Q4FY24:
• The company will invest ~₹600 Mn to augment its production capabilities
• New markets added: Poland, Italy and Russia
• We have achieved highest ever revenue in Q4 FY24, driven by the addition of new client, expansion of our product line by adding 10+ products, and the widening of our distribution channels
• We’d also like to emphasize that the emergence of new players in the paint industry presents a significant opportunity for us, given our established reputation in the market.
• Furthermore, our recent expansion of the procurement network in the Middle East ensures that we can meet client requirements and acquire minerals at competitive costs, thereby enhancing our throughput margins.
• Plans to invest in expanding capacity in existing locations as well as new locations. Additionally, the company further plans to acquire mines
• GUIDANCE: Management expects the revenue to grow by 10%-15% for the year FY25 over FY24, mainly on account of evolving product mix. EBITDA margin for FY25 to remain in a similar range as existing with likely improvement of 30-60 bps
CONCALL NOTES:
• EV product development details: - Those products are still under development. We are still working with international companies to engage with them in terms of certain technical collaborations for developing certain specific products for the EV battery and the semiconductor industry. So, it is still under process, and we are not very sure with the timeline for it, but we are expecting it to happen sometime towards the end of this financial year.
• JSW paints: we are supplying quite a few products to them on a regular basis
• Grasim: We have already started supplying to them. And sooner when they grow in terms of their capacities and they build upon their, you know, the other plants which will start operations in the coming months and years, we will continue to supply them, but most of our grades have been approved in this particular customer.
• Retail products: 20 Microns focus right now is on product development. So, we are at that stage where in both the MINFERT business and the construction chemicals business of 20 Microns, we have tried to create range to offer to our distribution network where they have an expanded product available to cater to the market. So, our first focus was to develop those kinds of products for the market. Since we’re already now almost there with that product range available with us, where we still have a few more products which we will be adding in this financial year and probably next financial year.
Our focus will be to expand the distribution network Pan India. We are right now focused on certain smaller states only right now, but as and when the capital gets generated and we will be able to spend more money in terms of the branding when the right time arises, we will want to become a household name in the future, but not immediately. We don’t want to just jump out there because it’s a huge market. It’s a good pool of different players out there in that market. So, we are trying to find our niche in that particular market, and we are trying to establish ourselves slowly and steadily to reach and become a household name.
• EXPORTS: Looking at the international markets, our focus has shifted from the US, the North American markets and from the Western European markets more towards the Middle Eastern markets, towards the South Asian markets and the far east markets and the Latin American market. So, these are the areas where we are going to be focusing more on, because these are the growth opportunity countries which we are seeing quite some traction in and there the product acceptance and somewhat the freights are also kind of helping us out in terms of getting some market developments and market shares out there. So, these are the areas we will be focusing on in the coming months.
15% sales from exports in overall revenue – 95crs.
For all the export materials, they are all based upon Indian raw materials.
• 20% of sales comes from our value-added products (functional additives) and about 80% comes from our industrial minerals.
• 14% volume growth in FY24
• In House mining operations: Right now, we are operating the Kaolin mines and the remaining of all the mines, we are, you know, it’s not fully operational right now. So, we are currently using about 50% of our mining material in-house and 50% we are procuring from outside.
• Red sea crisis is affecting the company
• CHINA + 1: So, right now, majority of the minerals that we are currently producing here in India, China also has similar kind of minerals available with them. Now, when we look at the Indian markets and the export markets, many of our customers who were dependent upon certain imports of Chinese goods, they have moved to Indian products or they have moved to some other products because of certain reduced dependency upon the Chinese products, be it the trust factor or be it the logistic issues or be it the pricing related issues. So, that has kind of had an added advantage that we have started to see, I wouldn’t say it has been completely out there, but we have started to see that change from our Indian customers and from some of our Latin American customers and some of our Middle Eastern customers. So that thing we have already started to see in the last few months. And we hope that we can continue to try to transform our products in such a way that we kind of develop an edge over certain Chinese products that are out there in the market, and we are kind of competing with. Because with now America and Europe creating an antidumping charge on certain Chinese products, there is a possibility that Chinese products might get dumped into the other Asian markets. And so, we have to get ready for that in the coming future. So, that is the reason that we are gearing up to have better products than the Chinese products in most of the customers that we cater to.
• To increase our capacities, we will not need to borrow. Through our internal accruals only, we will be doing the CapEx in the next couple of years.
