandrakant here, sir. Sir, how has specialization in amines helped the company move through in these tough times? Can you just say -- like if there is any specialization regarding that?
See, since we are there in the market -- amines market, more than 25 years. Definitely, our cost-to-price is lower than anybody else. I can say probably -- in the world also, I can say what we have seen. We are in a position to export to the various parts of the world, unlike earlier days. Today, we are exporting even methylamines also to different, different parts of the world. In some of the places, samples approved. Earlier we were not having the, what you call, REACH registration for the methylamines.
Now we have taken the REACH registration for the methylamines and started exporting also. So because of our expertise, for the past 15, 20 years, our convention co-efficiencies are lower. That's the reason today we are in a position to stand in front of this tough competition.
Okay. So -- Yes, sir. And then like despite talks of global demand contraction, how can the company have more or less maintained the volumes this quarter?
See, volumes, I can say, because of the basket, we have the various products, [ Mr. Gupta ], if you see that we are going on adding the new capacities. And we -- in spite of the new capacities, we are not in a position to increase the volumes. Suppose if we go -- everything goes well, then you will see that increased capacity will reflect on the total volumes, that you will see in the coming quarters.
As I said in my initial comments, we have not taken the current situation is a permanent thing. We have not stopped our expansions. All the expansions, maybe 1 or 2 months here and there are progressing as decided earlier. And because we believe that this is a temporary period, maybe 1 quarter, 1.5 quarter. Maybe after 1 or 2 quarters, you will see the demand of all these products. When you come back to the original stage, then we will definitely get the advantages all these capacities created as of now.
Okay. Sir, have the company tried to benefit in any way from the sharp fall in raw material prices?
It's not like that because of last 1, 1.5 -- 1, 2 quarters back, the inventory has given very bad taste to all the industry, including our company. There's the reason we are going very optimistic inventories. That's the reason we will not get the -- neither the benefit, nor the loss for the inventories, right? It is very short. We will be having only 15, 20 days' raw materials, unlike earlier days.
But definitely, going forward, the prices have started increasing now. This last 2 weeks, we are seeing the methanol prices have gone up and the methylamines prices are likely to get the improvement, domestic and as well outside the country also.
The next question is from the line of Rohit Sinha from Sunidhi Securities.
First question on our Acetonitrile plant, as you said that costing is a little bit on the higher side right now, so we have stopped production. So just wanted to understand whether the demand still is there or demand has also taken a hit because of different factors. And when we are seeing any kind of improvement in terms of starting this plant?
See demand is still there. Because of the import outside country, the acetonitrile -- byproduct of acetonitrile from the outside country is still coming into the country. That's the reason today, we are not in a position. I think somebody has gone for the antidumping also, filed the case of the antidumping. If that comes, then probably we may think of restarting. And we -- as I said earlier, we have a plan of alternate technology, but we are still waiting, whether that alternate technology also will give us the sustainability in front of these lower prices from outside the country.
And we are also waiting how long the people from the outside country will make the losses and dump in the country? That is also another big question. The movement the situation improves, the plant is there, and we can start immediately.
Okay. Okay. And secondly, as we largely focus on most of the, I would say, import substitution products, so our export earlier was not that significant. But looking at the current scenario in the market where, I mean, Europe is in -- Europe, most of the chemical companies are looking to shut down or maybe reduce their production level. So how we are seeing the kind of opportunity building up for us in the export market? And do we have that kind of plan for expanding sizes in our existing portfolio or introducing any new product there, especially for the export market?
Definitely. Definitely, we are trying to encash the China Plus opportunities. As I said for the earlier question, we -- the products which we have never exported, we have taken the REACH registration, we started exporting. Like DMF, we used to sell every time in the domestic market itself. Now we started exporting the DMF outside the country where there's an opportunity, where the people stopped buying from with China, in some of the developed countries like U.S.A.
We just started looking at those markets. And all other products, which we have not taken the REACH earlier. Now we have taken the REACH registration. Probably in coming 2 quarters, we will see the increments in the exports when you compare to the earlier quarters in addition to the new products.
