Q1FY25 results update and personal opinion:
- Growth in revenue and profitability on a YoY basis.
- Slight improvement in profitability on a QoQ basis.
- Q2 and Q3 results of FY25 should also be substantially better since management has guided OPM of 10~12% for FY25 whereas FY24 OPMs for these quarters were in single digit.
- Topline should show better growth in the Q3 and Q4 as a multi-product Hydrogenation Plant at Vadodara, Gujarat commenced on 30th July, 2024 and trial runs are on at the single dedicated Specialty Aroma Chemical plant at Mahad,Maharashtra.
- If camphor pricing improves in the next 3 quarters, OPM might surprise on the upside as that division contributes one-third to the revenue and has been breaking even at the EBITDA level.
Q1FY25 Conf Call Summary [09-Aug-2024]:
- Camphor pricing improved along with rise in the RM prices
- Holding to earlier EBITDA guidance: 10~12% for FY25. Confident to meet EBITDA guidance for the next 2 quarters along with top line growth. Q4 view shall be possible around Q3 period.
- Expect revenue growth in H2FY25 as the Hydrogenation facility [Vadodara, Gujarat] shall contribute from Q3 and speciality chemical facility [Mahad,Maharashtra] will contribute in H2FY25 to the topline. Intend to run the new plants to full capacity and stabilize in 3~4 quarters after they start. Incremental depreciation from these facilities will be 8~10Cr.
- In the near term, plan to reduce debt further and utilize the capex done till now before planning for any more capex.
- Peak revenue possible at current prices and capacity: 1200 Cr.
Disc: Invested.