Balaji Amines Ltd
NSE:BALAMINES
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Balaji Amines Ltd
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Ladies and gentlemen, good day, and welcome to Balaji Amines Limited Q4 FY '22 Earnings Conference Call hosted by PhillipCapital (India) Pvt. Ltd.
This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Apurva Shah from PhillipCapital. Thank you, and over to you, sir.
Thank you, Lisan. On behalf of PhillipCapital (India) Pvt. Ltd, I welcome all of you to the Q4 FY '22 earnings conference call of Balaji Amines Limited. We have with us today Mr. Ram Reddy, Promoter and Managing Director of Balaji Amines. I request Ram sir for his opening remarks, post which we will open the floor for Q&A. Thank you, and over to you, sir.
Thank you. Thank you. Ladies and gentlemen, a very good evening to all of you, and welcome to the conference call to discuss the Q4 FY '22 financial performance of our company, Balaji Amines Limited. I hope you have gone -- got a chance to go through the press release and the financial statements submitted to the stock exchanges and uploaded on our website.
First, kindly let me take you through the consolidated financial and operational performance for Q4 FY '22. We are glad to have generated respectable quarterly results in an environment where the chemical industry is facing severe margin challenges due to rising raw material prices and other costs. We recorded 87% growth in total revenue, which stood at INR 781 crores in Q4 FY '22 as against INR 418 crore in the corresponding quarter of previous year. Total volume stood at 33,780 metric tons for Q4 FY '22, up by 18.3% as against 28,547 MT in Q4 FY '21.
For Q4 FY '22, volumes of the basic amines stood at 7,284 metric tons. Amine derivatives volumes stood at 9,411 metric tons and other specialty chemicals stood at 17,085 metric tons. Greater volume offtake as a result of increased capacity utilization of our DMF and new ethylamine plants contributed to the rise in revenue.
EBITDA was up by 50%, which came in at INR 199 crore in Q4 FY '22 as compared to INR 133 crore in the same period last year, with EBITDA margin at 25.50% in Q4 FY '22 as compared to 31.73% in the same period last year. Despite the challenging inflationary environment, we were able to restrict the fall in our operating margins due to improved operating leverage from increased volume offtake and stronger price realization, especially for product of our subsidiary company. We expect operating margins to inch upwards in coming quarters and that of moderation in prices of key raw materials, favorable product pricing and better product mix going ahead.
Profit after tax recorded an increase of 47% at INR 131 crore in the current quarter under review as against INR 89 crore in Q4 FY '21. And PAT margin stood at 16.8% in Q4 FY '22 as against to 21.3% in Q4 FY '21. Diluted EPS for Q4 FY '22 stood at INR 33.56 per equity share as compared to INR 26.08 per equity share in Q4 FY '21.
Now coming to our consolidated performance for FY '22. Revenue from operations in FY '22 stood at INR 2,328 crore, up by 77% as compared to INR 1,318 crore in FY '21. EBITDA witnessed a growth of 68% from INR 379 crore in FY '21 to INR 637 crore in FY '22.
Given the inflationary conditions, our EBITDA margin narrowed by 141 basis points to 27.4% from 28.8% in FY '21. PAT for FY '22 witnessed a jump of 72% to INR 418 crore from INR 244 crore in FY '21. Diluted EPS for FY '22 stood at INR 113.7 per equity share as compared to INR 73.52 per equity share in FY '21.
Total volume stood at 115,349 metric tons for FY '22 as against 106,057 metric tons in FY '21, recording a jump of 9% for FY '22. Volumes of basic amines stood at 24,999 metric tons. Amines derivatives volumes stood at 37,170 metric tons, and other specialty chemicals stood at 53,180 metric tons. Our subsidiary company, Balaji Specialty Chemicals Limited, continued to see strong demand as well as robust price realization. We logged sales volume of 4,903 metric tons in Q4 FY '22 at our subsidiary plant as against 3,660 metric tons in the same quarter last year and 3,887 metric tons in Q3 FY '22. We have recorded the capacity utilization of about 56% in FY '22.
