Dharamsi Morarji Chemicals (DMCC)

(Rohit Balakrishnan) #61

Q1 FY18 results are out, as expected the numbers are weak given the planned plant shutdown. As per the Fy17 press release the shut down was supposed to be for 30 days.

However one very interesting thing in the result is the gross margins. This quarter the gross margins are at 59% which have been the highest in last so many quarters.

I have been tracking the margins (Esp Gross margins) for many chemical co’s such as Aarti, Atul, etc this quarter the margins were bad for many of them. DMCC’s gross margin however this quarter bucks that trend. Would be interesting to understand what is the reason. Given the poor headline numbers, the stock may tank tomorrow,

Discl : Invested

(khushi) #62

Girish Gulathi sold off his holdings before 30th Sept. His name missing from September Qtr share holding.

(Rohit Balakrishnan) #63

Q4 results were very good, gross margins have revived to 40% + and EBITDA margins are 18%. The full year numbers look subdued owing to the shut-down taken in Q1. However I feel the gross margin improvement is positive given Borax Morarji’s gross margins are lower.

Though one needs to understand the capex part. There is some addition to the gross block, but the overall quantum seems small. Thus need more clarity. Strong reduction on expenses also especially other expenses and some debt has been repaid too.

Discl: Invested

SEBI Registered Investment Adviser

(praveen_sham) #64

Hi Rohit,
Do you have an idea when Borax morarji division will become profitable? Also, can borax morarji division be as profitable as indoborax? ( Management tries to avoid answering this question).
Again, will this year also plant will go under shutdown ?

(Rohit Balakrishnan) #65

Dont think they will have a shutdown this year. Regarding Borax’s margins being similar to Indo-Borax- I don’t think they skirted the issue, they have answered it clearly on their con call.

I don’t know when Indo Borax will be profitable, hopefully soon :slight_smile:

(shikhar mundra) #66

great results

Revenue - 60.38 cr vs 39.47 cr( yoy)
EBITDA - around 19 cr.
Margins - more than 30 %
PAT - 13.51 cr this quarter vs 12.25 cr last whole year!

Need to understand this sudden jump in Operating margins. OPM was 18 % march quarter.

Disc - Invested

(shikhar mundra) #67

the company had a plant shutdown last june quarter(june 17) . so the figures are not comparable yoy . but with respect to march quarter we still have a 14 percent jump in margins. 7 % is with respect to the RM cost , the rest seem to be due to bit of an operating leverage.

(Rohit Balakrishnan) #68

Yes the results have been quite good. It seems some benefit from the Borax merger are coming through.

(Ayush Mittal) #69

Can’t say if its due to operating leverage or the price increase happening in the chemical sector?

Perhaps only if we have quantitative details, we can deduce the above

(Rohit Balakrishnan) #70

Company is doing a call- we can have our questions answered then.