Balaji Amines Ltd
NSE:BALAMINES
US |
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
|
US |
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Mastercard Inc
NYSE:MA
|
Technology
|
|
US |
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
|
US |
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
|
US |
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
|
US |
Visa Inc
NYSE:V
|
Technology
|
|
CN |
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
|
US |
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
|
US |
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
|
US |
Coca-Cola Co
NYSE:KO
|
Beverages
|
|
US |
Walmart Inc
NYSE:WMT
|
Retail
|
|
US |
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
1 950.65
2 697.65
|
Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
Johnson & Johnson
NYSE:JNJ
|
US | |
Berkshire Hathaway Inc
NYSE:BRK.A
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Mastercard Inc
NYSE:MA
|
US | |
UnitedHealth Group Inc
NYSE:UNH
|
US | |
Exxon Mobil Corp
NYSE:XOM
|
US | |
Pfizer Inc
NYSE:PFE
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
Nike Inc
NYSE:NKE
|
US | |
Visa Inc
NYSE:V
|
US | |
Alibaba Group Holding Ltd
NYSE:BABA
|
CN | |
3M Co
NYSE:MMM
|
US | |
JPMorgan Chase & Co
NYSE:JPM
|
US | |
Coca-Cola Co
NYSE:KO
|
US | |
Walmart Inc
NYSE:WMT
|
US | |
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Ladies and gentlemen, good day, and welcome to the Q4 FY '23 Earnings Conference Call of Balaji Amines Limited hosted by Elara Securities Private Limited. [Operator Instructions].I now hand the conference over to Mr. Gagan Dixit from Elara Securities Private Limited. Thank you, and over to you, sir.
Yes, thank you. A very good afternoon and very warm welcome to everyone. It is our pleasure to be able to bring to you the Management of Balaji Amines Limited led by Mr. D Ram Reddy, who is the Managing Director.Before handing over to the management regarding today's call following is the Safe Harbor statement. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, expectations as of today. Actual results may differ materially. These statements are not the guarantee of the future performance and involve risks and uncertainties that is difficult to predict. A detailed safe harbor statement is given on Page 2 of the company's investor presentation. This has been uploaded on the stock exchanges and company's website as well.I would now hand over the conference to the Balaji Amines management. Sir, over to you, sir.
Thank you Gagan. Very good evening to all of you and welcome to the conference call to discuss the financial performance of the Q4 and FY 2023 and performance of the company Balaji Amines Limited. I hope you got the chance to go through the press release and the financial statements submitted to the stock exchanges and uploaded on our website.I would like to address the recent financial results, which although not a favorable as we had hoped still demonstrate resilience and potential for future growth. Despite facing headwinds in the pharma API and the agro industries globally, we have managed to deliver decent results. However, we experienced a fall in margins, primarily due to the de-growth in the pharma API and Agro sectors. We believe that the performance of our company will gradually improve in the coming months. We anticipate a return to growth and margin levels similar to those achieved before the onset of the COVID-19 pandemic. We are confident that this improvement is sustainable and can be achieved in due course.In the past years, we experienced exceptionally high realizations for certain products driven by global circumstances that has since normalized. It is important to acknowledge the normalization and adjust our expectations accordingly. Our capital expenditures were planned based on the normalized profitability ensuring that our company will not be adversely impacted by this change. We have taken a proactive approach to manage our investments and aligns them with realistic projections.Now let me take you through the standalone financials and operational performance. Our total revenue stood at INR351 crores in Q4 FY 2023 as against INR625 crore in the corresponding quarter of previous year. EBITDA stood at INR59 crores in Q4 FY 2023 as compared to INR131 crore in the same period last year, with EBITDA margin at 17% in Q4 FY '23, as compared to 21% in the same period last year. Profit after tax stood at INR38 crore in the current quarter under review as against INR82 crores in Q4 FY 2022. PAT margin stood at 11% in Q4 FY 2023 as against to 13% in Q4 FY 2022. Diluted EPS for Q4 FY 2023 stood at INR11.59 per equity share as compared to INR25.21 per equity share in Q4 FY 2022.Sales balance stood at 21,589 metric tons for Q4 FY 2023 as against 28,877 metric tons in Q4 FY 2022. Coming to our standalone performance, for financial year 2023, revenue from operations in FY 2023 stood at INR1,736 crores as compared to INR1,939 crores in FY 2022. The EBITDA stood at INR339 crores in FY 2023 as compared to INR459 crores in FY 2023. Our EBITDA margin was 20% in FY 2023. PAT for 2023 stood at INR225 crores from INR308 crores FY 2022. The diluted EPS for FY 2023 stood at INR70.18 as against INR95.04 per equity share in the FY 2023. I would like to add that currently we are at zero debt company on standalone basis.Now coming to the consolidated performance. For financial 2023, the revenue from operations for financial 2023 stood at INR2,370 crores as compared to INR2,338 crores, in FY 2022, a growth of 1.4%. EBITDA for financial year 2023 stood at INR624 crores as compared to INR637 crores in FY 2022. EBITDA margin for FY 2023 was at 27% as against -- 26% as against 27% in FY 2023. PAT for financial year 2023 stood at INR406 crores as compared to the INR418 crores in FY 2022. Diluted EPS for financial 2023 stood at INR100.47 as against INR113.71 per equity share in financial year 2022.Total volume stood at 89,231 metric tons in FY 2023 as against 98,179 metric tons in FY 2022. For financial year 2023 Amines volumes stood at 25,739 metric tons, amines derivatives volume stood at 33,091 metric tons, specialty chemicals volumes