Balaji Amines Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Balaji Amines Limited (BALAMINES) Q3 FY22 Earnings Concall

Management Update:

• The company expects operating margins to inch upwards in coming quarters on back of moderation in prices of key raw materials, favorable product pricing and better product mix going ahead.

Q&A Highlights:

• Prateek Chaudhary from Saamarthya Capital asked about the comment on doing INR2000-2300 crore turnover for the year and what’s driving the scale up. Ram Reddy MD answered that it’s due to the capacity utilization. There is also prices that have been increased unlike previous years that’s adding to the value growth.

• Sachin Kasera from Svan Investments  asked about the production reached for the quarter and nine months for Acetonitrile. Ram Reddy MD answered that it’s just 6 months operated, about 170-180 days at the rate of nine-tenths of production. Now it has started properly and in 4Q, it will be more than 10-11 tonnes per day.

• Sachin Kasera from Svan Investments  asked about the utilization for DMF in next year. Ram Reddy MD replied that in 4Q the company expects to operate in a minimum 70% capacity and in the next year, the company expects to be in a position to operate 70-80% if things are as is.

• Sachin Kasera from Svan Investments enquired about the capex for FY22 and plans for FY23. Ram Reddy MD said, INR236 crore is already done and about INR15-20 cores will be done in 4Q. And in FY23, there are lot of factors to consider to calculate the capex.

• Jaiveer Shekhawat from Ambit Capital asked about the ammonia price increase and what’s propelling that. Ram Reddy MD replied that it’s because of the gas shortage. The company expects that after March, it should softening and the relief given in the budget for methanol and acetic acid should compensate to soften the ammonia price increase.

• Reena Shah from Elara Capital asked about DMC what’s the potential market size the company is looking in India or globally. Ram Reddy MD said that as of today 8,000-9,000 tonnes is already there in the country and globally also it’s 8,000-10,000 tonnes. The company expects it to go to 10,000 to 12,000 tonnes, which could go up to 15,000 tonnes also after some debottlenecking.

• Shanti Patel from Shanti Patel Investment Advisors asked that if everything goes in company’s favor, and there is good demand for the product, what will be incremental revenue and profit for next year. Ram Reddy MD answered that next year, with the addition of DMC and existing plants, the company expects minimum INR2500 crore revenue and 25-26% EBITDA margins on a consolidated basis.