[indiscernible] for raw material required for manufacturing products, value-added products, pharmaceutical application, the manufacturing products of the subsidiary plant continue to remain a major challenge in FY '22. However, the supply bottlenecks have eased, and we expect to operate the subsidiary plant at 70% to 80% capacity in FY '23. Non-agrochemical clients constituted about 50% of total sales of ethylenediamine in FY '22 from over 10% in earlier quarters of operations. We have increased the share of exports from our subsidiary plant from 15% in H1 FY '22 to 25% in FY '22. And our endeavor is to increase it to about 30% going forward. We anticipate achieving annual turnover of about INR 700 crores to INR 750 crores in FY '23, and we expect the margins to sustain at the current [ EBITDA ] levels at the subsidiary level.
The construction of new plant for dimethyl carbonate in Phase 1 of Greenfield Project Unit IV is almost complete, and we hope to commence operations by the end of June 2022. With a few tweak to the manufacturing process, this plant will be able to produce around 15,000 tons of DMC per year. The company would be India's only manufacturer of this product, with annual domestic demand currently ranging from 8,000 to 9,000 tons, which is currently entirely met by imports.
DMC, a major application in the manufacturing of polycarbonate, it is also used as a major solvent in the production of lithium batteries, the consumption of which will exponentially grow in India backed by various government incentives. At the same time, we believe there is a potential for DMC to be exported to international markets. Additionally, this plant will also produce 15,000 tons of propylene glycol per year, which has major application in pharmaceutical and agrochemical industries. This facility will be able to generate revenues of INR 300 crores to INR 400 crores per year at full capacity utilization. We expect our DMC facility to reach capacity utilization about 60% in the current financial year '23.
The demand of DMF continues to remain healthy. And with the completion of the bottlenecking exercise, the capacity utilization of this plant has increased substantially, the full impact of which is likely to be visible in FY '23. In Q4 FY '22, the DMF plant capacity utilization was around 65%. We expect the capacity utilization of DMF plant to increase from about 42% in FY '22 to 70% to 80% in FY '23.
In terms of our future expansion goals, we plan to begin CapEx under Phase 2 of our 90-acre Greenfield project for the installation of the following plants in FY '23 and FY '24. Number one is the new N-Butylamine plant with a capacity of 15,000 tons per annum; number two, acetonitrile plant with a capacity of 15,000 tons; number three, methylamine plant with a capacity of 40,000 tons; and DMF plant with a capacity of 30,000 tons. The total CapEx for FY '23 and FY '24 will be about INR 300 crores to INR 400 crores. The production at the above plants will commence between mid-FY '24 and till end of FY '25.
N-Butylamine is a new product that will be introduced to our already diverse product offerings. An N-Butylamine is used -- is an ingredient in the manufacturing of pharmaceuticals, APIs, water treatment chemicals, pesticides and emulsifiers. Annual domestic demand is estimated to be at 8,000 tons, which is currently met entirely by imports.
We'll manufacture acetonitrile at our new facility using a new improved technology, which will provide us the cost advantage and allow us to address the impact of increased acetic acid prices, enabling us to maintain healthy operating margins. By the mid of FY '24, this plant should be operational.
Methylamine is a key raw material and the base product for value-added derivatives required by pharmaceutical and other chemical companies. We are currently the market leader in methylamine production in India, and 80% our methylamines production is captively used for manufacture of value-added products.
Pharmaceutical application segment and agrochemicals are expected to drive significant demand for methylamines in India as well as global markets. To meet our increasing capital requirements, we plan to set up a separate plant for methylamines with capacity of 40,000 tons per annum, for which the company has already received environmental clearances.
We aim to construct a separate facility for DMF with a capacity of 30,000 metric tons under Phase 2 expansion based on the existing scenario, which suggests the growth of API and pharmaceutical industries under the Atmanirbhar Bharat package. The annual total domestic demand for DMF in India is about 90,000 tons, of which about 70,000 tons is met by imports. In India, demand of DMF is increasing at the rate of 7% to 10% per year.
In the coming quarters, we expect to see an improvement in capacity utilization of our legacy products due to easier access to raw materials for matching products at our clients' end. In FY '22, '23, we expect substantial improvement in volume offtake from improved capacity utilization of our ethylamine and DMF and acetonitrile plants as well as capacity additions on account of our new DMC plant.
That's all from our side. We now leave the floor open for question and answers.
