Meghmani Organics Ltd.
Q3FY23 Quarterly Result Announced for Meghmani Organics Ltd.
Agrochemicals firm Meghmani Organics announced Q3FY23 results:
- The company could achieve a revenue of Rs 554 crore and Rs 1,992 crore for 9MFY23
- EBITDA margins achieved 11% for Q3 and 14% for 9MFY23. The dip in performance in pigments was offset by agrochemicals.
- Agrochemicals: constitutes 75% of the overall company’s revenue. During this quarter, the company was able to maintain EBITDA margins of 19.2% (against 17.5% in Q3FY22) despite adverse global macro challenges. The company is well positioned to benefit from ‘China plus one’ strategy of global players coupled with capex plans eyeing on new molecules in agrochemicals.
- Pigments: constitute 25% of the overall company’s revenue. Currently pigment is witnessing slow export demand and contraction in prices due to challenging global macro environment. During the quarter pigment performance has been adversely impacted due to liquidation of high-cost inventory. We expect the recovery in the demand in the pigment division in the next few quarters.
- Finance Cost:
- MTM gain of Rs 73 crore on receivables has been shown as other income. MTM loss on foreign currency borrowing Rs 38 crore has been accounted as finance cost.
- Out of Rs 38 crore MTM loss, Rs 35 crore is unrealised MTM loss.
- During the Q3FY23, there is net foreign currency loss of Rs 19 crore while for 9M period there is a net foreign currency gain of Rs 35 crore.
- Borrowing cost net of foreign currency impact is Rs 5.4 crore for Q3 and Rs 11.7 crore for 9MFY23
Commenting on this quarter’s performance, Mr. Ankit Patel, CEO said “the commercial production of the agrochemicals new Multi Product Plant was commenced in Q3 FY23 and plant is getting stabilised. It will add meaningful contribution from the next financial year. During the quarter, the company has entered into long term supply contract for 5 years with reputed Multinational Customer for its Agro Products. Total value of the contract is approximately Rs. 800 Cr. Also, the company shall foray into Nano Urea (Liquid) fertilizer through our wholly owned subsidiary Meghmani Crop Nutrition Ltd (MCNL) for which the company will incur a capex of Rs 150 crores for setting up the plant in Gujarat with annual capacity of 5 crore bottles (~500 ml) per year. The plant will commence commercial production from Q4FY24. MNCL aims to achieve a topline of INR 1,000 crores on an annualized basis. One of the essential developments is that on the pigment side, the Phase 1 of the Titanium Dioxide plant with 16,500 tons capacity was commissioned on 18th January 2023. The team is working towards stabilizing the plant and the Phase 2 capex plan of doubling TiO2 capacity to 33,000 tons p.a. along with captive power plant is expected to be completed in Q3 FY24 at capex of Rs 375 crore”.