PONDY OXIDES AND CHEMICALS LTD - Q2 FY 18-19 - RESULTS REVIEW

PONDY OXIDES AND CHEMICALS LTD

Q2 FY 18-19 RESULTS REVIEW

POCL is a leading Secondary Lead Smelter in India. It produces the highest quality lead and lead alloys and PVC additives which are supplied to customers who are mainly battery manufacturers, chemical manufacturers and PVC extruded and moulded products. 

Mr. Anil Kumar Bansal, Chairman

Mr. Ashish Bansal, Managing Director

About Fifty percent (50%) of production is exported to numerous international customers in South Korea, Japan, Indonesia and to Middle – East.

POCL has been awarded the prestigious status of STAR EXPORT HOUSE along with winning multiple awards for the top exporter from the south Indian region.

Currently POCL is expanding its capacity in Lead and Lead Alloys by establishing yet another state of the art smelter.

POCL research and development wing, is always working on new products and product designs.

PRODUCTS :       

       Lead

       Lead Alloys+, CALCIUM ALLOYS, ANTIMONY ALLOYS

       Master Alloys

       Tin Alloys

       Babbit Alloys

       Zinc Oxide+– WHITE SEAL, PURE GRADE

       PVC Additives+

Sourcing raw materials :  

POCL has developed a strong network of suppliers over the years right from actual users discarding their lead based waste to yards and collectors within India and across the globe.

ANNUAL REPORT 2017-18

PERFORMANCE OVERVIEW

·     

       The total net sales increased by 24% to Rs.939.75 Cr (PY Net Sales: Rs.758.94 Cr)

·       Exports increased by 61% to Rs.442.50 Cr Rs.274.08 Cr in the previous year.

·       PBDIT increased by 9% to Rs.59.52 Crs (PY Rs.54.66 cr)

·   Profit Before Tax increased by 5% to Rs.43.97 Cr (PY Rs.41.86 cr)

·       Net profit increased by 14% to Rs.29.18 Cr. (PY Rs.25.66 Cr)

·       Final Dividend of Rs.3.00 (i.e. 30%) per equity share

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY OUTLOOK

- Global Lead Industry

International Lead and Zinc Study Group (ILZSG) reported a deficit of 1,65,000 mt of Lead in 2017. This was helped by 0.9% fall in mined production and 2.3% rise in global lead consumption. 

The share of recycled lead in total refined lead production inched higher from 58.5% in 2016 to 59.8% in 2017. Chinese regulators carried out several rounds of environmental audits of domestic Lead mines as well as smelters and recyclers in 2017-18. This contributed to intermittent disruption in production.

Going forward, Lead has a steady outlook for demand growth. ILZSG expects global demand for refined lead to rise by 2.7% in 2018. However, unlike 2017, the supply side is expected to catch up. ILZSG expects supplies to rise by 3.8% in 2018 thereby leaving a surplus of 17,000 mt in 2018.

- Indian Lead Industry

The growth in automobile industries will boost the demand for Lead in the near future, since battery industry accounts for over 80% of total demand of Lead. Further, the growth in telecommunication and power sector will increase the demand for batteries and in turn increase the demand for Lead.

OPERATIONAL REVIEW

- Lead & Lead Alloys

Due to continuous growth in automobile industries, demand for lead for the next 5 years will continue to be in momentum. POCL increased its annual production of Lead Metal and Alloys from 32,140 mt in 2015-16 to 46,636 mt in 2016-17 and 53,148 mt in the year 2017-18, showing consistent growth over the years. 

Out of 53,148 mt in the year 2017-18, 33,975 mt is produced from Sriperumbudur Unit in Tamil Nadu, having the capacity utilisation of 94%. Remaining, 19,173 mt produced in the Andhra Pradesh Unit resulted in the capacity utilisation of 80%, showing the growth in capacity utilisation by 68% in Andhra Pradesh Unit during the Financial year 2017-18 compared to the previous year. 