[Operator Instructions] The first question is from the line of Dhaval Shah from Svan Investment.
Congratulations on a great set of numbers. Sir, reiterating some of...
Mr. Shah, we are not able to hear you clearly. Your voice is sounding very muffled.
Okay. Hello? Is it fine now?
Sir, can we use the handset mode while speaking and not the speaker phone?
Okay. I'll just come back in the [indiscernible]. I'll come back in the queue.
We move on to the next question. That is from the line of [ Dhagash Shah ] from Motilal Oswal.
So which are the products which are facing raw material supply issues?
That is only the subsidiary plant. One is the one in monoethanolamine. I think now it started easing out. I think in the coming quarters, we should be in a position to get sufficient required raw material. And the other one is ammonia. Prices have gone up, but we are getting -- availability has become easy now.
Okay. And so this -- the revenues for the subsidiary have been close to INR 500 crore, so -- and you still mentioned that next year, the capacity expansion would increase. So is the understanding correct that the prices would go down as raw material costs moderate?
It may be. You see in present, we have almost INR 900 crores and the capacity up 56%, right? So if we reach 70% to 80%, so we are saying we're between INR 700 crores to INR 750 crores. And then there may be a correction of some 5% to 7% of the prices also. All put together, we have given the guidance of INR 700 crores to INR 750 crores.
The next question is from the line of Rohit Nagraj from Emkay Global.
Congrats on a good set of numbers for FY '22. Sir, the first question is on methanol. How has been the availability amid the challenges in terms of gas price increases which are happening in Europe? So are we facing any challenges from pricing as well as availability perspective?
See, methanol is not -- anyway, it is not sourced from Europe. And availability is there, only the price was the issue. But I think the price is also -- we feel that it is stabilized around INR 30, INR 31. We have seen last 3 months, we are seeing this price below INR 28 and up to INR 32, INR 33. I think we should feel that it is stabilized at INR 30-plus level.
Right. Sir, just similar question on ammonia. The prices have increased, and have we been able to pass it on completely to the customers? And are there any issues in terms of volume offtake because of the increased prices of our products?
We are -- yes, we are in a position to pass on. Actually, last quarter, there was an impact on the margin because of -- it is the transit period for the passing on the increments. Now it is completed, now we are in a position to passing on this and the availability also became a little stable now.
Right. Got it. Second question is in terms of operational parameters. So how will we place from the [ HSE ] perspective that we are producing most of the [indiscernible]? And given the temperature conditions and we've been hearing a lot of incidents happening in the industry, how are we placed for our facilities from the safety environment perspective?
Thank you. Thank you for your valid question. And yes, we are much alert, not only now, we are seeing -- very unfortunate that seen a couple of incidents in the industry. And we are -- right from the initial still, we have a number of controls in various places in the plants. And definitely, we have all the systems in place for the safety point of view.
Secondly, in the environmental point of view, yes, as we said earlier, our -- all the sites are 0 discharge plants. So we are maintaining to that, and we can say that we can maintain forever these type of things. Normally, whenever we select the products, we look all these points. One is the safety and second is the environment. It is the most important things for us while operating the plants.
The next question is from the line of Dhaval Shah from Svan Investments.
Sir, a question on acetonitrile. So Ineos Nitriles is expanding acetonitrile capacity in Germany by 15,000 tonnes. And they -- yes, so -- and the management says that they want to get the acetonitrile production back to Europe, which has shifted to Asia sometime back. So what are your thoughts on this? Does it create overcapacity kind of situation in the global market? And just your thoughts because you're also expanding on acetonitrile.
Yes, yes. See, growth is also there. We must realize that what is happening around world from growth point of view, that is number one. Number two, I think I -- earlier also I said, earlier, people used to take this final solvent while doing the API. Now the people have started because we -- its availability and it's user-friendly, and normally, they call it a rich solvent. There is a great possibility to have the rapid growth in the solvent of the API industry. If any new molecule comes, definitely someone will prefer to go acetonitrile instead of going for the -- any other cheaper solvent.
So secondly, as regards our capacity, why we are coming. As I said, we have a totally different technology. And we will have the price advantage, definitely. We don't see the current competition and all those things. We will be definitely comfortable with our price once we start this new technology, so the reason we are not very keen to expand the whole plant. We are sticking to that only 12x capacity. We're continuing that until there is new plant. We want to test this new technology. We want to prove ourselves with a very competitive pricing. Then we will think of any new expansions on that.