Okay. Okay. So roughly, I mean, what is the export domestic mix right now for us and where we would be targeting maybe down the line 1 year or 2 years?
We are there, see -- 85-15 if you see the stand-alone basis. And in the days earlier year, we have done consolidated basis, even [ 25-70 ] also have done because we cannot take that, that particular year was a bit different when you compare to the normal market situation. But going forward, our target is to take minimum 20%, 22% of the exports and balance 78% to 80% should be the domestic.
The reason why I'm telling the 20%, in our type of industry, if I do more than 15% to 18% exports, then I will get the natural hedge for the imports, if any, we import any of the raw material. So that's the reason we are targeting that minimum we should do it, 20%, 22%. And we will achieve in coming 2, 3 quarters.
Okay, sir. Okay. Sir, 1 last question. I mean, looking at our revenue profile from last 5, 6 quarters. And I think from peak of March '22, the top line has come down consistently. So it was -- obviously, the prices have corrected significantly in the recent time. And now as we are talking about the bottoming out of [ Center ] prices, are we looking at -- I mean, as a company, we also are looking at the same situation that the situation looks to be on the bottom side and no further downside maybe looking -- maybe somewhere around we should be seeing on a positive side only?
Mr. Rohit, we don't see because in the '21, '22, the year was a special year where some of the products which are sold at INR 170, which were sold in those periods at INR 500. That was a special period, we cannot compare that. But yes, definitely, the current situation has bottomed up. I don't think the prices will go further down.
We see from here onwards, there should be some improvement. And maybe in coming 1 or 2 quarters, prices should be stable at normal level from these bottoms.
Okay. So margin profile should also, I think...
Please rejoin the question queue for follow-up questions. Thank you.
We have the next question from the line of Aman Madrecha from Augmenta Asset Managers.
Could you throw some light on like how has been the DMF utilization over the last 6 months? And also how has been the products doing -- the new products doing like the DMC and the propylene glycol? Are we able to like -- are we able to produce this product on a full scale? Or are we still able -- still not able to find right customer mix on these new products like the DMC and the propylene glycol?
See, DMF -- yes, you are right. There was 2 types of problems we face: one problem, sometimes prices. When there's a price, we were not having the sufficient DMA. These are the 2 types of the problems we are facing. That's the reason we are operating at some 44% capacity level. Once we commission this Di-Methyl Amine's plant, at least 1 problem we solve that the shortage of the DMA will not be there because the additional capacity of the DMA will be coming into the line.
And secondly, the other thing because of the market pricing, we target -- we are targeting now the outside country because the outside company prices, we have seen the -- better than the domestic. Actually dumping is happening in the country -- unfortunately, we are not getting government support for the antidumping.
So the reason we're just looking outside the country. Europe, we started supplying. U.S.A., we will be supplying this quarter onwards. And Saudi, we exported a few quantities. So definitely, going forward, we should see more than 60%, 70% capacity utilizing for the DMF.
As regards to DMC and propylene glycol. See DMC, we were hoping that the lithium battery manufacturers will start at least 2 to 2.5 quarters back only they were supposed to start, but very unfortunately, no company has actually started at the back list. That is one.
Second thing the prices at China, like other products, for these products also, they created huge capacities and actually, they are selling in the losses. So that's the reason we are in a position to cater whatever domestic availability, we are giving around 25% to 30% capacity we are earning. And to increase this to take it further, we have started -- we've already taken the REACH registration for these products also. We started giving the marketing outside the country like Europe, we are doing an couple of ISO tanks. The moment we get the full approvals, then probably they hear also, we will go to 50% to 60% in the coming quarters.
Okay. And sir, on the -- as you were mentioning that we'll be exporting -- we are looking to export the DMF with the commissioning of the DMA capacity. But over the past years, we have been facing dumping from the countries like Saudi Arabia and all these countries only. So where is the problem, right? And on one side, we are facing the problem for the dumping from the Saudi Arabian countries. And on the other side, we are claiming that [Technical Difficulty]
So Saudi Arabian, they have -- they are dumping only in India. In their own country, they are selling at a much higher price. That's the reason we targeted. For information, this month we sold to 2 ISO tanks to Saudi Arabia at much higher price. So now we just started going to the outside country, where those people are having the good prices and dumping in our country. We are also going outside only, at least to give them the competition so that they will understand that dumping outside, how it will affect to the everyone.
