Mitsu Chem Plast Ltd Q2 FY23 Earnings Conference Call Insights

Key highlights from Mitsu Chem Plast Ltd (MITSU) Q2 FY23 Earnings Concall

Management Update:

• [00:04:13] MITSU said it’s diversifying into new product category of plastic pail that’s mainly used for packaging of lubricants, paint, ink and food for the FMCG industry.

Q&A Highlights:

• [00:10:06] Nairit Gala from TSG Capital asked about FPO approval and the timeline for it. Manish Dedhia Jt. MD said the company received SEBI approval in Oct. and added that the exact date cannot be predicted.

• [00:14:08] Yashwanti Khedkar enquired about the company’s outlook on the RM side. Manish Dedhia Jt. MD replied that lot of commodity prices are going down and many companies are benefiting from it. MITSU added that it will also take advantage of the same.

• [00:15:04] Yashwanti Khedkar asked about the reason for 10% increase in employee cost. Manish Dedhia Jt. MD answered that many new recruitment has started and MITSU is also planning to have a big expansion.

• [00:16:37] Yashwanti Khedkar asked about the margin outlook for FY23 and if 9% half yearly margin will be maintained. Manish Dedhia Jt. MD replied that 3Q and 4Q can improve much better all over the industry. On 9%, MITSU has to improve from there and it’s not the benchmark.

• [00:25:11] Abhishek Agarwal of Prithvi Finmart asked about revenue de-growth QonQ and YonY and how the next quarter will look like. Manish Dedhia Jt. MD said that MITSU generally goes with the whole year than the quarter. MITSU added that it will achieve the same growth as it is currently and is on the growth path.

• [00:29:01] Abhishek Agarwal of Prithvi Finmart asked about the revenue breakup industry wise, and by geography. Manish Dedhia Jt. MD answered that MITSU is not exporting its goods to any of the country but giving to exporters who make chemical, pharmaceutical product and export. MITSU’s major market is Maharashtra, Gujarat for packaging industry. In hospital furniture, MITSU supply to all over India.

• [00:33:13] Abhishek Agarwal of Prithvi Finmart enquired what EBITDA margin MITSU can expect in next 2-3 years. Manish Dedhia Jt. MD replied that it will be much better than the last year EBITDA. The market is improving in many aspects and MITSU is also expanding.

• [00:37:08]  Abhishek Agarwal of Prithvi Finmart asked about the revenue breakup of end user industry. Manish Dedhia Jt. MD said MITSU is supplying 85% to blow molding packaging items. Around 9-10%, MITSU is supplying to hospital furniture vertical and around 6-6.5% are other vertical.

• [00:37:58] Akhil Parekh with Centrum Broking asked about the absolute volume numbers of 2Q23 and 1H23. Kashmira Dedhia VP Accounts answered that in volume, MITSU grew by 5% vs. 2Q22 and for 1H23, MITSU grew almost 5.5%.

• [00:52:02] Aditya Jain of AJ Capital asked about the FPO side, as the company has already got approval, how much time does it take to launch. Manish Dedhia Jt. MD answered that it will take some more time and it will come up very soon.