Okay. Great, sir. Sir, secondly, now in terms of our volume growth for FY '23 and FY '24, this 1 lakh 50,000 tons is what we remain confident for the next year?
It should be -- well under 115,000 is the actual figures [indiscernible] like we are talking about the DMF full capacity utilization in the coming years. Methylamine, we have seen only 9 months in the past year. Current year, we will see full capacity. And DMC, propylene glycol, both are coming in the stream. So definitely there we will see better -- more than around 15%. We should see like 10% to 15% growth in this.
Yes. Okay. Okay. And sir, how is the trend in terms of the spreads and the EBITDA per kg, what we are making currently? Because we are one of very few companies, especially in this quarter, where we have maintained a very, very healthy EBITDA per kg. So -- and we hear that some prices have started correcting overall in chemical market. So what is your thought process in terms of -- in the next couple of quarters, what sort of EBITDA per kg trend do you see? Do we -- are we -- can we maintain at near to this level? Or how do you see the different spreads across the product basket?
Thank you, Mr. Dhaval. Regarding -- actually, I can say the good numbers in the bad period, right? So what we can say, this is only -- happened when you have the multiple products of basket. See, one product is not doing well, then other product is helping you, that is a specialty with Balaji Amines. There, we have a number of products and a number of applications of the products. That is how it has helped us.
Going forward, yes, you are right, there are some pressures. But at the same time, we are coming up with new products also, which are introduced this year, which are coming in the coming years also. Definitely, as I said earlier, 24% to 26% EBITDA is sustainable. And as I said earlier, in our case, you cannot calculate per kg EBITDA because our product mix is much different than any other [ company ].
Yes, sir. So sir, now in terms of using methylamine captively, like 4 years back, we were at 30% captive usage. Now we are at 80% captives we did. So this shows while our volume growth has not been that huge in last 3, 4 years, but our EBITDA per kg has improved because of a larger move to the value-added products. Now for next -- another 2, 3 years down the line post our CapEx, these are over -- these are -- will you be at the same 80%, 90% capital utilization on the methylamine?
It should go -- that depends upon the both -- especially when we are talking about the DMF and the methylamine plants. The methylamine plant total capacity will be utilized for our DMF and for some of our existing unutilized capacity for the derivatives.
So there will not be much of value going out from the methylamine, maybe very nominal, the 10,000 to 12,000 tons may go for the marketing directly in the methylamines.
And in regards the new products, yes, DMC and your [indiscernible], that will be adding for the total existing capacity for the volumes.
The next question is from the line of Kishan Gupta from CD Equisearch Private Limited.
Yes. So given this volatility in raw material prices and short supplies of materials which you have talked about, so how much do you think your backward integration has helped in scaling your business?
The numbers are saying, Kishan, in the bad period also we have done better means because of our product mix and backward and forward integration has helped us a lot. One step in a single -- bringing a raw material and doing a single step, we always will not be much competitive. And when you do the number of steps, suppose if you talk about the one of my product, N-Methyl-Pyrrolidone, we do from the [ BDO]. We buy the [ BDO ] to GBL, GBL to NMP. These are 2 steps we'll do where you get the leverage of the margins.
Yes. See, volatility is not so fast. It is with -- the entire world is facing the situation today. And we are -- we can say we are in much advantageous stage than compared to European countries because we were more dependent on the gas from the Ukraine and Russia. We are well aware that what is happening with those 2 countries and how it will impact in the Europe. We may be impacted indirectly, but definitely, we are at an advantageous stage in the availability point of view.
Has your integration increased over the years, like what it was 5 years back?
I did not get your question.
So the level of backward integration, so has it increased over the years for you, like what it was?
We defined it before going for the integration. It's not happening without having any master plan. Just now as I said that we are going for the DMA and DMF means it is the integration that we -- with both the plants. The DMA plant is built for the manufacturing of DMF. So these are only planned. It's not unplanned integration. So there's only 1 or 2 steps, not very major, this thing.