So USA is also the same play. In USA, they are having good prices only in the domestic market to be very unfortunate for us. We are having the both countries like Saudi Arabia and China is dumping with the raw material prices.
And so sir, like maybe we can say like INR 100 to INR 120 could be a viable price for exports for DMS?
Even INR 90, INR 90 is viable. INR 90, INR 95 also we can sell because we get some additional export benefits for the duty-free raw material. All these things will add, even if we sell it INR 90, INR 95, also it will be viable for us. So that's the reason we started going out.
And sir, on the exports of the DMS, so like we have some visibility like by the end of FY '24 or early half of FY '25, we'll be able to utilize the capacity to the tune of 60%, 70% on the DMS side?
That is correct. We are targeting minimum 60% to 70%.
And on the DMC and the propylene glycol side also, we are targeting during the same time.
Yes. Coming -- I mean, now we are at 20%, 25% level. We are targeting before end of this year, we should minimum do 50% to 60% capacity of these 2 products. And other products like ethylamine, which was a greenfield project, which was [indiscernible] of these 2 products and before starting this, we started that ethylamine. That is doing more than 90% capacity.
Okay. And sir, one more thing on this thing. Like for example, as we've seen during the past like DMF, we have introduced DMF, but we have struggled for commissioning that. And currently, as we've introduced DMC also, we are facing some issues. So as we are coming up with a new product that is N-Butylamine. So we know that domestic demand is around 8,000 metric tonnes and we are the only producers.
So are we confident that as we start the plant and in a year or so, we'll be able to [ lead ] that plant, there won't be any issues of utilizing the N-Butylamine plant? Just your thoughts on the same.
Yes, definitely. See, whenever we plan the plants, we will just look at the global capacities. And also considerably domestic growth, like today is the 8,000 tonnes, maybe in coming 2 years, it should become 12,000 to 13,000 tonnes and we are going for the capacity of 15,000 tonnes. And there will be some market outside country also, maybe 2,000 to 3,000 tonnes.
And we cannot expect like what we are seeing in the DMC PG. Initially, out of 15,000 tonnes, definitely, we will sell 8,000 to 9,000 tonnes in the first year of operation. But going forward, we will definitely see in the coming 1 or 2 years. Whenever -- as I said, we have to see the -- consider further 4,5 years' requirement of the various parts of the world. That's the reason we have taken 15,000 tonnes capacity. Going forward, we will see in the coming 2 years, it will go to the 100% capacity.
Okay. Sir, my whole goal is to understand like, for example...
We request you to please rejoin the queue for follow-up questions. We have the next question from the line of Richa Agarwal from Equitymaster.
I wanted to understand this demand and the oversupply situation a little bit better. So what is your outlook? How much time do you think the situation is likely to persist or await us? And when you say that the perhaps worst is already here, the prices have bottomed out. What gives you that confidence, if you could just let us -- take us through the demand and supply situation and how it is impacting the ...?
Richa Ji, you're right. We have seen all the bad time like prices lower and even the quantities volumes also lower. Now the confidence why we are getting more is the quantities lifting improvement has already started. Only thing is price, we are still -- because people are habituated to the lower price, you are well aware that from the lower price to higher price, it will take longer time. Making higher price to lower, it will be done very faster.
So when we see the higher quantities started lifting, we see the coming at least 1, 2 quarters it should come to the normal level of the volume point of view. Even price point of view also, it should come to the stable normal levels in the coming 2 quarters.
Okay. And sir, the capacity expansions that we are doing, my understanding is that we were going from 231,000 to 346,000 entry kind of capacity. What would be the current capacity and utilization? And of this, how much is actually going to the end market? And what kind of capacity or production is being used captively if you could talk a little bit about that?