To meet out the additional demand for Lead Metal and Alloys in the Andhra Pradesh plant, the Company received consent for establishment from Andhra Pradesh Pollution Control Board to increase the plant’s capacity from 24,000 mt per annum to 36,000 mt per annum and likely to get consent for operations during the current financial year taking the capacity to 72,000 mt per annum. Further, your Company targets to reach a total capacity of 1,20,000 mt per annum by 2020-2021.

- Zinc and Zinc Oxides

Company completed the construction and installation of Plant and Machinery for the manufacture of Zinc and Zinc Oxides during the year 2017-18 and commenced the production in the month of August, 2017. During the year, your Company achieved the production of 666 mt against the installed capacity of 12,600 mt per annum.

Capacity utilisation has been low since the Company was under the process of obtaining vendor approval for the supply of Zinc and Zinc oxides with leading manufactures of Tyres, Ceramic Industry and Galvanizers and it is expected to complete the vendor approval process during the first half of 2018-19. After the completion of the vendor approval process, company will scale up the capacity utilisation in the current financial year.

Q2 FY 18-19 RESULTS

PONDY OXIDES	Sep '18	Jun '18	Mar '18	Dec '17	Sep '17	YOY	QOQ
Net Sales	301.82	247.5	260.3	238.07	220.06	37.15	21.95
Consumption of Raw Materials	261.55	200.85	239.51	191.19	200.54	30.42	30.22
P/L Before Tax	18.98	12.52	10.18	12.3	10.74	76.72	51.6
Tax	6.61	4.36	3.12	4.26	3.69	79.13	51.61
Net Profit	12.38	8.15	7.06	8.04	7.06	75.35	51.9
Equity Share Capital	5.58	5.58	5.58	5.58	5.58	0	0
Basic EPS	22.2	14.62	12.67	14.42	12.65	75.49	51.85
Diluted EPS	22.2	14.62	12.67	14.42	12.65	75.49	51.85
MP	333
PE	3.75
VOLUMES	9807
52 W L H	264	769
FV	10
PRICE TREND
25.10.18	1 week	2 week	1 month	3 month	6 month	9 month	1 year
Price	356.8	300	300.95	338.45	508.2	658.55	701.05
Gain / Loss	-6.45%	11.27%	10.92%	-1.37%	-34.32%	-49.31%	-52.39%

FILATEX INDIA LTD - ANNUAL REPORT 2017-18 - REVIEW

FILATEX INDIA LTD

ANNUAL REPORT

2017-18

·       Filatex india Limited manufactures synthetic filament yarns with wide range of products. 

·       The company was  promoted by Late Shri Ram Avtar Bhageria, Shri Madhu Sudhan Bhageria, Purrshottam Bhaggeria and Madhav Bhageria.

·       Filatex India has  2 production facilities in Dadra & nagar havelli (UT) and Dahej (Gujarat).

·       Polyester will be the fiber of the future. So, Filatex has focused its future growth plans on Polyester Filament Yarns.

·       Recent Mile Stones

·       2018

·       Commissioned bright Polymerization of 300 TPD for spinning 190 TPD of FDY, 25 TPD of POY and 85 TPD of Bright chips at Dahej, Gujarat.

