Analyst Meet / AGM - Analyst Meet
Improvement from Dahej and stabilization post GST should help in better realisation
The company held its analyst meet on 18th Sep 17 and was addressed by Mr. Pradeep Chandan, Director Legal and Company Secretary.
Key Highlights
June 17 quarter was affected due to inventory issues on implementation of GST. Post GST implementation the company has not faced any loss in sales or margins. However management believes margin expansion will happen with higher sales and better product mix in times to come.
The company has introduced new products in June 17 quarter for paint industry. Further diversified in products in chemical care space. Other new products launched in FY 17 include Adexar, Seltima and Basagran.
The company incurred capex of around Rs 32 crore in June 17 quarter towards setting up construction chemical plant in Kharagpur.
There will be some impact of loss of soyabean crop in MP and some parts of Maharashtra due to excessive rains in agri segment.
The company imports around 75% of its total raw material requirements from the Parent. Strengthening Rupee is overall positive for the company.
The concern was on the Dahej plant which despite reaching sales of around Rs 1000 crore and 55-60% of utilisation, is not running on the expected line of margins of around 15%. FY 18 should see better realisation which should help margins in this segment.
Company despite being a leader in many products has lower margins.
It is paying around 8% as royalty to Parents on sales.
Overall, low base impact of FY 17, good sales due to monsoon, stabilisation post GST and improvement in Dahej can drive realisation in FY 18.
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