TANFAC INDUSTRIES LTD ANNUAL REPORT 2017-18 - Q2 FY 19 RESULTS - Q2 RESULTS REVIEW

TANFAC INDUSTRIES LTD

ANNUAL REPORT AND 

Q2 FY 19 RESULTS

Q2 RESULTS REVIEW

TANFAC IND	Sep '18	Jun '18	Mar '18	Dec '17	Sep '17	YOY	QOQ
Net Sales	54.92	55.77	47.75	38.67	40.27	36.38	-1.52
P/L Before Tax	11.7	13.08	2.32	2.92	2.19	434.25	-10.55
Net Profit	11.7	13.08	2.3	2.82	2.19	434.25	-10.55
Equity Share Capital	9.98	9.98	9.98	9.98	9.98	0	0
Diluted EPS	11.73	13.12	1.92	2.87	2.24	423.66	-10.59
MP	313
PE	6.6709
VOL-BSE	60878
52 W L H	96	403
FV	10
121118	1 week	2 week	1 month	3 month	6 month	9 month	1 year
Price	283.05	299	269.6	197.3	113.4	117.35	110.45
Gain / Loss	10.40%	4.52%	15.91%	58.39%	175.57%	166.30%	182.93%

5 YEARS CAGR UP 9%  FY 14- FY 18

REVENUE    : 116.3 TO 165.4 Crs

WBITDA      : 10 TO 20.7  Crs 20% UP

NET PROFIT  : -3 Crs TO 9.7 Crs 194% UP

D : E     : 1.9; 63% DOWN

DIRECTORS : A.K.AGARWALA; V.T.MOORTHY

CEO : K.SENDHIL NATHAN

OVERVIEW

The Company’s sales performance had increased by 19% due to increase in sales volume and also increase in prices of main products viz., HF, Sulphuric Acid & Aluminum Fluoride. 

Some of the initiatives taken by the company during the last three years were:

• Focus & Penetration on PV grade DHF and Specialty Fluorides.

• Increase in export volume of HF to existing and new markets.

• Negotiation with key Raw Material suppliers for reduction in prices compared to international price.

• Tight control on Working Capital to reduce overall debt.

• Reduction in Finance Cost.

• Manpower optimization

• Expending geography base for sourcing Flours par

Company continues to face stiff competition from China which affects the sales realization and margin in HF from both domestic and overseas markets. However, these were offset by the steps taken by the company as explained above.

Though the prices of main raw materials – Fluorspar & Sulphur had increased steeply , the Company managed to significantly improve the profitability through optimization of product mix and judicious choice of customers, new market penetration and continuous improvements in reducing the fuel and energy consumption.

Export turnover was marginally higher at Rs.18.85 crores, against Rs.18.45 crores in the previous year .

NET PROFIT

Net profit for the year was significantly higher at Rs. 9.70 crores against Rs. 3.29 crores during the previous year.

RESERVES

With the help of strong performances during the year, the Company had wiped out its entire brought forward losses of previous years and ended with a positive reserves of Rs. 2.66 crores, clearly indicating the turnaround of the company.

OPERATIONAL RISK:

(a) Company’s most significant exposure relates to the US Dollar, since the prices of key raw materials - Fluorspar and Sulphur are impacted by the movement of US Dollar.

Fluorspar is imported. High dependence on China for Fluorspar which is promoting export of more value-added products puts pressure on the availability and margins Mitigation: The Company has expanded vendor base of Chinese origin. The company has also developed sources from other geographies and expanded relationship to reduce dependency on Chinese origin. The company is continuously exploring other options.

(b) Volatility in HF Demand for conventional application and downward trend in end users segment.

Mitigation: Focus on PV & specialty grade HF and specialty Fluorides. Retain existing customers through competitive pricing.

Expand market of HF in Asia Pacific markets and increase export volumes. Coordinate with domestic players for healthy competition.

EXPORTS:

We are optimistic about the outlook for exports in coming years.

Company expects further reduction in the Finance Cost during next financial year.

aims to further increase the market penetration of these products during the next financial year.

HYDROFLUORIC ACID & SPECIALTY FLUORIDES:

Your company continues to widen the Customer base and has also made significant progress in stringent specialty applications with 28% growth in volume during FY’18. The markets remain oversupplied and your company will identify value added downstream products. This will also reduce our over dependence on traditional markets

SULPHURIC ACID:

had robust performance in Sulphuric Acid. sales and contributions were much higher than budget. Production efficiencies have improved and are well poised to perform better in coming years