stood at 51,628 metric tons.Coming to consolidated performance of Q4 FY '23, our total revenues stood at INR477 crores in Q4 FY 2023 as against INR785 crores in the corresponding quarter of previous year. EBITDA stood at INR99 crores in Q4 2023 as compared to INR201 crores in the same period last year. EBITDA margin was at 21% in Q4 FY 2023 as compared to 26% in the same period last year. The fall in operating margin was primarily on account of degrowth in pharma and API sector. Profit after tax stood at INR55 crores in the current quarter under review as against INR131 crores in Q4 FY 2022. PAT margin stood at 12% in Q4 FY 2023 as against 17% in Q4 FY 2022. Diluted EPS for Q4 FY 2023 stood at INR14.63 per equity share as compared to INR33.56 per equity share in Q4 FY 2022.Sales volume stood at 25,505 metric tons for Q4 FY 2023 as against 33,780 metric tons in Q4 FY 2022. For Q4 FY 2023 Amines volumes stood at 6,659 metric tons, Amines Derivatives volumes stood at 8,607 metric tons, specialty chemicals stood at 11,239 metric tons. Our subsidiary company Balaji Specialty Chemicals Limited continued to witness substantial demand as well as robust price realization. We logged sales volume of 4,960 metric tons in Q4 FY 2023 at our subsidiary plant as against 4,903 metric tons in same quarter last year.We have recorded the capacity utilization of about 72% in FY 2023 as against 56% in FY 2022. Accessibility for raw materials required for manufacturing products of the subsidiary plant continues to remain a major challenge. If the accessibility of raw materials improves, we anticipate to quickly ramp up the production in subsequent quarter with strong underlying demand from end customers. Apart from the operational performance, I have several positive developments to share.To continue independent representation and strengthen our Board, we have recently inducted 4 distinguished individuals as new Board members. I'm delighted to introduce Mrs. Suhasini Yatin Shah and Dr. Uma Rajiv Pradhan, Mr. R. Mohan Kumar and Mr. Adabala Sheshagiri Rao as the newest additions to the Board. Each of them comes from diverse backgrounds, bringing with them a wealth of knowledge and extensive experience. Their presence will undoubtedly inject velocity and rigor into our boardroom, enhancing our strategic business operations and providing valuable guidance to propel our company to new heights. I welcome them all on our Board.We have implemented certain changes in the re-designation of management roles to better align our focus and drive profitability and growth for both our parent and subsidiary companies. Mr. Hemanth Reddy Gaddam have resigned as Whole Time Director and CFO of the company to focus on subsidiary company Balaji Specialty Chemicals Limited. Mr. Ande Srinivas Reddy; our Whole Time Director will also take charge as CFO; and Mr. Rajeshwar Reddy Nomula has been re-designated as Whole-Time Director.CapEx update. Revenues from our newly commenced plants, including DMC and propylene glycol and ethyl amine will start contributing to our top line from the coming quarters. This influx of revenue has the potential to improve the margin profile of our company starting from Q1 FY '24. Looking ahead, we have strategic CapEx plans in place to fuel our future growth journey, we have initiated the CapEx for setting up the following plants, which will significantly contribute to our expansion. We are progressing swiftly with the expansion project of our N-Butylamine plant, which will help the capacity up 15,000 tons per annum. We expect the plant to be commissioned during the second half of financial year 2023-2024.The implementation work of our Methylamine plant with a capacity of 40,000 tons has already commenced. We anticipate that this project will be commissioned around March 2024. In addition to these ongoing projects, we also have some exciting new projects in our pipeline. These include the establishment of a dimethyl ether plant with a capacity of 100,000 tons per annum. The DME a new-age gas holds significant potential in various fields such as replacing LPG for fuel and aerosol usage. We are also exploring other applications and usages for replacing LPG, which will further enhance our market presence.Furthermore, we plan to set up an acetonitrile plant with a capacity of 50,000 tons with the new technology. And a DMAHCL plant with a capacity of 12,000 tons and a DMF plant with a capacity of 30,000 tons. These projects demonstrate our commitment to expanding our product portfolio and catering to the evolving needs of our customers. For our new Acetonitrile plant, we have ambitious plan. We will undertake production through a new upgraded technology, which will provide us with a cost advantage. This advantage will enable us to withstand higher prices of acetic acid and ultimately result in healthy operating margins.Now we can open the floor for question and answers. Thank you.
[Operator Instructions] The first question is from the line of Sudarshan Padmanabhan from JM Financial PMS.
Sir I have 3 questions. One is on the demand on the [ textiles ] and the pharmaceutical side, the commentary has been mixed. I mean there are some companies, which have been talking about coming out of the woods, but there are companies that are talking about issues still persisting as far as competition is concerned. And specifically on the Agro side, as well, I mean, there are higher inventories that you're [indiscernible] season. If you can say elaborate a bit on how do you see the demand scenario, say, in the near term and the longer term?And the second is on the raw material side. I mean, I understand that we have seen a fair amount of [ future ] as far as raw material is concerned. But have we exhausted all these high cost inventories, where do we see the inventory levels rationalizing going forward?And my third question is on your CapEx, specifically on the DME, the dimethyl ether, if I'm looking at how it has been implemented in Indonesia, they are talking about lending and eventually doing however imports of LPG. How do you see this kind of rolling out as far as India is concerned and your specific role in this?
