Nissan_Presentation_Dec22_Results.pdf (1.8 MB)
The above presentation published post December 2022 results by Nissan has some relevant information on Bharat-Nissan JV (Refer Slide 32-40)
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Nissan-BRL JV is likely to start commercial production in Q4 FY 23 (Indian FY 23) and the JV will manufacture AI for patented products like GRACIA, LEIMAY, QUINTEC etc for exporting to Nissan
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Total Plant will cost around 500-550 Crore (including working capital and IDC) and total debt will be funded by Nissan chemicals (hence we assume cost of debt will be lower) Total equity investment will be around 140-150 Crore.
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As per slide 33, GRACIA, they expect it to reach sales of 600 crore plus from current levels (though absolute value not mentioned). Most of the molecules have been growing at good rate (90-100%)
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Nissan is manufacturing newly launched molecules like GRACIA and QUINTEC (launched in 2018 and 2019) and not mature products thus the runway for growth will be high given that these molecules will be early in their lifecycle.
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Nissan is targeting peak sales of close to 2000 Crores over time (AI for many of them may be manufactured in JV)
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According to Nissan’s projections, JV’s contribution to Nissan at OP level is likely to be 60 Crore in FY 24 and 150 Crore in FY 25. BRL thus will see sharp increase in contribution from JV in FY 25.
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Over and above that BRL will make intermediates for many of the AI for patented molecules and benefit of which will accrue in standalone entity
Overall, post couple of years of breather BRL seems to be at interesting juncture where growth journey can resume.
Disclosure: Invested with decent allocation from much lower levels.