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%