Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales volume increased by 8.6% compared to Q4 FY24 and by 21% compared to Q1 FY24, indicating strong demand for products.
- Revenue grew by 16.7% compared to Q4 FY24 and 28.5% compared to Q1 FY24, reflecting robust financial performance.
- Profit after tax improved by 0.5% compared to Q4 FY24 and 2.8% compared to Q1 FY24, showcasing enhanced profitability.
- The company is on track with its debottlenecking and expansion projects, which are expected to further boost production capacity.
- New product launches under the brands Styroloy and Asalac are underway, potentially expanding the product portfolio and market reach.
Negative Points
- The company faced delays in raw material shipments due to ocean freight issues, leading to spot market purchases and increased costs.
- There is no major change in global ABS spreads, which remain stable, potentially limiting margin expansion.
- The company has not provided specific guidance on EBITDA spreads for fiscal '25 and '26, creating uncertainty about future profitability.
- The impact of freight costs on finished goods prices has not yet been fully realized, which could affect future financial performance.
- The company is operating at near full capacity, indicating potential constraints in meeting further demand without additional expansion.
Q & A Highlights
Q: How were the imports of ABS in India during Q1 FY25 compared to last year and Q4 FY24?
A: Rahul Agrawal, Managing Director, stated that complete data for the quarter is not yet available, but there seems to be no major shift in imports year-on-year. The imports are stable, and the company has gained some share as volumes have increased.
Q: Have container shortages and elevated freight costs helped increase domestic market share and affected gross margins?
A: Rahul Agrawal explained that ocean freight impacts both raw materials and finished goods. There was a delay in raw materials, leading to spot market purchases, but overall, there was no major impact on EBITDA margins. The increase in volumes is due to higher production and sales.
Q: Can you provide a breakdown of sales volumes for ABS and PS across different sectors?
A: Rahul Agrawal mentioned that in ABS, the major markets are automotive and household appliances, followed by electronics, medical devices, and toys. For polystyrene, the focus is on household appliances and packaging.
Q: What is the status of the debottlenecking project and volume guidance for FY25?
A: Rahul Agrawal confirmed that debottlenecking is on track, with additional volumes expected in the second and third quarters. The company maintains its guidance of 15% to 20% growth over the previous year.
Q: Could you elaborate on the new products launched this year?
A: Rahul Agrawal highlighted the launch of styroloy and asalac, which include blends like polycarbonate ABS and ASA for high weather resistance. These products are still in the early stages of commercialization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
