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Analyst Meet / AGM - Analyst Meet

The pace of growth is difficult to predict

Savita Chemicals

16-Sep-2014, 04:56
In interaction with Mr. G.N.Mehra CMD
Key Highlights

As per the management, the company had seen all possible difficulties in past couple of years. On one hand the forex scenario was uncertain and swing was high in every quarter and on the other hand demand was very sluggish.
In such a scenario, the company grabbed as much market share as possible from the unorganized players and was able to pass through the tough times. OPM shrank to its lowest level of around 5%, which was never seen in the past.
Forex loss for FY'14 was around Rs 35-40 crore.
As per the management, it is difficult for them to predict the exact pace of growth in future, but the tide has certainly turned. An environment of stable currency and slow pickup in demand would translate in higher margins and higher bottom line growth for the company.
The fall in crude oil prices is yet another positive for the company as base oil prices to certain extent relate to crude. However it's the external environment that matters the most as per the management rather than the sudden fall in crude oil prices.
The company had invested around Rs 40 crore in wind mills and around Rs 40 crore in plant and machinery to add another line of machines. This would as per the management add about 10% of installed capacity. Investment in wind mills is against a back to back arrangement with the Grid, where the company will get cheaper and consistent power.
Overall, management is optimistic about the future, but the pace is difficult to predict. The recovery on demand side was not that much visible in Q1 and in Q2 FY'15, but as per the management, will be visible before FY'15 ends.