Anupam Rasayan India Ltd Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Hello, Can you hear me?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Thank you very much for the call. So if you look at your current business mix and the expectation of a -- the reversal of the deferral of orders, how much do you think would the reversal of the deferral of the orders, which are received first quarter will add to the second half numbers? And then on that, what is the additional revenue we can expect from the commercial operation of the new capacity and the booking of new orders. So there are three parts. One is how much is the incremental addition to the revenue in the second half, which you lost in the first quarter? Secondly is, what is the kind (technical difficulty) And third, what is the additional revenue from the new LOIs and Contract?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Yes, hold on. Let me use the handset. Hello, can you hear me now?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : So I have three parts to my question. One is in terms of the potential for addition to the second half revenue, how much would that addition be in rupees crores based on whatever revenue you have lost in the first quarter, because of order deferral? Second is what is the addition you can expect from the commissioning of the new capacity? And third is, how much is additional revenue you expect to book from the new LOIs and Contracts, which you will start delivering in the second half?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : So if you're looking at a ballpark INR1,000 crores to INR1,100 crores revenue for the year, you're saying that you will get about INR250 crores from the new LOIs and Contracts in the second half, we are understanding correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 11:30AM, ANUY.NS - Q1 2025 Anupam Rasayan India Ltd Earnings Call

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : So over FY26 and FY27, again on this base revenue, you have to performance the existing LOIs contracts and existing business. And then we have the new LOIs and Contracts. So what will be the addition to the FY26, FY27 revenue from the new contracts? And what will be the growth from the existing business?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Yeah, exactly.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Yeah. Now you are clear, yeah.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Okay. Sir, and this is something which you are confident about even with the kind of headwinds you're facing in agrochemicals, so this is something that you can do, right? Irrespective of that.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Okay. So if I just squeeze in one more thought on the balance sheet and your working capital. So incrementally, when you ramp up your production, are you going to maintain your debt at current levels, assuming that the working capital will go up for the additional revenue? And secondly, when do you see the reduction in the working capital in terms of number of days over the next two years?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Thank you, Vishal Bhai, I'll join the queue. Thank you.

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Thanks for the opportunity. Sir, first question is by FY27, again, slightly on a longer horizon, what could be the mix between agro and non-agro. And again, in terms of non-agro, what will be the mix between, say, pharma, polymers or any other new-age segments. Thank you.

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Absolutely, fair.

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Fair enough. That gives broader sense.

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : No, Broader sense that's fair enough.

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Right. Got it. Sir, second question. Now given that we are ending with the INR670 crores of CapEx this year, are we recalibrating the next year's CapEx given the kind of environment we are currently in. And I mean every single company is talking about, there has been new capacity additions happening in China, which is putting pressure in terms of incremental growth or volume. So just your thoughts on the same? And is there any competition coming particularly in some of our molecules or some of our user segments. And that can also lead to maybe the CapEx being recalibrated. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 11:30AM, ANUY.NS - Q1 2025 Anupam Rasayan India Ltd Earnings Call

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Yes. And anything on the China competition front?

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Right. And one just last clarification. Again, I'm not going to call you for the exact numbers. But on the broader margins front incrementally, do we still hold to the range of maybe 25% to 27%, 28% EBITDA margins for the next leg of products?

Question: Rohit Nagraj - Centrum Broking Ltd - Analyst : Sure. That's all from my side. Thank you, and all the best.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Thank you for a follow-up. So if you look at your fluorination chemistry, I know it overlaps one or two segments. So within the segment share you have discussed between agro and non-agro, where would the fluorination share of the overall revenue stand? And how does it move in the next two years? And broadly, I think it is possibly split between the Life Sciences and nonlife in the order book. So -- and incrementally, if you're looking at your margin guidance, margin guidance kind of does it capture the share of fluorine chemistry and the different segments you're doing like pharma and polymers. And with the understanding that there could be plus or minus 100 basis points to 200 basis points difference in the margin. So if you can just put this in perspective, it will be useful.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Hello? I'm not able to hear you.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Understood. So now in terms of the supply chain with Tanfac, again two parts to this. One is how much of HF have you firmed up with Tanfac in terms of their CapEx plan to double their capacity? And does that give you enough visibility on the requirement for ramping up your business on the new orders over the next 5 years? Or will Tanfac have to invest further in terms of additional capacity? What is that -- and for Tanfac itself, what does it mean, because we don't have much visibility on Tanfac? --

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : I'm sorry, it is breaking.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Okay. So in terms of your fluorine based products based on this HF. Overall, how does it change your margin ROC profile? Because if you're saying that the margins are going to be in this range or some products are actually going to be lower margin. So in terms of ROCE, how do we read that in terms of the asset turn, like if you take the INR60 crore, INR70 crore CapEx, what is the asset turn you can expect on this new CapEx is commissioned? And is that going to be the increased lever for driving your ROCE improvement? How do you see that?

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Yeah, understood. So just have one last clarification. So this INR1,100 crores to INR1,200 crores and this [1.5 times] of asset turn, by when would you be able to achieve this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 11:30AM, ANUY.NS - Q1 2025 Anupam Rasayan India Ltd Earnings Call

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : Yeah. Gopal Bhai, he was saying that he cannot put a time line, but probably, this is the guidance you are giving in terms of incremental revenue from the new CapEx on the asset turn. So just to get in terms of whether it will be possible by '27 or '28, because if you look at the run rate of INR200 crores, INR250 crores every year, it looks like it will take three to four years. So would it be realistic to expect this additional revenue from the new LOIs and the new CapEx by '27 or would it be more like '28? So that will give us a sense in terms of by when you can achieve that blended asset turn and improvement in ROCE, that was the basic spirit behind my question.

Question: S. Ramesh - Nirmal Bang Equities Securities Pvt Ltd - Analyst : That's helpful. Thanks a lot, and wish you all the best.

Question: Ayush Chaturvedi - Axis Capital Ltd - Analyst : Am I audiable? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 11:30AM, ANUY.NS - Q1 2025 Anupam Rasayan India Ltd Earnings Call

Question: Ayush Chaturvedi - Axis Capital Ltd - Analyst : Yeah. Thanks for the opportunity. Firstly, if you could provide a breakup of exports in domestic business in this quarter. That will be very helpful. And also, I would like to understand other than the deferment in the agri business that we've had, what is the impact or any sort of sense we can get from how much of deferment can we expect in the rest of the year on other businesses?

Question: Ayush Chaturvedi - Axis Capital Ltd - Analyst : Yeah. So again, like I said, I would like to understand how much of this is deferment coming from the agri portfolio? And the --

Question: Ayush Chaturvedi - Axis Capital Ltd - Analyst : All right. So could we expect a very strong resurgence in the agri, in the latter half of the year like you've been mentioning. So what sort of -- so you would have some sense of how much of it would start coming back?

Question: Ayush Chaturvedi - Axis Capital Ltd - Analyst : Alright. Okay. That's very helpful. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 11:30AM, ANUY.NS - Q1 2025 Anupam Rasayan India Ltd Earnings Call