Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Black Rose Industries Ltd (BOM:514183, Financial) reported an 8% increase in total revenue from operations compared to the corresponding quarter of the previous financial year.
- The company's EBITDA grew by 17% in absolute terms, reflecting substantial profitability improvements.
- The company is 100% long-term debt-free and has sufficient reserves to meet future requirements.
- The chemical distribution business outperformed the manufacturing division, contributing significantly to the revenue.
- The company has strong support and good allocation from its principals, aiding in catering to higher domestic demand and improving profitability.
Negative Points
- The export business in acrylamide liquid witnessed rollovers of orders due to logistics problems, impacting sales.
- The Morbi market for ceramic binders remained subdued due to increased gas prices and higher freight rates.
- The export business contributed only 21% of the revenue compared to 45% in the corresponding quarter, indicating a decline.
- The debtor days have increased to around 60 days, raising concerns about the sustainability of this trend.
- The rising yen could potentially impact the business, although most transactions are hedged and conducted in US dollars.
Q & A Highlights
Q: How much of acrylamide liquid is used to make 1 ton of polyacrylamide?
A: The actual percentage of acrylamide depends on the application for polyacrylamide. It ranges from about 10% to 15%, going up to 25%. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: Our debtor days have increased to 60 days. Why has this happened, and is it sustainable?
A: The debtor days target is typically 60 days, and it varies from product to product and market to market. Overall, it is more or less in line with our target. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: How much acrylonitrile is used to manufacture 1 ton of acrylamide?
A: Typically, about 80% of acrylonitrile is used on a 100% basis. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: With the rising yen, what can be the impact on our business?
A: Most of our transactions are hedged and happen in US dollar terms, so the rising yen does not have a significant direct impact on us. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: Where do we source our raw material from?
A: Our key raw material, acrylonitrile, is sourced mostly from within Asia. Recently, Reliance in India has also started production, which we are considering as a source. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: Besides our polyacrylamide solid CapEx, do we have other CapExs?
A: Yes, we have another project for which the EC application is under process, and we are also looking to acquire new land. Additionally, we are always on the lookout for new opportunities to set up manufacturing units. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: Can you expand on the specialty chemical CapEx that we are doing?
A: It's a specialty chemical plant with an expected CapEx of INR20 crores to INR30 crores. Due to secrecy agreements, we cannot divulge too many details on the product classification at this point. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
Q: Any closing remarks?
A: We are looking to expand further and accelerate our growth this year. We are focusing on strengthening our team, improving current products, adding new products, and gaining market share in distribution. - Ambarish Daga, Joint Chief Financial Officer, Whole Time Non-Independent Director, Investor Relations Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
