Average Results .
Topline grew but expenses eating into profits.
Let the shipping situation normalize then we will get the clear picture.
Hi @Malhar_Manek,
I am tracking this as well, so I will take a stab at this.
- No, neither in their investor presentation or in concall.
- Nothing of this sort mentioned in this concall or the one in q1fy22 and q4fy21.
- As per their drhp and latest concall, they are completely importing it from South east Asia.
Astronomical lauryl alcohol prices, very high freight and shipping charges have devastated the margins. As per management, ability to pass on raw material prices is very much intact, but with lag.
2 Likes
4 Likes
Hi All,
I am also trying to understand this business and looks marginally overvalued now, after reduced margins in Q2 FY22.
Generally, I find it difficult to value the business which do not have more than 5 years of history. Most of the time, I have seen that, after IPO, share prices do not sustain once the real financial picture starts emerging, so I have a policy to stay away from the business, unless it completes 5-6 years after listing.
I would like to know, if there is any better method to value the business which is listed just 1-2 years back, if one do not have 10 years / 5 years financial ratios and data.
Disc : Under watchlist but looks overvalued.
Total volumes stood at 55,272 MT for Q1FY23 as against 59,864 MT in Q1FY22, down by 7.7% YoY and 3.9% on QoQ basis
· Total Revenue (including other income) stood at Rs. 1,156.9 Cr, a YoY growth of 39.2% and QoQ growth of 9.7% on account of improved sales mix and realizations
· EBITDA stood at Rs. 146 Cr, YoY growth of 29.2% while being flat on QoQ basis
· Achieved highest ever quarterly PAT of Rs. 100.4 Cr, YoY growth of 30.7% and QoQ growth of 2.0%
ROW markets de-grew by 5.5% YoY
Indian market grew by 2.6% YoY
AMET market de-grew by 21.3% YoY
Performance Surfactants volume stood at 35,443 MT for Q1FY23, down by 8.6% on a YoY basis
Specialty Care Products volume stood at 19,829 MT for Q1FY23, down by 6.0% on a YoY basis
· EBITDA/MT stood at Rs. 26,418 for Q1FY23 as against Rs. 18,879 in Q1FY22, a growth of 39.9% on a YoY basis.
Commenting on the performance Mr. U. Shekhar, Managing Director, Galaxy Surfactants Limited said,
“Coming to Q-1 FY 23, this has been a strong quarter for us. While materialization of demand side risks did impact our volumes adversely, a healthy mix and leveraging on emerging opportunities ensured the highest profitability in this quarter. As stated previously, FY 23 will be all about managing supply as well as demand side risks. While supply side factors did improve in this quarter, they are yet to revert to the Pre-pandemic levels. The inflationary scenario globally combined with the deterioration of macro factors of a few countries severely impacted the mass categories which in turn impacted our performance surfactant volumes adversely. The energy crisis in Europe and the impending slowdown remain a cause of worry and risk for our specialty care products going ahead.
While the input feedstock prices have sharply corrected in this quarter, a reversal of demand cutbacks is yet to be seen. While Q-1 FY 23 has been a good start, going ahead, a conducive environment will be helpful to ensure the momentum continues. At Galaxy, we remain committed to enabling and ensuring the same.
In FY 2016, Galaxy’s full-year Profit stood at 101 Crores. It gives me immense pleasure to share with you all that despite numerous challenges we have witnessed in the last 6 years, Galaxy’s march has consistently continued; capitalizing on the emerging opportunities thus enabling it to log in a Quarterly Profit of 100 Crores in this Quarter. While growth is never linear, structural factors enabling this continue to remain robust thus ensuring a healthy outlook for your company in the years to come.”