And you have talked about growing your exports both in subsidiary as well as the stand-alone. So will it be from existing markets or newer markets?
Both existing. Also sometimes, we are getting the advantage. But like today, China is not in a position to reach some of the parts of the world where we are getting some advantage in exporting our products to that particular area. That is one area which is existing, I can say. New, which are coming up like just now I said the DMC, we have a lot of opportunity to go outside the country, and we are talking about a new product that -- N-Butylamine, but also there's a lot of opportunity to grow outside the country. With all this, our main aim to reach at least 30% to 35% of the total revenue should be from outside the country, which will help in having the net-sell edge for any of imported raw materials.
[Operator Instructions] The next question is from the line of Ishmohit Arora from SOIC LLP.
Congratulations on a great set of numbers. Sir, just had a question, what is our current capacity utilization of methylamine?
We are -- the new plant, which we have an almost using -- about 80% of the capacity utilized as of now. So when we just started the year last year, we have done only 9 months. But this year, we feel that we should be in a position to do now 80%. And going forward, we should do 80%, 85% per day at the end of the year.
Right, sir. And just one question on the products that you've been launching, is that on di-methyl carbonate. What is our right to win in export markets? And secondly, in [indiscernible] with the technology we are coming up, so is this first of a kind in the world technology? Or someone else is also manufacturing using the same technology?
I have not seen if anybody is manufacturing outside -- domestic, nobody is making it. But outside the country, yes, definitely one or the other people must be using the similar technology. But for the country, it is the first time.
And [ which assets we create ], we increase solution on DMC and propylene glycol together. The total capacity, I think I have cleared, I don't know how many people understood. The total capacity of this plant will be 30,000 tons, of which there will be 15,000 tons of DMC and 15,000 tons of propylene glycol.
Okay. Okay. And sir, what is the volume growth guidance for FY '23?
Sir, may we request that you return to the question queue. We'll move on to the next question. That is from the line of Naresh Vaswani from Sameeksha Capital.
Sir, congratulations on great set of numbers. Sir, in India, there were some cost measures by some of the players. So I wanted to know how is the situation now because that has led to an increase of EDA prices. Can you explain what is driving this very strong demand because...
Sorry to interrupt. Mr. Vaswani, your voice is breaking up.
Yes. Am I audible now?
Yes, yes. Go ahead.
Yes. In DMF, if I look at last 4, 5 years, so this year, our utilization has started to pick up. So I wanted to know what is driving this demand in DMF this year. And particularly next year, you are guiding for almost close to full utilization and we are also expanding. So these 2 questions here.
See, EDA, I can say, you're right that outside the country, there are -- other in Europe, 1 or 2 or maybe 2 to 3 plants are in the force majeure. The reason is well known that because of the gas availability from the Ukraine, natural gas started in the European region. That could be the reason.
And yes, it is continuously demand, even though also same demand trend is going down. We see that next -- visibility next 3 to 6 months, we can see the similar demand for the [ PDF ].
As regards to DMF, you are right, we also want to know what went wrong with the DMF. We have waited for 6 months with this demand. And the reason we have taken addition that at least in India, we need more than 90,000 tons -- 90,000, 96,000 tons of the consumption of this popular product. And the only existing plant is 30,000 tons, of which we were doing only 20,000 odd. Probably this year, we'll do total 30,000 tons.
In coming years, we are looking for -- this existing demand is 96,000 plus. If you take some 6% to 7% growth also, it will cost 100,000 tons. So even after adding our additional capacity of 30,000 tons also, it will be only 60% of the country's demand. I'm not talking about the world demand. So definitely, there's a room. So there's a reason the vision taken by the management to go with the second plant of the DMF.
The next question is from the line of Amar Mourya from AlfAccurate Advisors.
So I have 2 questions. Number one, EDA, I believe your utilization has also gone up in this quarter as well as the prices, obviously, the prevailing. So sir, is it -- like your competitors' cost of production, like majority of competitors were European, and their cost of production has also gone up. So because of this, these prices are there for EDA. And till the time situation doesn't normalize, this kind of prices can continue. This is one.
Second question is DMC. As you said that INR 150 crores can come from DMC. So the byproduct, which you are saying, that can contribute another INR 150 crores, so the total project will contribute INR 300 crores of revenue? These are 2 questions from my side.