Products (MTPA)                           Production

Polyester Chips – Semi dull       64,600

Polyester Chips – Bright-          31,000

Polyester POY -           Semi dull       123,700

Polyester POY –          Bright -         9,000

Polyester DTY -           Semi dull –    75,900

Polypropylene DTY-     Semi dull-     4,800

Polyester FDY -           Semi dull -    50,300

Polyester FDY –           Bright  -        81,200

Narrow Woven Fabrics -                  2,500

Grand total -                                   443,000

CAPTIVE :                                       114,700

NET  :                                             328,300

%AGE   :                                          100.0%

·       EXPORTING TO 34 COUNTRIES ACROSS GLOBE

·       OVER 50% OF DTY PRODUCTION IS EXPORTED

·       EXPORTS ARE >20% OF REVENUES IN FY 18

·       CAPACITY INCREASED OVER THE YEARS FROM 500 MTPA TO 328300 MTPA

·       FINANCIAL PERFORMANCE IN 2018

·       REVENUE :1928 CR up 24% YoY

·       EBITDA   : 157 CR ; Up 18% YoY

·       PBT        : 93 Cr

·       PAT : 60 Cr – up 47% YoY

·       IN 2018 – EXPORTS AMOUNTED TO 379 CR

·       achieved major certifications like ISO  9001 : 2015, ISO 14001 : 2004, BS OHSAS 18001 : 2007 and OEKO  TEX – Standard  100.

·       IN Q1 FY 19, NET SALES WERE RS.704 CR AGAINST 430 CR IN Q1 FY 18 UP64%YOY AND 22% QOQ

·       IN Q1, NET PROFIT WAS 20 CR AGAINST 14 CR IN Q1 FY 18 A GROWTH OF 41% YOY AND 15% QOQ

·       EPS IS 0.91

·       MP :47

·       52 W L IS RS.30 HIGH WAS 59

·       VOLUME 140000

·       FV RS.2

·       YB MP :39 ; +21%

Annual Report for  FY  2017-18. 

Over the years, Dadra has grown to a capacity 130 tonnes per day, producing a wide range of products like Partially oriented Yarn (PoY),draw Texturized Yarn (dTY), and coloured yarns.

The new plant located at Dahej, Gujarat, is a CP unit of 600 TPD  and POY  of 260 TPD.  

At present the capacity has increased to 328300 TPA . Company has created its footprints in uncharted path  in 34 countries for  exporting its products.

Future Prospects

Company has spotted some debottlenecking opportunities in the plant which will help it increase polymerization capacity from 900 TPD  to 1050 TPD . More polymer availability would also create an opportunity to dovetail more of value added products.  

Taking necessary steps to augment the debottlenecked capacity by this year end and it plans to add more POY  and DTY  capacity, which will be commissioned in FY20.

It has dependable suppliers, supportive bankers and reliable customers. 

Basically, Filatex now has become one  STOP shop, catering to wide range of domestic and international customers.

The  product  basket  at  Dahej  facility,  at  present,  offers  Partially  Oriented  Yarn  (POY),  Fully  Drawn  Yarn  (FDY),  Drawn  Textured  Yarn  (DTY)  &  Chips  in  Semi  Dull  range.  

·       RISKS :

·       Exposed to the risk of price fluctuation of raw and hedging activities materials as well as finished goods. The Company proactively manages

·       these risks through forward booking Inventory management and proactive vendor development practices. 

·       Company’s reputation for quality, products differentiation coupled with existence of powerful brand image with robust marketing network mitigates the impact of price risk on finished goods.

·       Company takes forward cover in respect of its major foreign currency exposure such as for imports, repayment of borrowings & interest thereon Denominated in foreign currency and export receivables

·       At global level, of 100 million tons, manmade fibers had a share of 68% and all natural fibers including cotton have the balance of 32%. There is no second thought that polyester has gradually become the common man’s fiber.

·       The operations of company’s Noida (UP) plant were closed w.e.f. 17th November, 2017 .

·       GROWTH PLAN

·       Company’s recent expansion of adding a stream of Bright polymer is completed. Commercial production of Bright POY/ FDY & Chips was started from 7th March, 2018.The facilities at Dadra plant are being utilized to produce all types of colour yarns, customized to its customer needs.

·         CHALLENGES AND THREATS

·       i) Adverse volatility in raw material prices can affect the performance.

·       ii) Uncertain availability of PTA from domestic suppliers on account of their unforeseen breakdowns can reduce capacity utilization at times.

·       iii) Low bargaining power against large suppliers of key raw materials.

·       iv) High price of PTA in domestic market on account of anti dumping duty.

 NOTE : YouTube video on Filatex will soon be available on my channel VIJAYAMOHAN STOCK MARKET STRATEGIST