Thank you, Mr. Sudarshan. See as far as the current situation about the API pharma, and agrochemical, you are right, the previous few months they were facing a lot of problem. What we can see for the last few weeks, and this quarter, there we have seen some improvements because the earlier was because of the high-cost raw material and low demand in the world market. But we are seeing the improvement and -- which may take another 2 to -- 1 or 2 quarters to go to the normal. But definitely it is starting from this quarter, the improvements in the API market whereby our capacity utilization will improve.And second thing, the raw materials is, you are right, many of the materials were high peak in the earlier months like ammonia went up to INR90, INR100, which has come down to INR48 to INR50. We expect another INR4, INR5 to come down maybe INR40, INR45 should be realistic price for the ammonia and methanol also. In India, it is taking some time, but if you see the outside country, like China, from the $300, $320, it has come down -- today's price it has come down to somewhere $255 to $260. And we expect in turn to India also will come down to same levels maybe $240 to $250 level, which will give great oxygen for the Indian chemical industry in turn for the intermediate and also for the API industries.And even acetic acid also, which has went up to INR70, INR80 has come down to below INR40. We expect it should be somewhere INR30, INR35, but it -- still it is INR38, INR39. And we expect this will come down in the coming 1 month, 1.5 month, all these prices will come down the original expected levels, original, I can say, it is pre-COVID levels. And third about the... Inventory levels right. So we should [indiscernible] high cost inventory in about 2 quarters. Yes, yes, you are right. It is with everybody. But in our company, we have only one raw material, which was having high inventory, but all others were going as per the convention, we were going as per -- we were travelling with the market, but with very carefully because of the earlier experiences. The only one raw material that is per the NMP and which is going to be exhausted by 1st week of next month, there will not be any high cost inventory, where will be real-time inventory should be there, at price point of view.And third, you asked about the dimethyl ether. This is really very exciting for us. We were in with government of India in correspondence with the Niti Aayog for several months. Of course, we cannot touch the domestic market, when we say the replacement for the LPG, but we are going for this aerosol market indeed and other commercial market like using fuel for the heating elements in the industrial use and even commercial like hotels and all, there'll be huge requirement for replacing the LPG. So we have the big hopes, and this project, we expect by end of this financial year, we should be in a position to come to some final levels.We got the -- we have the land, we got the environmental clearance and we started the retailing and equipment the ordering also started. Probably you will hear in detail the exact date for the next quarter we will give you exact commencement of this plant. And other projects like DMC, which was earlier a DMC and propylene glycol, both were in the -- what you call the approvals. And that has finished and really speaking in the last 1 month, we have seen good uptake of these 2 products. And we expect in the coming months, these products will go in full swing. At least PG will go in full swing, DMC, we are looking part in the country and part outside country also as we have taken the outside reach registration. So we have given already a couple of iso tanks to the various customers in the Europe and other areas. We expect that these product also will go in full swing.
The next question is from the line of Dhaval Shah from Girik Capital.
Hello Mr. Reddy. Very happy to see a series of new products being launched by the company as you have always guided. Sir my question is, so now, first on the standalone side, we did around 90,000 tons for FY '23. And now we have 1,00,000 ton additional capacity going live over this year, so this 90,000 ton should grow at what rate and by FY '26, 3 years what is your goal, what sort of volume are you looking at the standalone level?
See it should go more than 100,000 tons, every year there should be minimum 10% growth should be there without adding the new capacities. And again the new capacities we are well aware that, in the initial first year, specifically, if you remember, I am telling again and again, when we introduce products first time in the country, it will take a lot of time. This you see, I think the last 6 months, 7 months, we have started the plant up for DMC and propylene glycol. The real dispatches have taken place only last month and this month. And we have exhausted stocks, we restarted the plant and we -- here onwards I think we should be in a position to go firstly 50% level and by end of the year, we should reach to more than 70%, 80% this plant.And other for even DME, it will take time to introduce, to explain the people, the replacement when we talk about the new product. But over a period of time, after 6 months or a year, we will see definitely good boom like all we have done all other products we are experiencing same thing, even the subsidiary also, we faced a lot of problem in the first 6 months, maybe 1 year also we face the problem for the approval to bring them back from the there, international contracts to the domestic just-in-time thing, it took a lot of time. So, we expect in the coming years, these existing will grow with 8% to 10% of the volumes. And new plant, immediately starting, which should go first year go to 30%, 40%, and the next year onwards it should go to 70% to 80%.
Okay. So when you say, new plant, so one is, one is DMF, which is going to come up 60,000, then you have Acetonitrile, another 15,000 odd. And then this N-Butylamine, which is 15,000 and plus Methylamines.
