Privi Speciality Chemicals Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Privi Speciality Chemicals Ltd (PRIVISCL) Q4 FY22 Earnings Concall

Q&A Highlights:

• Manish Gupta from Solidarity Advisors asked that when PRIVISCL can commercialize its first biotech product. Narayan Iyer CFO said that it expect its experience in the biotech space to give the company a positive output and it should be ready to start commercializing thereafter, somewhere from ’24-’25 onwards.

• Manish Gupta from Solidarity Advisors enquired about the new products in the pipeline and if it would really help PRIVISCL’s to reach revenue target of INR3,000 crore to INR5,000 crore. Narayan Iyer CFO replied the PRIVISCL has products in the pipeline and it expects these products to help move from the INR3,000 crores expected to achieve in about next 3 years and move steadfast towards the INR5,000 crore mark.

• Pratik Singhania of SageOne Investment asked about FY23 volume growth outlook for the overall business, given the new capacities coming up. Narayan Iyer CFO answered that PRIVISCL expects volume to go up by about close to 15-18%. This means from the 29,432 tons achieved, to inch towards 35,000 tons.

• Pratik Singhania of SageOne Investment also asked if PRIVISCL expects gross margin to have a dent in 1Q23, given the current raw material price trend in April. Narayan Iyer CFO answered that in Q1 there may not be so much of a dent, as the pine based material has a very long gestation time of sailing. So probably in 2Q23 it might have a dent.

• Pratik Singhania of SageOne Investment asked if contract renegotiations are happening on a contractual or a spot market basis. Narayan Iyer CFO said that PRIVISCL continue to be in that 65-70% of contractual sales and balance 30-35% is something which is well in the spot market.

• Deepan Shankar from Trustline PMS enquired about the quantum of price increase taken in 4Q22 and has it been fully incorporated during 4Q. Narayan Iyer CFO said that all contracts started from 1st January, 2022 are at higher prices, ranging from 5-8%, depending on the segment and the product.

• Deepan Shankar from Trustline PMS asked when the company is anticipating to see the expected price increase in CST. Narayan Iyer CFO replied that PRIVISCL is expecting the increase in 2Q and 3Q.

• Chintan Patel of Satco Capital Market asked about the reason for subdued topline numbers sequentially. Narayan Iyer CFO replied that post the war getting declared, most of the Europeans have not been taking in the volumes and spot market also, it became a little bit wait and watch situation.

• Chintan Patel of Satco Capital Market queried on the show cause notice from the Maharashtra Pollution Board.  Narayan Iyer CFO clarified that is normal routine matter which is happening. PRIVISCL has already addressed it and have responded to the said notice that was received. There’s nothing serious as hyped by the media channels.

• Riju Dalvi asked about the breakup of volume data for 4Q22 and FY22 year. Narayan Iyer CFO said that volume for FY22 for INR1,402 crores of sales done, that volume is 29,432 metric tons. And for Q4 prima facie, it is 7,599 metric tons culminating to a sale of about INR374 crores.