3 Likes
4 Likes
Galaxy Surfactants Q3 Highlights -
RM, Freight costs decline significantly aiding margins. Fatty Alcohols down almost 45 pc
Macro headwinds continue in Gulf, Turkey, Africa but a sequential volume recovery points to some recovery. Another stable Qtr will establish the trend
Pricing, Product Mix, forex gain led to EBITDA/Ton shooting beyond guided range
Demand in developed mkts still slack. Demand from India is good
Q3 numbers -
Sales - 1084 vs 931 cr, up 16 pc
EBITDA - 158 vs 78 cr, up 102 pc
PAT - 106 vs 46 cr, up 133 pc
9M FY 23 numbers -
Sales - 3474 vs 2644 cr, up 31 pc
EBITDA - 437 vs 267 cr, up 63 pc
PAT - 291 vs 164 cr, up 77 pc
Q3 volumes almost flat due de growth in Developed and ME,Africa, Turkey mkts countered by good growth in India
Product wise sales breakdown -
Performance surfactants- 683 vs 570 cr
Speciality Care products- 401 vs 361 cr
Company is a India’s largest manufacturer of Oleochemical based surfactants and speciality products for home and personal care Industry selling over 205 product types
Fully vertically integrated
07 manufacturing facilities ( 5 in India, 1 each in US, Egypt ), 01 R&D center
Preferred supplier to leading MNCs across the world and local FMCG brands
Industries served - Oral care, Hair care, Cosmetics, Skin care, Toiletries, Home care
Last 6 yrs -
Sales CAGR at 13 pc
EBITDA CAGR at 10 pc
PAT CAGR at 17 pc
Volume CAGR at 7 pc
ROCE, ROE- continiously above 20 pc ( except FY 22 where they were slightly below 20 pc mark )
Debt to Equity down to 0.2 vs 0.9, 6 yrs back
The trends in volume growth going fwd is the key considering other headwinds seem to be over
China re-opening should aid volumes in Q4
Company booked 20 cr of export benefits to Egypt in Q3. These incentives were for last 36 months. So, the bottomline got additional push
Company hoping for an overall FMCG industry level volume growths coming back in FY24 after a tough past 02 yrs
Expect some inventory correction in US in Q4. In other markets - no inventory corrections are expected
Some more impact of reduced RM prices will be seen in Q4
Guiding for aprox 150 cr / annum capex for next 2-3 yrs - combo of maint and growth capex
Currently India sales at aprox 30-33 pc of total sales. Rest are exports
Current capacity utilisation at around 67 pc
Disc: invested, biased
5 Likes
Galaxy Surfactants Q4FY23 Concall Summary
Galaxy Surfactants Q4 and FY 24 concall highlights -
FY 23 Volume wise sales data -
Performance surfactants - 153k MT vs 149k MT, growth led by India
Speciality surfactants - 77k MT vs 85k MT, de-growth led by Africa, Gulf and Turkey
FY 23 sales data -
Performance surfactants- 2896 vs 2256 cr, up 28 pc
Speciality surfactants- 1559 vs 1442 cr, up 8 pc
Total- 4455 vs 3698 cr, up 20 pc
EBITDA- 578 vs 413 cr, up 40 pc (margins at 13 vs 11 pc , pretty much back to historical levels)
PAT- 381 vs 263, up 45 pc
Significant decline in freight costs
Pricing and Product mix ensured EBITDA/MT remained healthy
Easing worldwide inflation may help in global demand revival
Company is integrated across full value chain of HPC industry
210+ product grades
07 strategically located plants
74 member R&D facility
Presence across 80 countries
India’s largest maker of Oleochemicals based surfactants and speciality care products for HPC industry
Chief application areas - Hair, Oral, Home & Skincare, Cosmetics, Toiletries
Chief customers - Unilever, Henkel, P&G, Colgate, Reckitt Benckiser, Himalaya, Emami, Dabur, Loreal, Cavincare
Revenue contributions -
MNC - 58 pc
Regional players - 12 pc
Local / Niche players - 30 pc
Biggest RM - fatty alcohol prices are down by 50 pc in last 1 yr
8-10 pc volume growth for next 3-5 yrs is possible in India
Africa, Middle East and Turkey mkt conditions were tough due currency depreciation and inflation. Now these Mkts are showing signs of stabilisation
With receding inflation worldwide demand revival is a good possibility
Aiming at 6-8 pc consolidated vol growth in FY24 with EBITDA growth higher than that
Sales breakup of performance vs speciality surfactants at roughly 66:33
Inventory destocking should be over by Q1 end in US,Europe
As growth in Speciality segment picks up, margins to improve
As inventory in US,Europe gets corrected + Inflation moderates, there should be a descent bump in speciality sales
Maint capex @ 30-50 cr/yr going fwd. Next year expansion Capex to be around 150 cr
Cash on books at around 150 cr
India demand at healthy levels
Products based on fatty alcohols are categorised as performance surfactants. Rest are speciality
Disc: hold a tracking position. Hoping for a performance pick up going fwd
6 Likes
Marcellus has exited from Galaxy from both Little Champs and Rising Giants portfolios.
Disc. Invested.