GuruFocus - Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bodal Chemicals Ltd (BOM:524370) reported a 27% year-on-year growth in total revenue for the first half of FY25, driven by improved volumes across all product lines, particularly intermediates.
- The company achieved a 25% year-on-year growth in EBITDA, primarily due to better volume and realization in dye intermediates.
- Bodal Chemicals Ltd (BOM:524370) is India's largest integrated manufacturer of dyestuff intermediates, maintaining a significant market share globally.
- The company is optimistic about future performance, expecting better contributions from the benzene derivatives unit starting Q4 FY25.
- The Indian chemical industry is emerging as a preferred partner globally, with Bodal Chemicals Ltd (BOM:524370) holding a leadership position.
- The company reported a consolidated loss after tax of 1.42 crore for the first half of FY25, despite standalone profit.
- The dye intermediates division faced challenges due to political disturbances in Bangladesh, impacting the textile industry.
- The benzene derivatives unit has not yet contributed to revenue due to negligible production scale and pending certifications.
- Hyperinflation in Turkey resulted in a 1.85 crore loss for the quarter, affecting overall financial performance.
- The company is facing delays in receiving government incentives for the caustic soda business in Punjab, impacting cash flow.
A: It is difficult to predict as it depends on inflationary trends, but the figures are reducing. Last quarter, it was 2.44 crore, and this quarter it is 1.85 crore. We hope it will stabilize soon. (CFO)
Q: What is the current status of the benzene derivatives project in terms of production and revenue?
A: The production is at 622 metric tons, generating about 1.4 crore in revenue for this quarter. We expect this figure to improve in the current quarter, with significant top and bottom-line contributions thereafter. (CFO)
Q: Have you received customer approvals for the benzene derivatives products?
A: We are in the process of getting approvals from major players in the Pharma industry, expected by December. For intermediate players and Agrochemicals, most certifications are complete, and dispatches have started. We aim for 30% utilization by December and over 50% by January. (Executive Director)
Q: Can you provide insights on the company's EBITDA margins and future expectations?
A: Caustic soda and intermediates are performing well, but dye stuff faces volume challenges. We expect improvements as benzene derivatives ramp up, aiming for EBITDA margins above 11-12% once stabilized. (Executive Director)
Q: What is the status of receiving incentives from the Punjab government for the caustic soda business?
A: We have not yet started receiving incentives. The internal issues have been resolved, and we expect the process to complete within 3-4 months. We anticipate receiving funds by the first quarter of next year. (CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.