Vinati Organics Limited Q3 FY '24 Results Conference Call February 12, 2024
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During this quarter, NCLT sanctioned the scheme of amalgamation with Veeral Additives Private Limited. into Vinati Organics with effect from 1st April 2021
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We expect Q4 numbers to slightly improve over Q3 or be in similar lines. I had mentioned the de-stocking effect in the overall sales as well as in ATBS, which I believe now is almost over. We are seeing sales of most products, including ATBS seeing pickup. Looking at this, I expect the demand to normalize in the coming months
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The butyl phenol business has also scaled up well and delivered decent growth this year, and we expect the momentum to continue next year as well
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We make four types of butyl phenols. The mono-butyl phenols are used in the fragrance industry as well as the resin industry. The di-butyl phenols will now be used mostly captively in Veeral Additives to make the antioxidants
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The sales of IBB have also picked up starting the last quarter, and next year we are expecting to do higher numbers in IBB as compared to this financial year. Isobutylene as well as the highpurity MTBE continues to remain stable, along with our basket of customized products, the niche products, they all remain steady
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We also commissioned the ortho-sec butyl phenol as well as the di-sec butyl phenol plant in this quarter. These products find application in agrochemicals, polystyrene, and perfumery. The DSBP is used in surfactants as well as in liquid dyes
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We are the only manufacturer of OSBP and DSBP in India and expect about INR80 crores revenue at full capacity
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The antioxidant business. In this financial year, the sales from antioxidants, we make five types of AOs. The phenolic ones are the 1010, 1076, as well as 135. The phosphite one is 168. We also make 10-98. They are used in different applications in polypropylene as well as plastics, lube additives, and the nylon industry. This year, the revenue from this business will be about INR100 crores to INR120 crores, which is at 25% capacity utilization
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We are focused on optimizing our efficiency and ramping up sales in the coming months in antioxidants, and we expect this business to be a growth driver for our company as the demand normalizes. We expect to reach full capacity utilization in the next two to three years. We supply these AOs both in the domestic as well as the export market. We are also actively working on adding more antioxidants to our portfolio
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The long-term outlook remains positive. Now coming to VOPL, Veeral Organics Private Limited, which is a 100% owned subsidiary, a setup for manufacturing niche specialty chemicals. We have lined up a total capex of approximately INR 480 crores, mainly consisting of products, MEHQ, Guaiacol, 4-methoxyacetophenone, and isoamylene derivatives, as well as anisole. These products are used as polymerization inhibitors, pharmaceuticals, fragrances, and personal care. The MEHQ-Guaiacol plant is expected to be commissioned first by March 2024
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Our long-term view on ATBS remains unchanged, and the ATBS expansion is expected to be completed by December 2024. With sustainability being a core part of our value proposition, we commissioned about 15 megawatts of solar power plant during fiscal year '23. Then we added another 11 megawatts this year in FY24, and we will be adding another 7 megawatts in the fourth quarter of FY25
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We expect our revenue to have about 15% to 20% CAGR over the next three years, with growth coming mainly from antioxidants, the new products in DOPL, as well as growing demand in ATBS