Let me give you sequence. Mr. Dhaval, let me give the sequence. First plant will come to Butylamine. Booking in advanced stage, you will see by September, October, you will see the plant will be commissioned. And why we have taken this first because nobody is there in the country. We want to do that first because other products we have at least some capacities we are running. So that's the reason we have taken this into the front bench, Butylamine. And we have done the proper surveyed outside country also, we are expecting good response.So second is the Methylamines. Why Methylamines, I'll tell you, because the DMF we are not in a position to run the existing plant in full capacity because DMA is becoming short many times. We are not in a position, we are just catering to the other customers of DMA, but leftover we are trying to use for the DMF. So when we want to operate both plants, so we need to commission this. Once we commission this, then both the plants will run in the proper way. That's the reason the second will come to Methylamines which is already in full swing, the [ silly ] works and other corrections are going on. By March 2024, we expect this 40,000 tons will come in the line for the Butylamines.Third plant, we see that DME may take the front bench because of -- first time we are coming up and there is a lot of exciting new news we are seeing that replacement of the LPG. So in the meantime, we may get the some other response, so there can be UPIs also. They have referred this to BAS from a storage point of view. Otherwise, we are open for the selling these aerosol on other commercial market. And after this then we are -- we align with the DME parallelly the ACM plant will come, Acetonitrile with a new technology. And then we are talking about the DMF, DMAHCL both parallel after these 2 plants. Every year, you will see 2, 2 plants you will see coming up.
Okay. So this DMF acetonitrile, earlier acetonitrile was supposed to go live by September 2023. Now does the time line...
That will go for the next year. These projects will go for the next year.
Okay. So '24 calendar year.
Market scenario, you are well aware. ACM is not doing very well, as of now the -- not doing well. But we -- since our technology is different, we believe that we should be in a better position when you compare it to the existing technology. But still the other products are very exciting and these are well in good demand. That's the reason we have taken them on the front line.
Correct. So now sir considering all this new capacities, by when can we expect at the standalone level, the company to clock around roughly 1,80,000, 1,90,000 tons, by when should we expect that number?
With my current run rate, with current situation, current speed, I think we should be going 2026, we should be in a position to touch, double the existing number.
Double the number, 2026. Got it, got it. And on the subsidiary side, anything would you like to share with regards to the IPO and the growth and how do we see there the next 3, 4 years?
See, I cannot share the numbers because being this -- with legal restrictions, but I can say that, that subsidiary has already applied for the new land for the new expansions, which is expected this month, the new land about [ 100 acres ] we applied with the Government of Maharashtra, which is in very active stage, you will hear that in maybe 2, 3 weeks time, 1, 2 weeks time, you will hear that. And there I can only tell that they are looking for the new products, again first time in the country that they acquired some -- recently acquired some new technology, which is sodium cyanide technology acquired. Probably on that line, there are several products are there, which they are going to do in coming years. That's what I can say.
[Operator Instructions]. The next question is from the line of Jaiveer Shekhawat from Ambit Capital.
Firstly, I wanted to talk about realization for your standalone business. If I see the realization, we have seen a consecutive decline over the last 4 quarters. So one, can you explain what is driving this moderation and realization. And even from here on, do you except further moderation given that your RM prices have also come down significantly.
Jaiveer, thank you for this question. I think this is, many people must be having in their mind. I just want to clarify, if you remember my earlier interviews, I was telling that last 4 quarters, everybody in the country like chemical intermediates and specialty chemical, API pharma, we enjoyed some bonus period. Bonus in the sense, pre-COVID, suppose before COVID, if you have done some EBITDAs 20%, 22%, during this period, we have done 39%, 40% EBITDAs. And we can't take that as a standard, every time I was telling the same thing.If you take now today's results of our company, I will just give the example, suppose if you take '22, '23 margins on standalone basis, I think 17% to 18% is there presently. And if you take pre-COVID, I'm talking about 2019-'20, that time we have done the margin for 16% to 17%, means there is no major change if you take standard as pre-COVID. So in spite of all these hurdles, these results have done, we have done better, even though our end-users like pharma API degrowth almost people have done below 30% -- below 40%, they worked. But still we could do because of this product mix and all those things.And I expect, as you rightly said, the many raw materials are coming to the normal stage like methanol, ammonia and acetic acid, even methanol, so we see that there should be gradual growth from this quarter onwards, it is applicable -- in my knowledge it is applicable for all the industry, not only for the Balaji. So there should be between 5% to 7% margin improvement should be there from here onwards for this 1 year -- year-on-year you can see the improvement in the margins.
Understood. Sir, if I just compare your realization what is pre-COVID, I mean these are still at a significant premium. So one, is it that a lot of Chinese imports have come into the market, which is further pushing the prices. And if you can just clarify on the point, given that now you have seen a lot of correction in ammonia prices, even methanol, you expect further realizations to go down from current levels?
Yes, but see the top lines you can see the declining, because the raw materials price will go down whereby your finished product also will go down. But I feel that the margin should improve because of the raw materials will come down whereby the correction will take place, the margins corrections will take place during this period. And as you said, the China, yes, in our case, we have only 1 or 2 products which are coming from the China. Otherwise the 90% of our products we are not having any major threat, 1 or 2 -- only 2 products, I can say, little threat. And we -- but we have come out of that. Earlier we used to fight for the anti-dumping and all. But this time, only 1 product we feel that we need some support, which we are fighting with the government that is DMF, and that also started improving again for the -- this quarter onwards.
Sure sir. Sir, one question on your subsidiary as well. So, you mentioned in your commentary that we have seen robust realizations as well as demand for products of your subsidiary, but when we see the results of the subsidiary, I mean, what appears to us is that there has been significant moderation in your realizations and volume even during the quarter. So one thing you resolved this disconnect. And secondly if I just compare your performance with another distance competitor, which is Diamines & Chemicals which has similar product portfolio. They seem to have done very well. So what explains this disconnect? Your comments here.