Yes. EDA, you are right. Currently, situation is the same, as I said in my earlier answer, and it will be continued. At least to me, the visibilities of the next 2 quarters looks like this in the price point of view and as well as demand point of view.
So your second question with DMC and coupling [indiscernible] together both runs at peak level, I think I have given the guidance of INR 300 crores. So INR 150 crores -- INR 150 crores what we talked about, current year, part operations.
Okay. Part operation.
Even lower -- at average, lower capacity utilization because being the first year.
The next question is from the line of Anshul Verdia from Edelweiss Wealth Research.
Congratulations on a good set of numbers. Am I audible?
Sorry to interrupt, Mr. Anshul. Can you speak a bit louder? We are not able to hear you.
Yes. Is it audible now?
A little better.
Sir, congratulations on a good set of numbers. Just a couple of my questions. First, on the butylamine plant which we are planning, so I see we are putting out 15,000 tons of capacity. So where these additional volumes, apart from the domestic, you think would be absorbed? And what are the key raw materials you are looking for producing this particular market?
Again, this year, the raw material is butylamine and ammonia. And it's not available in the country. There are 2, 3 manufacturers, and even import also available like a commodity product. And in the country, as of now, the consumption is almost 8,000 to 9,000 tons, which is totally imported.
Apart from this, we have seen around the world, there is good demand for this product. Probably part of our production will go for the exports out of total 15,000. In first year of operations, we may do around 60%, 70% capacity utilization, whereby by the time we reach to be 70%, 80%, even countries [indiscernible] also may go up. The way the things are happening with the new molecules and the new things are happening, we feel that there should be some incremental growth in coming years in the butylamine also.
Just as a follow-up, sir. Can you give me some ballpark as the turnover of the new CapEx which we have announced, the full new one? And on the DMF, we are seeing that we will be running on improved capacity. So is it fair to assume 80 tons per day for 300 days for DMF?
Yes, we should. If everything goes well, subject to raw material availability. Of course, this is available as of now. But if everything goes like this, definitely, yes, we will be doing 80 to 90 tons per day.
The next question is from the line of Jatin Damania from Kotak Securities.
Sir, the question on the subsidiary. Now we are guiding that probably we'll do INR 700 crores, INR 750 crores of revenue in next year. So beyond INR 750 crores, what is the company that we are looking at to -- I mean another molecule that we are going to add in the subsidiary that will drive the growth? The first one.
And second, again, on the subsidiary, sir, just a couple of quarters back that we had indicated that as a company, we had formed a credit committee to evaluate the options in terms of merging the company with Balaji Amines. So what's the status on the same?
Number one, regarding the new -- see, we are talking about today is only 56%. In the coming year, we're talking about 70%, 70% to 80% whereby INR 700 crores to INR 800 crores. If it goes to 90%, I think it should reach to INR 1,000 crores. And we are working on the debottlenecking. We have seen some opportunity doing some debottlenecking, but we are evaluating. We do some equipment adding, and probably this capacity may grow under 10% to 15% in the existing [indiscernible]. That is number one. We are also looking the opportunity if we can do some derivatives by adding some small equipment. That is also we are doing it.
As regards to the committee and the merging and all, there is -- Subsidiary Board is evaluating the options of doing the debottlenecking and other things, fundraising, whether we can do some fundraising or whether we can do the merging -- whatever, they are working on it. And the Board will evaluate and you will hear -- in the coming 1 or 2 quarters, you will hear the exact what is going to happen.
Okay. So as of now, we are focusing more of EDA only that we'll be doing a debottlenecking, and that will probably drive the revenue for next 2 years, beyond which the derivatives will come in place.
Yes, you are right.
[Operator Instructions] The next question is from the line of [ Darshit Zaveri ] from Crown Capital.
Am I audible?
Yes, go ahead.
Congratulations on a very good set of numbers. I just wanted to ask around roughly, we will be having INR 750 crores revenue this quarter. So what can we think about in terms of FY '23? Will this mandate stay? Or can we even do better with new capacities coming up?
Current financial year, I think in stand-alone, we should have be in a position to touch INR 2,000 crore to INR 2,300 crores. And consolidated, we should be in a position to reach INR 2,500 crores.
