Both the management agreed on headwinds and likely restoration in two quarters. About overcapacity of Ethyl amine, it constitute 10% of overall capacity of Balaji amines. I have invested (will exit if stop loss triggers) due to Volume action + new capacity additions 1) n-Butylamine : The plant is expected to be commissioned during the fourth quarter of financial 2023 and '24. 2) Methylamine : The project is likely to be commissioned around the second quarter of FY 2024 and '25. 3) Dimethyl ether : The project for manufacturing Dimethyl ether is initiated to be set up in Unit IV and the detailing and engineering is completed and the company has started civil works. The plant is expected to be commissioned during the first half of the FY '24 and '25 (end of FY 2025). The company is proposing to take up the following projects at Unit IV.
o N-Methyl Morpholine (NMM) - 3000 TPA
o N-(n-butyl) Thiophosphoric triamide (NBPT) - 2500 TPA
o Pharmapure Povidone (PVP K-30) - 4000 TPAAll these products are first time in the country,
Mr Kirit Patel on concall -In terms of the structure of the competition, well, as you know, we have two players in domestic market, and the rest are from the Chinese or the Europeans active in the market. Over the last year or so, over the last 6 months, we have not seen much activity for imports because our competitor has increased this capacity and has been able to push out the imports to some extent. However, we have managed to retain our market share in this product albeit with some sacrifice in margins. Going forward, given that now the capacities are more or less balancing out between the two domestic players, and we have extra capacity coming on because of the new plant which we have just commissioned in October, where we have added capacity, will give us some headroom in terms of growth in the future.
Mr Ram Reddy - Earlier, I thought that our countryās consumption was 90,000 tonnes. So my 30,000 tonnes can be adjusted anywhere. That was our intention, thatās the reason we are very comfortable, and we did not look seriously on the export market. Because in the total 90,000 tonnes, we can fit somewhere. But these people started dumping like anything. Like Saudi, Iāll give you an example. In Saudi thereās a consumption, one customer is
there, they are selling at INR 170 ā INR 160. And in India, theyāre selling at INR 70, INR 80.
That has given us the reason for going for the reach registration and to scout outside the country. And last month, we have given in very Saudi Arabia, about 60, 70 tons, I have, exported to those Saudi Arabia, much better price.
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Exactly my point. If we combine the capacity of alkyl and balaji and then if we consider this dumping by chinese then there is hardly and scope for a long term story. And Kirit Patel has said that these kind of situation do come for 2-3 years for every decade. Its very difficlut to find a multibagger or a consistent compounder in such kind of sector with such nature of businessā¦Or am I reading this all wrong? I would like to be in such companies where I can stay invested for a very long time without worrying about market size and growth of my investee companiesā¦It may be inappropriate but with this background requirements, how would you judge Deepak Nitrite or SRF and P.I. Industries?
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SRF is a different breed according to me. It is the king of chemicals!
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looks like the results are out with better PBT. Key notable is COGS has drastically reduced YoY resulting in much better Profit though revenue is down. Is this the case with Alkyl as well?
From a stage analysis point of view, Balaji Amines seems to be moving to stage 2 after months of stage 1 consolidation.
Hope balaji show good growth going forward
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Unable to find Q1,Q2,Q3 - 2023 conference calls. Was that happened or the company skipped to conduct the conference calls during this quarters
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Just went through the Q2 FY 25 concall. I am a bit concerned about the way the management spoke with one of the investors.
Maybe the investorās questions were ignorant (I donāt think they were) and maybe he was asking things which cannot be predicted before plant is operational. I have seen many investors and analysts ask much more basic questions in other concalls and generally good management answer them politely.
The company management spoke things like, āyou should be aware of whatās happening in the country then you wouldnāt have asked such questionsā, or ādonāt waste your and my timeā. To me, this looks like a big red flag.
Otherwise, didnāt find too much negative in the results and future plans. Lot of capacity coming up in a few years. Company is waiting on approvals and that was one of the concerns from the investor. Other than that, I was hoping to get an update on the hotel business but there was no updated provided around that.
Hopefully, I am not reading too much into it. Would love to hear thoughts of other members on this.
Disc: invested and thinking about exiting.
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Ram Reddy is a decent guy. he speaks bluntly and delivers sincerely. Been listening to his concall and interacting with him via email for the last 14 years. Even I was slightly surprised after he picked on this investor. They could be having some old issues.
dis: holding the stock for years.
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Thanks for sharing your views. Went through their conversation again and did some research. There are a couple of reasons, which, I think could be the reason for his anger.
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Question on Balaji Specialty Chemicals: Balaji specialty chemicals is not a wholly owned subsidiary of Balaji Amines. Balaji amines holds 55% stake and rest is owned by Promoters. The investor criticised the 750Cr investment in Specialty Chemicals saying it generates EBIDTA of 3Cr only. This could have felt like a personal attack on the management.
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Question on expected margins: Many investors were asking expected revenue and margins on DME and ACN plants. Management kept on saying its too early to say anything. When the investor in question again asked the same question it might have triggered the management a bit more.
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From a promoterās perspective, framing the entire strategy and capex over the last 2ā3 years in a negative light might seem overly critical. While the questions raised by the analyst are justified, they could have been posed in a more polite and constructive manner. Itās important to acknowledge the managementās accomplishmentsācompleting significant capex with minimal debt while maintaining over ā¹300 crore in cash as of the September balance sheet. That alone is a commendable feat in itself!
The company is currently in a position of strength, with cash reserves and no substantial debt, providing it with optionality and flexibility for future growth. Not all businesses achieve this balance. Many struggle to generate returns exceeding their cost of equity, while some exceptional ones not only deliver higher returns initially but sustain them on incremental capital. From my perspective, the management demonstrates the ambition and drive to fall into the latter category.
At the end of the day, businesses are not static entities like bonds; they need to take calculated risks and show resilience through their actions. Not everything happens the way you initially planned.
Disclosure: I have held this company in my satellite portfolio and have recently started building a position in my core portfolio as well.
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Everyone has bad days and even as a reader of such concalls Iām appalled by quality of questions. For example Iām not sure why analysts calls after calls ask for margin and revenue guidance when answering them is totally pointless. They might as well ask for guidance on stock prices.
But then many analysts attending small companies concalls tend to be very inexperienced and they are after specific data points that they can go back and plug into their valuation models. They are not much interested in big picture of the business.
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Recent VC with investors/analysts any body attended on DEC 16th kindly share some points discussed in it .
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Any update why today -10 % down
May be due to amines ā¦ going forward not going to use in pharma APIā¦
Please advise
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5.27% stake is owned by FIIs may be some FII sold some as they are on selling spree. as delivery volume is ~50% as usual average.
Is not mandatory for companies hosting earnings call to upload audio recording of the same? I canāt find the audio recording or the transcript of the earning call of the last quarter.
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