I'll tell you what happened, there was some raw material problem during this period, we thought that we will catch 75% to 80% of the capacity. We could do end at 70% to 73% because there was issue for the raw material in between for 4 weeks, 5 weeks, we could not get the raw materials, that is one thing. And second thing, if you see the price point of view, I don't think we have not done well the -- roughly say that we were telling that, INR180 crores or something we were telling that the PAT I think we will touchwood that. I don't think that we have not done what we said. We said that we are having some products in the pipeline, which has been delayed, that new expense totally new with existing plant what the guidance we have given, we have achieved it.And regarding the other, I cannot comment that, I don't know what they are doing. If you go in detail, numbering like tonnage, what tonnage, because we are doing the manufacturing, you cannot compare the other companies, they are not manufacturing, they are doing the distillation. if you see the exactly, they are bringing the stream and they must be doing other products also. I do not know exactly, but this -- we thought we have done much better when we compare to the exact manufacturers of this product. Like if you take the BASF, Dow, all those people, they could not continue their manufacturing because of the raw material, because of the gas, for the many reasons, specifically European companies. And we have exported this product to China, where there is competitiveness.So we expect, going forward, as I said in the earlier answer for some member's question, what -- they have acquired some new technology that sodium cyanide and all, you will hear in coming months.
The next question is from the line of Anubhav Sahu from [ MC Research ].
Sir, my first question is regarding the volume growth. On overall basis there has been a degrowth of 22% and particularly degrowth has been more for the specialty chemicals. Could you share which are the key products where we faced major challenge? And if you could also talk about, is it more because of, as you mentioned in the opening comments, these some of the products we were facing difficulty in getting the raw materials. And also, is it more due to the end market challenge?
See Mr. Sahu, you are right that market situation was not good because end of the day, if my end users, my end customers are doing well, then I'll be doing well. So if you see the pharma API, because our total basket more than 55%, 60% goes to the pharma API only. So there they were having the degrowth where we could not do very well, that if you ask about these specific products, there is 1 product that the DMF we could not do very well. The other second product is NMP where we were hiring high cost inventory, which we are going to finish this month. And next month onwards you will not see the high cost inventories.And second thing, as regards the degrowth here, when you said the, I don't know when we said the specialty chemicals, specialty products are used -- said about the subsidiary, I didn't understand. [indiscernible] the products, if you say that they did the products like NMP, as I said, the margins have come down because of the high cost raw materials because of the volatility in raw materials, which will be corrected in the next month onwards.
Okay. And regarding your -- specific comment regarding, I mean we are still finding some difficulty in getting raw material. Is it something I mean...
Till last month, now, yes, that's like to be where there is big companies like [ Shadik ] and there is one company in Thailand, GC Glycol. These big plants went for the shutdown, unexpected major shutdown, whereby the entire market has -- in the short supply. And now we have started, the Shadik has started end of last month. And these, Thailand plant is coming up in the next month. So there should not be challenging for the going further, we have covered from the other markets. For these two months, we have the sufficient raw material. Further going also, there should not be any problem.
Okay. Okay. And secondly, sir, wanted to gauge your stance regarding sustainable operating margins. And just trying to understand it, again in your opening comments you have mentioned that, we would want to like to go back to margin, which we were present in pre-COVID era, which were probably in 18% to 20%. I think when you mentioned 18%, 20%, I think are you mentioning it for the standalone business or for the consolidated business?
Consolidated will be 26% to 27%, standalone 22%.
22%, okay, okay. Okay. And sir, lastly if you could share how much of these -- for the Balaji Specialty, how much of the sales is coming from EDA now? What is the product mix change in terms of revenue?
See product is -- suppose about 5,000 tons per quarter we are selling, 4,000 tons about total sales if we do -- I'll give exact numbers, if you want, I can give you. For the Q4 EDA, we sold out about 4,000 tons. If you talk about the total year, 31-3-2023 end, EDA sold about 17,600 tons, around of our PIP sold about 1,300 ton to 1,400 ton. Data is about 1,500 tons to 1,600 tons. And other [ one ] is about 800 tons to 900 tons. All put together 21,000 tons to 22,000 tons as against last year 17,000 tons in spite of the raw material problem.
Got it. I think it's quite helpful.
The next question is from the line of [ Chandrakant Dhanuka ] from CD Equisearch.
Sir, can you tell me evidence of the pickup in pharma industry in recent months?
Evidence means my lifting of raw materials speed up is increased in last 2, 3 weeks, we have seen, there is an increase in raw material take up from the customer point of view.
Okay, sir. And my second question...
Projections given by some of the customers.
Okay, sir. And sir my second question is like, how is your DMF business faring currently?
DMF now it is picking up. In between there was a problem because of the high cost of raw materials and the competition from the dumping from the outside. Now it is improved. So -- and in some cases what happened, DMA when the market is full demand for the DMA and we were not getting that DMAs, we were not in a position to allocate the DMA for the DMF plant. That is a reason we are talking about the new plant, which is under construction coming by end of this financial year.
Sir can not we buy DMA from outside and produce DMF?
