GuruFocus -
- Operating Revenue (Q2 FY25): INR294 crores, down 25% Y-o-Y from INR392 crores in Q2 FY24.
- EBITDA (Q2 FY25): INR82 crores, down 26% Y-o-Y from INR111 crores in Q2 FY24.
- EBITDA Margin (Q2 FY25): 28%.
- Profit After Tax (Q2 FY25): INR31 crores, down from INR49 crores in Q2 FY24.
- Operating Revenue (H1 FY25): INR548 crores, down from INR779 crores in H1 FY24.
- EBITDA (H1 FY25): INR142 crores, down from INR225 crores in H1 FY24.
- EBITDA Margin (H1 FY25): 25%.
- Profit After Tax (H1 FY25): INR43 crores, down from INR101 crores in H1 FY24.
- CapEx Completed (as of September 30, 2024): INR601 crores.
- Energy Cost Savings: Projected annual savings of INR15 crores from a new 9.2 MW hybrid power plant.
- Top 10 Customers Revenue Contribution (Q2 FY25): 91%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Anupam Rasayan India Ltd (BOM:543275) reported a 16% increase in operating revenue for Q2 FY25 compared to Q1 FY25.
- The company is seeing strong growth in its Pharma and Polymer segments, driven by the launch of 17 new molecules in FY24.
- Anupam Rasayan has expanded its plant capacity from 14,850 metric tons to 29,700 metric tons, which was commissioned in October 2024.
- The company has invested INR69 crores in a 9.2 megawatt hybrid power plant, expected to save approximately INR15 crores annually in energy costs.
- Anupam Rasayan anticipates significant contributions from its Pharma and Polymer segments, expecting them to constitute a quarter to a third of its revenue in the medium term.
- The company's operating revenue for Q2 FY25 was down 25% year-over-year compared to Q2 FY24.
- EBITDA for Q2 FY25 decreased by 26% year-over-year, translating to an EBITDA margin of 28%.
- Profit after tax for Q2 FY25 was INR31 crores, a 37% decline compared to INR49 crores in Q2 FY24.
- The company's working capital has increased due to the launch of new molecules and anticipated revenue growth, leading to higher inventory levels.
- Anupam Rasayan's top 10 customers contributed 91% of its revenue in Q2 FY25, indicating a high customer concentration risk.
A: The increase in inventory levels is primarily due to anticipated revenue not materializing in the first half and the launch of new molecules. As revenue picks up in the second half, inventory levels are expected to normalize. Over the next 18 to 24 months, we aim to return to historical working capital levels seen in FY21-23.
Q: How do you see the growth prospects in the fluorination chemistry market, and how does it compare to competitors?
A: The fluorination market is large and growing, with 40% of new molecules in the last 20 years containing fluorine. We are not directly competing with peers but are leveraging our existing value chain to expand into new product applications. Our recent acquisition ensures supply chain assurance, which has led to increased traction in product inquiries and conversions.
Q: What is the expected revenue contribution from Letters of Intent (LOIs) over the next few years?
A: We have approximately INR9,000 crores worth of LOIs, which translates to INR1,400 to INR1,500 crores of annual revenue. We expect commercialization to take about two years, with a ramp-up over the following two to three years, leading to INR1,200 to INR1,400 crores of annual revenue from these products in the medium term.
Q: What are the EBITDA margin and return on capital employed (ROCE) targets for the midterm?
A: We aim to maintain EBITDA margins in the range of 25% to 27%. Historically, our ROCE has been in the high teens, and we expect to return to these levels as asset utilization improves and working capital intensity decreases.
Q: How do you plan to manage the high inventory days and net debt levels?
A: We anticipate a reduction in inventory levels as revenue increases and inventory is liquidated. The expected growth in FY26 will further help in reducing inventory days. Additionally, we plan to repay over INR200 crores of debt in H1 FY26, aided by the proceeds from preferential shares, which will help manage net debt levels effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.