Aether Industries Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Aether Industries Ltd (AETHER) Q4 FY22 Earnings Concall

 

Q&A Highlights:

Gagan Thareja – ASK Investment Managers – Analyst

• Would growth get constrained due to lack of capacity for the first 3 quarters of FY23?

Rohan Desai – Whole-time Director

• Currently at 80% of utilization.
• Constantly debottlenecking plants.
  • Rearranging equipment to increase capacity.
• Expects to reach 90-92% capacity in FY23.

 

Gagan Thareja – ASK Investment Managers – Analyst

• Breakdown of sales growth into volume growth and price of sales mix for FY22?

Rohan Desai – Whole-time Director

• Price increased by only 1.5-2% on an avg. overall.
• Whole growth in FY22 was due to volume.

 

Gagan Thareja – ASK Investment Managers – Analyst

• What’s the additional capacity given by the two new plants under construction, and operational and utilization time frame.

Rohan Desai – Whole-time Director

• Site 4 gets operationalized towards end of FY23 and site 5 towards the end of FY24.
• Both units combined would give 9,000 metric tons manufacturing capacity.
• To be optimally utilized in two years once commissioned.

 

Yash Shah – Investec India – Analyst

• Product portfolio outlook over the next five years?

Rohan Desai – Whole-time Director

• Will continue to add products in the pharma and agro.
• The eventual goal is to balance out all the buckets and make it equitable.
  • Expects non-pharma, non-agro sectors to rise in future.

 

Yash Shah – Investec India – Analyst

• IPO proceeds utilization and capex for FY23.

Faiz Nagariya – CFO

• Started using the IPO proceeds; paid off the loans.
• Total capex is expected to be INR200 crore.

  

Nitesh Dhoot – Prabhudas Lilladher – Analyst

• Reason for 18% decline in employee cost in 4Q on a sequential basis and other expenses declining 9%?

Faiz Nagariya – CFO

• Employee costs have been capitalized for the R&D and new plants that are coming up.
• Other expense declining is due to the plant commissioned in Jan. 2021, which is now in-house and there is lot of savings in costs.

 

Nityanand Parakh – Individual Investor – Analyst

• Vision for next 3-5 years in terms of new products.

Rohan Desai – Whole-time Director

• Going to launch 5 new products in FY23; advance intermediates.
• In future would maintain the same rate of product introductions.

 

Nityanand Parakh – Individual Investor – Analyst

• Is the new capacity fungible or a dedicated capacity for some products.

Rohan Desai – Whole-time Director

• All of AETHER’s manufacturing facilities are fungible and multipurpose across the core competencies it’s designed for.