No, in country, everybody is busy. There is no additional DMA. Only DMF is coming from outside country, but not DMA. DMA rather some quantity we're exporting outside country also. We are targeting outside also.
And sir what is the current DMF price can you tell me?
Around INR95.
Okay. And sir, and my second question is like, how would you explain some 36% drop in receivables in fiscal year '23 at a time when your sale was almost flat?
Can you repeat the question?
Sir how would you explain some 36% drop in receivables in fiscal year '23 at a time when your sale was almost flat?
Drop in the receivables. So that means sale is not increased, sale is lower and we recovered the fast. That is only.
Sir why did it happen like...
See, we might have -- because of the precautions taken by industry, entire industry was not getting good, and thought of [ even ] where we extended 120 days credit, we might have reduced it 90 days, we might have rejected some of bad customers, and that might have resulted to this. And still if you want the detail, I will just check, maybe if you can drop a mail, we would love to answer that in detail.
Okay, sir. And sir, I also want to understand...
I'm sorry to interrupt, sir. I would request you to kindly rejoin the queue sir. We have the next question from the line of Rohit Nagraj from Centrum Broking.
Sir, on the Board rejig, was it any regulatory requirement or was it voluntary given that a significant amount of Board has been rejigged at one go?
Thank you, Nagraj. Let me clarify. Actually as per the SEBI guideline, any Independent Directors is there on the Board more than 10 years, they are not the independent Directors, they can be treated as Executive Directors. That's what they say. That's the reason and in our case what happened, majority of the Directors, inducted in similar period. One month here and there, everybody finishing the 10 years. And that has happened with panics in this thing. And there are 1 or 2 Directors who are attaining more than 75 years age, that is also another reason. And the reason we have requested and we have replaced the old members, Independent Directors. And since it has come at a time people have taken as a in a different this thing. Actually there is nothing wrong in it. It is as per the SEBI guidelines.
Thanks for the clear explanation. Sir, second question is, there are multiple capacities, which we are putting up across products. And you indicated in your earlier remarks that probably in the first year of operation we will go up to say 30%, 40% utilization [Technical Difficulty] about 70% plus. What gives us the confidence of lifting this material, are products completely import substituted or on the downstream side, there are lot of customers who are putting up or expanding their capacities and that's why there is a difference within a couple of years [Technical Difficulty] 70% plus [Technical Difficulty].
I am sorry to interrupt Mr. Nagraj, we couldn't hear you. The last line, we couldn't hear because there was a disruption on your line. So I would request you to kindly use your handset please.
Yes, am I audible now?
Yes, please continue. Please repeat the question.
See Nagraj, I can explain you. I understood your question. See, we have taken -- why I'm telling you where before setting up any plant, you are well aware that we will do the perfect survey. When we talk about import substitute, that Butylamine is imported almost 7,000 to 8,000 tons per year in the country. And we checked outside country, my existing customer outside country also about 3,000 to 4,000 tons consumption is there. If I talk about 10,000 tons, I can go first year easily 7,000 to 8,000 tons. And if I take the growth, there will be 10% to 15% growth for these products, the next coming 2, 3 years we will reach there what we are talking about 15,000 tons, Butylamine. We have estimated next 4, 5 years, we have estimated, and we are investing the money, this 15,000 tons. Our products also in the same way.And second thing, you said that, lot of companies under PLI scheme, if you go to their website, many companies put up their papers for the -- going by the expansion. Many API pharma industries because of the last 5, 6 months degrowth, they are not talking, nobody is talking, including no TV show, nobody is talking about the pharma API. But if you go back, [ 8 ] years back and they see their papers in the PLI scheme, everybody is talking about the expansion, there are 500 companies put up their papers. I don't know how many companies have got the approval for their PLI scheme. So there all these products, these are all basic products for the -- any new molecule comes, 1 or 2 products will go in that. So that is the confidence, what we can see. It's not today to tomorrow, definitely all these products will go in full swing.
Right, right. Just one clarification, any competitors globally are also expanding their capacities or they are relatively kind of mum as of now and we are the ones who are in Asia or particularly in India are expanding capacities?
Must be doing outside, but I do not have the exact numbers. But definitely there must be some expansion going [indiscernible] shut some of the plants in Europe and they are starting some of the plants in China. And some of the launches in other locations, like many people are doing. It's not like that we are only doing in India, but outside country also these expansions activity is taking place.
Sure, sir. Thanks for answering all the questions and best of luck sir.
The next question is from the line of Jiten Parmar from Aurum Capital.
My question is on the capacity utilization, what was the capacity utilization for FY '24?
Total number of plants different, different plants are there, you can say that all plants together it is somewhere 80%, 85%.
Okay. So our capacity is around 2,31,000. So what was our volume for the whole year?
See 98,000 tons, see you are taking, which are under [ expansion ] like you see, Dimethyl Carbonate, Propylene Glycol, they just started, you can't take them as new capacities. Like other capacities we have shown 231,000 tons capacity, but you could talk about the Methylamines, the Methylamines 48,000 tons, it has run 95%. But out of that, 80% is used in the various products. They cannot be compared as a separate capacity, right?
Perfect, perfect. Okay. And my second question is on what will be the CapEx for FY '24 and FY '25. And what will be the source for that?