The next question is from the line of Tanvi Bandari from [ Hem ] Securities.
Can you give guidance for your EBITDA margins also in a consolidated level for FY '23? [ Can you guide ] the top line that we'll be able to touch INR 500 crores? And also, in INR 2,500 crores, to what extent would be the additional revenue assets coming from the new capacity?
See, this INR 2,500, this now I think in my earlier questions were answered. One is the full capacity utilization of DMF and full year operation of butylamine. And the new products like DMC and the propylene glycol sales from the next quarter onwards at almost 9 months -- 8 to 9 months will be available for this. All these things will add to the revenue of the current revenue.
Second thing, yes, we should be in a position to do minimum 24% to 26% EBITDA. We should be in a position to maintain. The reason whenever we do any new product, we need to do some aggressive marketing to capture the market. That time, in the first year of the operation and facility, entering in the market, we will have a little lower EBITDA. But definitely, in the following years, we should go -- whatever we are giving now, 26%, 27%, should be in a position to maintain.
The next question is from the line of Anubhav from MC Pro Research.
My question is a little generic in nature. I wanted to understand on the end market part, both key end market, agrochem and pharma. What are your views on the demand side? How are they holding up? I mean, how is the channel inventory for both? Are you seeing any case of overstocking from areas? So maybe on -- absolutely or relatedly, if you can give some view on that effect.
Thanks for the specific question, even though it may not be fully related to our company. But I just would like to share whatever little knowledge I have from the day-to-day working market.
What has happened with China lockdown, it is, I think, almost to -- 6 to 8 weeks have passed for this lockdown. Because of the volatility, people started maintaining the 1.5 to 2 months inventory, I think, which have been completed. And the lockdown started -- that time, the people would have booked the material [ without ] around now. This month, maybe this week or maybe next week, that period has come. People have started inching that non-availability of booking and non-receipt of the material. [indiscernible] depending on the China, at least in India. Even outside India also, around the world, the people who are depending on the China will be inching more of the effect of this lockdown.
For our company, it may not be direct impact. There may be some indirect impact because of the matching raw material availability. But going forward, with the government encouragement, the CLI scheme, Atmanirbhar Bharat, many people are working on this ultimate products and remove the dependability on the China. That will definitely help in coming years. But this quarter, definitely, the pharma and agro will be having some pressure to some extent. This is a personal view.
The next question is from the line of Punit Mittal from Global Core Capital.
Just 2 quick questions. One is the CapEx that you are planning, is it all from internal accruals? And second, more importantly, on the DMF, how big is the risk of -- a few years ago, China was jumping quite a lot and there was a lot of price pressure. How big is that risk now going forward?
Okay. I think number one question is I think we already -- I already answered in my opening remarks saying that majority, I'm saying majority, of the CapEx will be [indiscernible]. Maybe few crores at the lag end of the completion is required, we will go for some borrowing. But otherwise, as of now
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Ladies and gentlemen, thank you for patiently holding. We now have the line for Mr. Reddy reconnected. Over to you, sir.
Hello? I think it's Mr. Punit Mittal's question, right?
Yes.
Number one, regarding risk on the DMF, right?
Correct. Yes.
See, DMF, China, the reason we have waited almost 6 to 9 months to understand the -- whether the China will take new turn or how long they will do like this or whether they will again reenter with the new prices lower, but we could see that this is not [indiscernible]. People understood realistic prices, and maybe some of the clients, because of the gas prices all over the world even in China, all come to a relative level.
Because -- I want to tell you one thing. All the plants in China and other places, their fuel is produced with natural gas. The natural gas around the world is -- come to a particular price. I don't think that will come down. Whereas our [indiscernible] manufacturing is based in CPC, [indiscernible] petroleum [indiscernible], which is available in the country and which is not likely to go that high or what is happening in natural gas. So that is one thing.
Second thing, the capacity point of view. As of now, the 96,000 to 100,000 tons is the country's consumption. And we are talking about this new plant coming up in coming 2 years, that is 2024, means another 2 years, we can add another 20,000 tons of growth in the DMF consumption in the country. Whereby the total demand will go to 120,000 to 125,000 tons, and we are asking about 50% of the capacity. That is 30,000 existing and adding 30,000. So that means it's not a big risk. It's a very calculated risk.
