Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- India Glycols Ltd (BOM:500201, Financial) reported a strong quarter with a 15% increase in gross revenue and a 24% increase in net revenue compared to the same quarter last year.
- The company's biofuels segment showed significant growth, with net revenue increasing by 194% in the first half of the year.
- The portable spirits business experienced a 21% increase in revenue, driven by strong performance in branded country liquor and new product introductions.
- The joint venture, in which India Glycols Ltd holds a 49% share, delivered its best-ever quarter with a 24% increase in sales.
- The company is focusing on new value-added chemicals, with a strong pipeline and partnerships with global companies, indicating potential for future growth.
Negative Points
- There was a slight dip in EBITDA margin from 13.5% to 12.4% compared to the same quarter last year.
- The chemical segment showed only modest growth, with challenges from lower-cost imports affecting market share.
- The ENA (Extra Neutral Alcohol) sales have dipped due to a conscious decision to utilize it internally, impacting external sales figures.
- The biofuel segment's margins have been affected by higher grain costs, leading to concerns about future profitability.
- The nicotine business faces continuous pressure on prices, affecting margins despite holding a significant market share in exports.
Q & A Highlights
Q: Can you provide an outlook on the long-term debt taken during the quarter and its repayment schedule for 2025 and 2026?
A: The repayment period for the debt is 7 to 8 years, with an average maturity of around 4 to 4.5 years. (CFO)
Q: What is the current status and future outlook for your specialty chemicals segment?
A: We expect a modest turnover of over 100 crores in this financial year. Significant growth is anticipated, contingent on project approvals and trials. The opportunity size is potentially several multiples of current numbers. (CEO)
Q: Could you elaborate on the strategy behind forming a wholly-owned subsidiary for the spirits business?
A: The strategy is to focus on maximizing value creation and potentially inviting strategic investors. This involves running businesses with specific focus and having a clear P&L. (CEO)
Q: What are the reasons behind the flat to lower profitability in the BioPharma segment, and what is the outlook for H2?
A: The margins are under pressure due to nicotine price fluctuations. We are focusing on cost-cutting and higher value-added derivatives to improve margins. (Head of BioPharma)
Q: How do you see the peak EBITDA margins evolving in the medium term, considering your investments and R&D in enhanced chemicals?
A: We are focusing on value creation through differentiation, strategic cost reduction, and moving up the value chain. This includes energy projects and green energy initiatives to improve margins. (CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
