AksharChem Q2 Conference Call Notes

Here’s a quick summary of the Q2 Conference Call of AksharChem

  • Raw Material cost (Vinyl Sulphone) has increased over the last quarter. However, the company has been able to pass on the cost increase to the customers because of which the margins have remained stable.
  • Also, price of final product has been hiked in quarter 3. So the company expects to increase gross margin in the coming quarters.
  • During H1 FY18, contribution of Vinyl Sulphone to revenues was 68% and CPC Green was 32%.
  • Capacity utilization during this half year was approximately 83%.
  • During Q2 FY18, the company incurred a one-off cost of 1.5 crores for repairs and pollution treatment. The company expects gross margins in H2 FY18 to be in the range of 19-20%.
  • Comp. raised 69 cr. through QIP to fund its Capex. The capex of 175 cr is in speciality chemicals, dyes and intermediates and organic pigments. Capex is expected to be completed within the next 12 months.
  • Revenue from expanded capacity of CPC green is expected to reflect from Q4 FY18. With the capex, the company expects revenue growth of 15-20% in CPC Green in FY19.
  • Company‚Äôs debt as on 17th Sep 2017 is Rs. 1 crore. Debt to Equity is almost 0.
  • Part of capex is for precipitated silica. This can give a turnover of roughly 80 cr. on a full utilization basis. This product is used in the tyre and toothpaste industry.
  • Y-on-Y growth for Vinyl Sulphone has been around 9% and for CPC green it has been flat.

Disclaimer: The above notes are true as per the best of my knowledge. Do let me know if there is any error in any of these points.

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