Balaji Amines Ltd

Q2FY23 Quarterly Result Announced for Balaji Amines Ltd.

Specialty chemicals company Balaji Amines announced Q2FY23 results:

• Revenue from Operations for Q2FY23 stood at Rs 630.41 crore, up by 18.95%, compared to Rs 529.99 crore in Q2FY22. Total volumes stood at 28,498 MT in Q2FY23, against 28,360 MT in Q2FY22.
• EBITDA for Q2FY23 was Rs 175.96 crore, up by 31.06%, compared to Rs 134.26 crore in Q2FY22. EBITDA margin for Q2FY23 stood at 27.91%, against 25.33% in Q2FY22. The improvement in operating margins was primarily on account of better product mix.
• PAT for Q2FY23 was Rs 118.64 crore, up by 34.71%, compared to Rs 88.07 crore in Q2FY22.
• Diluted EPS for Q2FY23 stood at Rs 28.57 per equity share, against Rs 24.61 in Q2FY22.

On the performance, Mr. D Ram Reddy, Managing Director, commented, "Despite headwinds in pharma and API industries globally, we have delivered decent quarterly results. The improvement in the margins was primarily on the account of better product mix. Additionally, some of the older plants along with newly started plants had improved capacity utilisation, which resulted in better operating leverage. Revenues from the new plants will start contributing to our top line in the coming quarters, which in turn can improve the margin profile of the company.

As announced earlier, phase 1 of the 90-acre Greenfield Project (Unit IV) has been completed and the DMC/PC and PG Plant started commercial production by the end of September 2022. This is with installed annual production capacity of 15,000 tons of Dimethyl Carbonate (DMC)/Propylene Carbonate (PC) and 15,000 tons Propylene Glycol (PG). We believe this will also provide a strategic advantage of being the sole manufacturer of Dimethyl Carbonate (DMC) and Propylene Carbonate (PC) in India. Currently the annual domestic demand of Di-methyl Carbonate (DMC) is about 8,000 to 9,000 tons with main usage in Pharma and others, Propylene Glycol (PG) is about 170,000 to 180,000 tons & Propylene Carbonate (PC) is about 3,000 to 4,000 tons, which are completely met by imports. DMC is used in pharma and also in the production of Polycarbonate and Lithium Batteries – the consumption of which will exponentially grow in India, backed by various government initiatives. In the first year of operations, the company is confident of achieving capacity utilization of 60-70% at the DMC/PC and PG plant.

In addition to commencement of the installed capacity mentioned above, the company has also started construction for Methyl Amine.

Environmental Clearance for the same has been received well in advance. The company expects to start operations at these state-of-the-art manufacturing facilities around the closure of this financial year

Coming to our capex plans for the future growth journey, we would start initiating capex for installation of the below plants in FY23 and FY24 subject to the Government approvals / permissions / environment clearance:

1) Methylamine plant with a capacity of 40,000 tons
2) N-Butylamines plant with a capacity of 15,000 tons per annum
3) DMAHCL plant with a capacity of 12,000 tons
4) Acetonitrile plant with a capacity of 15,000 tons and
5) DMF plant with a capacity of 30,000 tons

The total capex over FY23 and FY24 will be about Rs 300-350 crore. The production at above plants will commence between mid FY24 till end of FY25 subject to the Government approvals / permissions / environment clearance. 

For our new Acetonitrile plant, we plan to undertake production through a new upgraded technology, where we envisage to have cost advantage, which will enable us to withstand higher prices of acetic acid and shall lead to healthy operating margins. Over medium to long-term we foresee a substantial demand for this product as ‘China Plus One’ strategy takes centre stage and the PLI incentives provided by the Government of India gives further impetus leading to substantial capex by pharmaceutical and agrochemical companies.

Upon smoother accessibility of raw materials for matching products at our clients’ end in coming quarters, we expect to witness an increase in capacity utilization for our legacy products in FY23. We expect substantial improvement in volume offtake in FY23 from improved capacity utilization at our various plants.”

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