See, Richa Ji, till now what has happened in the methylamines, ethylamines, we were utilizing more than 60% to 70% in-house only. That's the reason we were not in position. That's the reason we have gone for the expansion. One is ethylamine, we have done the bigger capacity even though we're having a small capacity. And Methyl also, we are talking to the additional 40,000 tonnes with region where we can sell some quantities in the market.
And today, we have 231,000 tonnes capacity, all together like some of the products like the NMP out 33,000 tonnes where we are doing only 15,000, 16,000 tonnes. And new capacities which we are talking, 160,000 tonnes like including the Dimethyl Ether which is 100,000 tonnes. I feel that this answer is for everybody who's listening to this. I feel, it's my personal view, the Dimethyl Ether should be big game changer for the company. The reason is if I calculate at least 1 district, 2 district itself is more than 60,000, 70,000 tonnes consumption of the LPGs there.
So we are talking about the -- if I take the -- at one region, at least Western Maharashtra, or part of the South market, if I take, which is not sufficient even 20%, 30% of their consumption. So going forward, today, we are running at some of the plants at 80%, 90%, and some of the plans at 30% to take the overall average between 60% to 70% of the total installed capacity and a net 162,000 tonnes, which I was saying that total coming 2 years, we go for the revenue point of view of INR 4,000 crores. While considering these capacities, we are hoping that we will do minimum INR 4000 crores on the stable, normal pricing levels.
Right. So I mean, 2 years kind of time period, I mean, do you have that confidence that the situation will normalize or freeze pricing pressure? I mean they will improve but still ...
Definitely.
Okay. And sir, this product, I think DME that you're talking about as an LPG substitute. So from the end user point perspective, is it shortage of LPG or is it the pricing differential that will encourage them to shift from, let's say, LPG to this product, if you could talk about that?
Both are there, both are there, actually, we were in touch with the Government of India for meeting for past 1, 1.5 years, we are corresponding with the government. Recently, that is about a month back, government has already initiated that in all aspects, the LPG companies should mix 25% of this product into the LPG, which you will see in the coming 2, 3 weeks, we should see the order should come out.
They've already given this instruction to The Bureau of Indian Standards to check the storages used like LPG storages can be used for the DM and all. In our point of view, we have seen in China, they are already using more than 300,000, 400,000 tonnes, they are using, they are mixing in the LPG. They are mixing more than 30%, 40% in China. So definitely, we -- looking into all these situations, we see that there will be bright future for this product.
The next question is from the line of Harsh from Marcellus. [Operator Instructions] As there is no response from the line of the current participant in the queue, we will move on to the next question, which will be from the line of Dashil Javeri from Crown Capital.
I hope I am audible?
Yes. Go ahead.
So sir, I just wanted to ask like as the previous participant, you said maybe around INR 4,000 crores revenue, you can do on stable raw material prices. But as a layman who's not in the industry, what part should we be able to track so that we know that the prices have started correcting? Or what do you see maybe coming quarters or somewhere like something that would be easier for us to be able to check up on or maybe what do you see that maybe the start of calendar year FY '24, things will become normal? So a bit color or flavor along those lines, sir.
Yes, Mr. Darshil, you see maybe by end of this current financial year, the last quarter this financial year, we are expecting the prices should go to the normal level. It may not go to the levels of '21, '22 because there will be special period, but normal level. For example, that product today, we are talking Ethylamines. Last year, it went up to INR 500. Today, it is INR 160, INR 170.
I'm talking about, it should be somewhere INR 200, INR 225 should be the normal level. Same way in methylamines on 100% basis, earlier, we sold up to INR 150, INR 200 also. But normal level, we feel it should be somewhere INR 100, which is today at INR 85, INR 90.
If this situation takes place, I'm talking about only 15%, 20% improvement in the current prices. If that takes place, yes, we are confident that would be additional capacities what we are creating and old plants running at reasonably higher capacities, we should be definitely in a position to reach INR 4,000 crores level of revenues in coming 2 years.
So that's very good to know, sir. And sir, I also wanted to know any other risks that you see that maybe that can hamper or is the worst behind us like any other that we might not understand or something that you see that can also again put a speed bump?
