Meghmani Organics Ltd

(Shivan Sarvaiya) #192

Need help in understanding the below:

As per my understanding, the pigments & agrochemicals segment is under Meghmani Organics Ltd. (Standalone) & Bulk Chemical segment is under Meghmani Finechem Ltd (Subsidiary)

As per Management, the current 640 crs capex plan is for caustic soda & hydrogen peroxide (500 crs) + CMS (140crs) businesses all housed under MFL.

When I look at the FY 18 AR — under MOL standalone financials there is addition of 110 crs in the gross block & under consolidated financials the addition is of 115 crs.

For FY 17 the capex is 54 crs in standalone books and 143 in conso books

What I am not understand is that if the capex plans are for the bulk chemicals division (MFL) then why is there so much capex being done in the standalone company and practically no capex in the subsidiary in FY18.

Can there ever be a case where the capex for a subsidiary can be done in the holdco?

Please correct me if I am wrong somewhere.

(vikas sinha) #193

Q1 Results

The next board meeting of Meghmani Organics is to be held on August 8, 2018 for Quarterly Results

(Sarabjeet Singh) #194

You can refer following thread on various Chemical prices, which includes Caustic Soda as well

(bala.y.krishna) #195

I did search to find out immediate competitors of Meghmani organics in moneycontrol looks like it’s giving almost all the chemical companies list where as i’m intrested to find out the immediate competitors of Meghmani and the business advantage of it’s peer’s. Any idea’s/help would be appreciated.

(Sarabjeet Singh) #196

Since company operates in three segments ( Dyes , Agro Chemical /Basic Chemical ( Caustic Soda etc) ) , so you will get wide range of competition.

Hi Guys, I was going through AR and noticed following regarding per unit price for purchased and own generated power. When purchased power is cheaper then why are they generating their own power at a higher cost ? Though the amount is much lesser than purchased one, but still its significant.

Any specific reason for the company to do this ?

(vikas sinha) #197

Must be backup use, methinks! It is much cheaper than the Diesel option, used in previous year. Also, it makes up less than 0.5% of total consumed units.

(duranvskp) #198

Q1 2019 results

c1fa6dc4-c76b-4a34-9f1f-24ac641a9555.pdf (784.1 KB)

(vikas sinha) #199

80% YoY PAT increase, as expected, flat on QoQ.
Margins improved much.
Overall good results!

Disc: Invested.

(NiveshakNiti) #200

Though the results are good but stock price is still moving in negative direction. Would love to know the reason behind it. It has been range bound for long period now and not showing any improvement sign even after the fantastic results.

(Raj A A) #201

Q1 FY19 results are flat and below market expectation. During their last concall, they informed that left over billing during Q4FY18 will be billed during Q1 and expected that Q1 result will be better than Q4.FY18. Investor presentation by the company shows segmantal results are tad lower than Q1 FY 18 Fire insurance compensation has given a Other income flip which has boosted the EPS. Overall we have to see if there is any improvement in Q2 and also monitor caustic soda prices .
Dscl: Sold major holding immediately after the announcement of results and want to add around 80 to 85.

(vikas sinha) #202

I do not see any difference QoQ, w.r.t exceptional or non-operational gains!
They have stated insurance has been adjusted as a minor loss, of 1.12 Cr, since compensation was lower than the claim.

(vikas sinha) #203

How is this true?
Let the numbers speak for themselves!

Q1 Results presentation:

(virajkhatavkar) #204

Some highlights from today’s con call:

  1. There was a plant shutdown for routine maintenance and technical upgradation which affected some topline and bottomline. Rest assured there weren’t any issues but just normal technical maintenance. Management affirmed that every chemical company has to go through this shutdown in the year for technical maintenance.
  2. The branded sales for agrochemicals in last full year were ~80 crores while they are at ~40 crores in the first quarter this year. Management expects the total branded sales for current financial year to be around 120 crores.
  3. In the last year the caustic soda prices were tremendously high due to China shutdown and resulting euphoria. In Q4 last year the margins were above 40%. This year the management expects the margin to remain around 35%
  4. The planned capex of 650 crores is underway out of which about 175 crores has already been started. The majority of this 650 crores capex is focused on basic chemicals division. There is further capex planned for other segments. Management is awaiting for environment clearance and it will be announced as soon as they get the due clearance.
  5. Management is fairly optimistic on its target of 1000 crores in revenue from each segment by 2021
  6. After the last year China shutdown, new clients are contracting with Meghmani on differential basis. Some are doing spot-basis while some are doing it just for a quarter and some for 6 months.
  7. Management further affirms that the situation in China won’t improve due to more stringent pollution norms. Other than that the overhead in China has increased and India is going to be the larger hub for chemicals in coming years.

(Jiten Parmar) #205

Thanks Viraj for these updates.

Few more points.

  1. Pigment CU - 75%, Agro - 57%, Basic Chem - 86%
  2. CMS expansion (Dec 18 target) will aid in captively consuming Chlorine.
  3. Cons debt - 385 cr
  4. With current expansion plans - peak debt 700 cr
  5. RM source - only 10-15% from China

(sjsandesh) #206

Investor Presentation:

(S_Banerjee) #207

Company announced today the amalgamation scheme between Meghmani F

inechem and Meghmani Agrochemicals.
How this may benifit overall business process? Any thoughts please.

(virajkhatavkar) #208

Here is the link to the conference call for Q1:

(Jiten Parmar) #209

Still need more details on this. But directionally, looks like a good step. Can comment more, once all details are available.

(Janme) #210

I was going through the 2017-18 annual report of Meghmani. On page 12, it is mentioned that 4 Independent Directors resigned within a span of seven months from Nov 2017 to May 2018. Does any member know the reason behind this?

Also, in next page, CFO of the company has also resigned in the same period. Does the company gave any reason for the same?

(thakurvi) #211