The next question is from the line of Vinayak Mohta from Stallion Asset.
Congratulations on a great set of numbers. I broadly wanted to just understand the growth numbers that you have been talking about. Like you have done INR 2,300 crores in this year, and you will be moving towards INR 2,500 crores in next year. So is this because of the higher pricing realization that has come through? Or is it also -- and lower volume growth that you had in the current year? Like I'm just trying to understand, there is so many capacities coming in, how would the growth number be [indiscernible]?
Also just wanted to understand, where do you see the company moving in the next 3 to 5 years given you'd have multiple capacities coming onstream and you'll be announcing more capacity when they come due? So like what is your vision for the company for the next 3 to 5 years, sir?
You're right. You can take that conservative point of view you have taken this INR 2,500 crores because one can easily calculate that there's new capacity adding in this year, and some of the low capacity plants will be running at higher capacity in the current year. Definitely, one can understand it should be more than INR 2,500 crores.
But you are right that some of the products, maybe because of the raw material price and [indiscernible] product price is higher, those may come down. Even though your bottom line may not impact, but revenues may impact. The reason INR 2,500 crore.
The answer for your second question is with regards the coming 2 years, yes, the total -- I think we have taken up 4 plants. Half of the -- part of the work we've already done. One is the N-Butylamine; number two, acetonitrile; number three, methylamine; and number four is the DMF. All these 4 plants will be commissioning one by one in coming 2 years. The commencement of production will complete all the products by end 2025. The moment we operate all these existing clients and these 4 plants, we aim and we dream our top line should be around INR 4,000 crores.
And that would be around FY '26, broadly?
'25 to '26.
The next question is from the line of Anurag Patil from Roha Asset Managers.
Sir, what are the current prices of DMF, acetonitrile and N-Butylamines, particularly?
The DMF price was INR 190, but it has come down to INR 170 -- INR 165 to INR 170 level as of now. And acetonitrile came down to INR 245 to INR 255. And N-Butylamine went up to INR 400, INR 500 also sometime back. And it is somewhere around INR 180 to INR 200 per [indiscernible].
The next question is from the line of Dipen Sheth from Buoyant Capital.
I just wanted to ask a question about the balance sheet, particularly when I look at the receivables that show up this year. They seem to be a little out of whack and disproportionately higher versus last year, even accounting for the rise in revenues. So any color on that? Can you give us some...
I can tell you, you might have seen some of the [indiscernible] for the expansion also of the [indiscernible] to check. And proportionately, if you see, we see sales have been increased. Last year sales, if you see, INR 13,011.46 total year. And current year is INR 2,320 crores. I think proportionately, it should be in track on [indiscernible]. If you can drop a mail, I can give you the total exact picture.
The next question is from the line of Amar Mourya from AlfAccurate Advisors.
Just wanted to understand that, sir, this INR 2,500 crore guidance, I mean, this seems to be a very conservative one given that whatever we are...
I think, Amar, I have answered just one question back only answer for this. Yes, you are right, it is really conservative only. Looking to the peak prices, we aspire that if the prices comes on, even though the bottom line may not impact, but the revenues may impact. And adding the new products, we'll add -- all put together, I have taken this conservative number of INR 2,500.
Okay. But you're saying the EBITDA -- absolute EBITDA value-wise will continue to remain same, right? So we should not focus on revenue, we should focus on absolute EBITDA value?
Yes. EBITDA and the EPS, if you look at that, there will be impact.
Ladies and gentlemen, that's the last question. I now hand the conference over to the management for the closing comments.
So thank you all. Thank you for taking your time and participating in our conference call. The overall outlook for Indian pharmaceutical company and agrochemical is expected to improve, [ authorize ] companies in Western economies to put the China Plus One policy. And the pharmaceutical and agrochemical industries account for the vast majority of our end user clients, [indiscernible] for aliphatic amines and specialty chemicals.
Given the strong correlation between demand of our products and demand for 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, diversify our product portfolio in order to address more segments of our end user markets.
And thank you once again to all the investors, stakeholders for showing content on our company. Thank you once again.
Thank you. Ladies and gentlemen, on behalf of PhillipCapital (India) Pvt. Ltd, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.