And just want to know, sir, so maybe this year, can we consider a bit flattish in terms of profit, and next year, we'll have maybe nonlinear growth in profit that can compensate for this year?
I think these 2 quarters, 1 quarter, we got some bitter taste, on this current quarter also may go a little. And the next 2 quarters, that is 3 and 4 quarters, if they do greater than the normal, then averaging out, it should be flat, but not sluggish, as you said. This is my personal view. I'm telling you.
Other things like bottom prices bottoming up, which you are telling, yes, what -- we have seen the total bottom has already happened. I don't think the countries like China will go further in losses. And some of the plants we have already seen, who are doing lower prices in the last 3, 4 quarters, with 1 or 2 plants already closed, especially in the BDO,1,4-Butanediol based products, they already closed. So like that, how long they will do once they come to the realization, once they come to the real thing in the market. And other thing like U.S. already stopped taking from the China that advantage as an alternate to India will get. Looking into all these points, I feel it should be improved in coming 2 quarters.
Sir, one last question, if I may, sir. So sir, with this, sir, FY '25, can we assume maybe we might be able to do INR 3,000 crores revenue and then INR 4,000 crores, our 2 years plan target is about FY '26 or FY '25, that just wanted to clarify that, sir, in the normal year scenario?
'26, with the current year, you should not consider. yes, you are right, the '25, that is '24 '25, you should touch the INR 3,000 crores, then '26 '27, we should be in a position to touch INR 4,000 crores.
we have the next question from the line of Harsh from Marcellus.
Am I audible?
You are audible.
Yes.
Yes. Sir, my question is basically that we have been hearing for some time now that China is setting up some large capacities. So I just want to know that are you noticing some large capacities being set up in our products, methyl, ethyl, acetonitrile?
Can you repeat your question, I didn't understand?
So basically, we have been knowing that China is setting up some large capacities, which will be coming online sometime in late 2023 or in 2024. And these capacities are across the whole bunch of products. So just want to know from you that you are hearing as well about some capacity, which will come online in any of our products that is methylamine, ethylamine or acetonitrile or any of our specialty candidates?
Fortunately, I am not seeing any new capacities coming in China for the methylamines and ethylamines. Ethylamines, they're already in short of ethanol. They are depending on the USA, which is -- which has become a little tight. So that's the reason I don't think ethylamine, they will come. And methylamine, it is licensed with their country. If they want to export, they need to take the license from the Government of China. This is the reason many of the companies are not thinking of it. If anything comes, maybe smaller capacity. But for the methylamine, there's entire world is open. So I don't think that will impact at least for the methylamine and ethylamine.
Yes, like acetonitrile, if they go like this dumping, it will be definitely impact on the domestic companies for the acetonitrile, but not on the methylamine and ethylamine.
Okay. And are you hearing any new capacity coming up for acetonitrile in China?
That also we are not seeing, but existing they have huge capacities. Like acrylonitrile capacities are coming up, so existing acrylonitrile, and acrylonitrile, as I said earlier, that new technology, yes, there one plant is coming up with a new technology, which we were declared that we will be coming up with a new technology. Similar technology, I heard somebody is coming with China. If that comes into the pipeline, probably that gives more tough competition for the acrylonitrile in domestic market.
The next question is from the line of Rajiv Rupani, an Individual Investor.
I had a follow-up question on DMC. Sir, earlier, you had talked about DMC blending in diesel. So could you throw some light on that? And also, I'm reading about Amara Raja batteries and Exide forming up plans for lithium ion battery. So are we in talks with them? And by when do you think they will start their plants?
We are very, very much in advance with both the companies, discussed. In one of the companies, have sent samples also, not only for the DMC, they may not use much of DMC, but they will be using more of NMP. We were discussing more on the N-Methylpyrrolidone and part of the DMC also. So the moment they start, definitely, we are at first in touch with them for the raw materials for both the companies.
And DMC blending in diesel?
Blending in diesel, yes, we are still corresponding with the Government of India. We have done some trial with one of our vehicles with the automotive research center in Pune, that is in [indiscernible] and that has given good results. But still government has to give clearance for that. Before that, they give the more positive on this Dimethyl Ether. So that is the reason we are working on an with Dimethyl Ether. But DMC, they are not fully confident with the mixing in the diesel. In China, they are using, in many places, they are using it.