See for the current year, as on today, I'm happy to say that company is at 0 debt. And even we are not using the working capital where we are eligible for INR200 crores to INR300 crores working capital available, we are not using a single rupee for the working capital. Rather we are sitting on the cash, which will be utilized for this new expansions. And as per the current situation, current calculations, we are going to do all expansions with the internal accruals. And this year for current financial, we are expecting around INR250 crores to INR300 crores, if everything goes well, we will be spending INR250 crores to INR300 crores on this proposed expansions. The same thing in the next year also.
That's very good. And just my final question is, what would be the outlook for FY '24 from volume growth and from...
Volume growth is from 10% volume growth we are looking, until there is some major thing comes, the hurdle comes, otherwise we look the current situation, current projection, we can go easily 10% volume growth.
Okay. And margins, do you think we will improve from what we did...
The 5% to 7% margin should increase with the current levels. There is a lot of change, there is more than say 10%, 15% gap has taken place when you compare to the earlier and current. So that gap will not going to improve immediately. As per my view this current year there should be 5% to 7% improvement should be there in margins. And same way in the next year and next year also, it should be improved.
Perfect. Thank you so much for answering my questions. And congratulations that you are doing all these capacity expansions using internal accruals, so that is very good.
The next question is from the line of Rajiv Rupani, an Individual Investor.
Sir, I had a question on the subsidiary. Last time you had told the current products what we have in a subsidiary, so we can do expansion 15% to 20% by debottlenecking. So I would like an update on that. And derivatives were planned on those. Because right now in the con call you have told that 4, 5 new products are planned. And last time also you had told 2, 3 years, EDA capacity will double. So can you please clarify?
See Rajiv, there are 3 things, opportunity for them. Number one, if the situation demands, they can double the capacity because present capacity they already reached 80%, 90% the way the growth is taking place, the way the imports are happening, still this year we have seen 30,000 tons has come from outside. Earlier when we set up the plant, that time we said that imports are 30,000 tons. Today total [ consume ] become more than 45,000, thereby we could cater only 20,000 tons. Still 50% of the products are coming from outside.If this situation demands like this in the coming months, maybe 2, 3 months, the call will -- they may take a call after doubling capacity, that is number one opportunity. Number two opportunity is the new products, along with the derivatives, the new products which I was spelling out and sodium cyanide technologies, there are n number of products, I cannot disclose them, because of some restrictions, which you will hear maybe not more than 1, 2 months' time, you will hear everything, all these products will come into the place. We already applied for the land. Probably next 1, 2 weeks, we will hear that land allotment from the Government of Maharashtra, that is one thing.Third thing, we said that there is a debottlenecking. A part of debottlenecking already taken place. And this we cannot take because a lot of shutdown time is required, because of the market situation, we cannot close the plant for more than weekdays. We are just taking the shutdowns and installment, 1 month, 7 days, do some work, run 1 month and break 7 days and do some work. Like that, it may take another 3, 4 months to hear about the debottlenecking capacities adding.
Okay, thanks for the update. My next question on DMC. Sir, last time, you had talked about 3 more carbonates planned and maybe -- and you had told something of blending in diesel of DMC. And you had also said, we may plan for new 50,000 tons new plant for DMC. So could you...
Yes, still I'm telling, my statement this was basing on the lithium battery manufacturers. There are 5, 6 companies in the pipeline, everybody is talking past 5, 6 years we are talking -- we are coming up. Until otherwise somebody kick starts of manufacturing this, we cannot take the decision on that additional 50,000 tons. All these 6 people are talking, every 1 month we are getting the calls from them for all these Dimethyl Carbonate, Methyl Ethyl Carbonate, Ethyl Carbonate, and even NMP also. These 4, 5 products, one [ route ] is required NMP also. So the most positive thing is in last 6 months, we heard that lithium deposits in the various stage. One is I think Srinagar, and second thing is Rajasthan. I think these 2 states, if they get this lithium, this is very positive for the country. And whereby we have very positive thing if somebody starts -- even a single company starts is enough for me to go ahead.Recently, we had a discussion with Amar Raja, they were talking about very big plants and where we have the NNP, they are talking about more than 10,000 tons in over a period of time they may consume. So like that if all 5, 6 companies comes to them, then we will have all this thing. These are all subject to consumption, otherwise DMC is not consumed in the other fields in big quantities. Second thing, [ even this said ] but there is lot of -- we tried with the authorities, there's a lot of restrictions of this being a subsidiary incentive with Government of India. I don't think we should put our lace in that shoe, that's the reason we are just taking slow on that subject.
Okay. And my last question was on ACN. Now sir we have existing 9,000 tons and we are putting 15,000 tons. And sir Alkylamine has already 30,000 tons capacity, and they have talked about in their recent con call like they will have an edge over us because of their experience in making this product for a longer period of time and their capital costs have been absorbed. So could you throw some light on this?
If that is the case then all Methyl, Ethyl, everything is capital cost is absorbed and 0 today. But still I'm fighting with them, it's not like that, Rajiv. I'm telling means if you think and if you evaluate, last one year, why we are waiting, the existing plant we are not running also. You just go to the market, the import price is INR150. And the other cost also is INR150 only. So, we want to make the losses. Even the 9,000 plant also we are not running today because of the situation, until unless I get edge on this technology. So we are talking about the new technology whereby definitely we are sure that we have done this pilot plant. Now we are going for the main plant whereby you will see that maybe in the world 1 or 2 people must be using this technology once we start that by the time we start.
