What I’ve seen is the company knows that they can’t rely on dsda and phenol alone since the prices fluctuate so often. Next year/when the Corona situation improves dsda demand should return(not at 16 USD though) and phenol will return to being a cash cow soon enough again too… In the mean time IPA returns will cover this. Basic chemicals margins have improved and demand isn’t badly affected but it’s not a growth driver. However, what I’m happy about is the company knows all this… right now they are concentrating on specialty chemicals (agro and pharma) where margins and demand is increasing… they’ve also almost completed brownfield expansions in the same and their R&D has doubled too hence FSC contribution will only increase from now on. IPA is another example of how the management are capable to adjusting to short term opportunities and the numbers here will make up for the lower demand and margins in phenolics this year. What I see is a company moving seriously into fine and specialty chemicals as a growth driver , with basic chemicals as a predictable safe base, performance products as a wildcard which will average out to a decent return on average over a span of time and a phenolics venture that can return huge returns in both short(IPA) and long term post forward integration. I for one have been waiting for more concentration on FSC and I’m glad the management are doing the same. And tbh I did not find anything lacking with the company’s communication to investors either… we had a Q1 update, an AGM, a seperate investor update and a concall and after all of those I feel like they’ve given us too much information if anything 
Disc: invested. So I am very biased
Note: I have learnt not to bet against the management. They know how to adjust to any situation thrown at them in the past and have done admirably. They gave a hint regards how phenol would be handled… demand domestically went down so they increased exports since the demand outside India increased. Due to logistics issues with the lockdown it dint work out in Q1. I wouldn’t be surprised if it works in Q2(and already expecting FSC and IPA to outperform and basic to be consistent and PP to atleast recover a little from the one-off that was last quarter)
14 Likes