Okay. Okay. That was helpful. And DMC, you had last time intimated that 3 more [indiscernible] are planned and product is ready. So any update on that?
No, no. Until otherwise, this battery starts, battery manufacture starts, we are not going to touch that. We have the technology, the things are ready at table. The moment they start manufacturing this lithium battery, I do not know how many people will start for the full up manufacturing, how many will go for the N-1. Many people will bring an assembled and they say they are manufacturers. We do not know 100% until otherwise they start buying from us. So we will have to wait to kickstart their manufacturing facilities.
The next question is from the line of Aman Madrecha from Augmenta Asset Managers.
Actually I missed the first half of the call, so could you please highlight why was the BSCL IPO called off?
See, that is taken by the Balaji Speciality Board because of the current market situation. Valuation -- expected valuation did not come and we were not having -- market was not favored. So that's the reason I think they withhold it, probably they will take the next course of action in coming quarters and which you will be informed of.
Okay. And also, sir, what has happened with the Board now, who is in Balaji Speciality Chemicals and who's in Balaji Amines?
You can see on the call on the website here. But still, I can tell you, like in Balaji Amines, Ande Prathap Reddy is there, D Ram Reddy, myself, Ande Srinivas Reddy. These are the -- N Rajeshwar Reddy, these 4 are the executive directors. And same equally 4 independent directors like Dr. Suhasini Shah is there, and Dr. Uma Pradhan is there. And Mr. Adabala Seshagiri Rao is there, Mr. R. Mohan Kumar. These are the 4 independent directors from core Executive Director of the Balaji Amines Limited.
And Balaji Speciality Chemicals, again, Mr. Prathap Reddy will be there and Mr. Rajeshwar Reddy is the Managing Director of the company; and Mr. Hemanth Reddy will be the whole-time director for the company. And the independent director, one is Mr. Rajendra Tapadiya and other director is Amarender Reddy is there as an independent director. Again Dr. Suhasini Shah is common in both the companies. She is the independent director.
Ladies and gentlemen, we will take one last question from the line of Rohit Sinha from Sunidhi Securities.
Just 1 thing, as we are also anticipating from recovery. And since we have, I think, close to 50% exposure towards pharma...
Mr. Rohit, can you speak out clearly?
Yes, yes, sorry. So as we are talking about some kind of, you can say, recovery from the second half, and we have close to 50% exposure in Pharma and roughly around 25% -- 26% in the agro side. So where initial you can say recovery signs are visible as of now and where we should be keeping a close eye on?
Yes. Thank you. See, as I am sailing, you are all also sailing in the same boat. We have seen some improvements in the AP and pharma market where our exposure is more than 55% to 60%. And agrochemical also, as I said, the improvement we have seen, the quantities have started moving more than earlier quarters. Only thing is prices we will have to chase to improving the margins and prices in the coming weeks and months. Probably in 4, 5 weeks, we should be in a position to convince the customer end for bringing back to the normal levels, prices as raw materials also are going up.
So we look forward in coming 2 quarters. But definitely by the end of the year, we all should cheer up and talk about the improvement in the total market, raw materials as well as finished products.
I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you. Thank you very much. Thank you for taking off time and participating in our conference call. The overall outlook for Indian for pharmaceutical companies and agrochemicals is expected to improve further as companies in Western economies support the China Plus 1 policy and the pharmaceutical and agrochemical industries account for the vast majority of our end user clients with needs for aliphatic amines and specialty chemicals.
Given the strong correlation between demand for our products and demand for the products from our end user industry, we anticipate a strong growth potential for our company in the coming years. At the same time, we are constantly working to expand and diversify our product portfolio in order to address more segments of our end user markets. And thank you once again to all shareholders, stakeholders who are showing confidence on our company even at the bad times. So you stood with us. I'm really thankful to you all. Thank you very much.
Thank you. On behalf of Nuvama Wealth and Investment Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.