Thanks for the update. And my last question, all these new projects, which we've announced, Methylamines, DMA, ACN, DMAHCL and DMF. So, by when do these 5 complete?
I have told you, Butylamine will start the second half of this year. Methylamine we will finish by March 2024. Then next year we'll have Dimethyl Ether and ACN, both the project will -- should come parallelly. Then next after next year DMF and DMAHCL should come. If in between something new products, exciting product comes, and these product may take the backbench, and that will come in frontbench like this DME and Butylamine has taken the same place.
Thanks for the update.
The next question is from the line of Ranvir Singh from Nuvama.
I think most of question answered, but just one clarity. On EBITDA, you guided 22,000 ton as standalone and 26% on consolidated right for FY '23. And so, I was little confused because in press release you were saying that we'll have a pre-COVID level of EBITDA. And that is what you're guiding, but after 3 facilities -- 3 products are coming in Q1 FY '24, 3 new plants, that will join revenue stream. So I thought that would happen. Margin side, you have been shown the better margin than what we achieved during pre-COVID. So, is it just because that amines is in where EBITDA would be lower than what we achieved in pre-COVID?
Not like that. I'm just telling you a little conservative basis. This year you have seen standalone basis 19.55%. And all the time, I'm talking with a 22%. That means it will touch and it will add another 2%, so 22% should be sustainable for the whatever the products we are making in the amine standalone. And when we talk about the consolidated, definitely that Specialty Chemicals will have different margins, total different ballgame. There definitely we will have more margin, that's the reason I'm talking about 26% when you consolidate both, 25% to 26%.
Okay. Understood. And after Q1 once that new projects joins revenue stream, their scaling up will happen gradually. So what would be the capacity utilization roughly on a ballpark number by end of year? Just wanted to understand how fast this can be ramp up?
This Butylamine, I think by end of the year, we should be in a position to operating at 50% level, 40% to 50% level. And next year we should ramp up to 70% to 75%.
Okay, fine. That's great. And secondly just on Indian competitors, I would talk about that Alkyl Amine. Despite all these headwinds and challenges, they have been able to show sequential growth in revenue. So just I wanted to understand because our gap is at -- it's a big gap if you see the kind of decline we saw in Q-on-Q. So where was the disconnect or what is the differentiating factor...
Really I do not know. We'll have to see. I do not know what they're doing. What are the product they are making, we have not gone in detail. But in our this thing, if you see the consolidated both, so you cannot separate this company, this is part of the Balaji Amines subsidiary also. So why can't we talk on the consolidated numbers. So we are doing much better [Technical Difficulty] consolidated basis.
Okay. But otherwise in Ethylamines, have you been able to retain our market share or we see some...
Yes, we are selling. You can ask in the market. The problem is you are just being only numbers. If you go to the market, then you will understand or if you visit the plant, I request all the members whoever has asked questions, who are going to ask the question, I request members to visit the plant. If you want any assistance, you can drop a mail to our CS, and you -- once you see the plants, the level of the technology, the scale of the operations, everything you will understand once you visit the plant. So I wish all the members make one visit to the plant in the coming months. So there you will get the better understanding.
Sure. And one last one on related to that rejig in Directors and management. Just so I wanted to understand like in a CFO, we have now WholeTime Directors...
That also, I will tell you. I will tell you before you ask. What happened, see both the companies, we were having common Board. All 6, 5 Directors, 5 executive here, 5 executive there. So now what we are doing because that company is growing big way, and this company is also having various this thing. We Just want to divide the responsibilities. This Director is resigned here, and going to take additional responsibility in Balaji Specialty. And it is happened that he is holding that additional CFO portfolio. That's the reason people are talking CFO, CFO. Actually one Director has resigned here, and going to take care of additional responsibilities in the Balaji Specialty Chemicals. Here also, I was there as a Director. I have resigned from the subsidiary. And I'm going to give the full-time for the Balaji Amines. So we have just reorganized the total Board to give the -- take more responsibility to run in the profit level.
Understood. Because I was little, you know, that I could not understand that tenure of [ CFO ] appointment to be on 31st March on '26. So that I wanted to understand what is the remaining tenure. So it was because that earlier CFO had a tenure up to that March '26 and so this was not [indiscernible] calculation.
Many companies, you will see the CFO is separate from the Director, right. Here what happens is the Director is holding the CFO post. That's the reason it has happened. The Director is going to the other company, taking the additional responsibilities, and he is supposed to lead this post also. We have another Director who has given that additional charge of the CFO.
Okay. Understood. Thanks for clarity. And all the best sir.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Gagan Dixit for closing comments. Over to you, sir.
Thanks for all the [ participants for ] questions. Thanks to the Balaji Amines management for sharing their views on the company's fourth quarter fiscal year 2023 performance. We take this opportunity to thank Mr. Ram Reddy and his team once again. Any closing comments, sir?
Yes. Thank you. Thank you, Mr. Gagan. I thank you all these stakeholders, all the shareholders, investors who were with us for the years. And once again I request them, if anybody is interested to visit us, they can visit, and also I -- probably some of the people who have missed the questions, they can send the mails to the cs@balajiamines.com. We will love to answer all their queries anytime, any type of questions. Thank you once again. Thank you very much.
Thank you very much, sir. Thank you. On behalf of Elara Securities Private Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.