INDIAN ACRYLICS LTD - Q3 FY 21 - RESULTS ANALYSIS - Dt. 10 01 2021

 

INDIAN ACRYLICS LTD

Q3 FY 21 RESULTS ANALYSIS

 

Indian Acrylics Ltd is the largest and most efficient acrylic fiber manufacturer of India and an important player in the global industry with exports to Asia, Europe and the Middle East.

Its dry spun acrylic fiber quality is outstanding thanks to its unique dog bone shaped cross section.

Product optimization, reliability and environmental consciousness (green captive power generation since 2002) make Indian Acrylics a preferred supplier for acrylic fiber, tops, and tows.

MANAGEMENT

Sh. Sibin C., IAS         CHAIRMAN

Sh. R.K. Garg             MD

Sh. Dheeraj Garg        ADDL. MD

COMPANY

produces dry spun acrylic fiber since 1993. product range comprises staple, tow and tops in regular and high shrink.

production facility is located at Harkishanpura, District Sangrur, Punjab, India and has a capacity of 42000 mt p.a. and 5400 mt p.a. of tow to tops conversion.

caters to all segments of the textile industry.Product can be found in garments (especially winter wear like sweaters, shawls, etc.), work clothing, furnishing fabrics (indoor and outdoor), blankets, carpets, toys, etc.

India´s biggest and most efficient acrylic fiber manufacturer and an increasingly important global player in the industry with exports to Asia, Europe and the Middle East.

QUARTERLY RESULTS

Indian Acrylics (in Rs. Cr.)		Dec '20		Sep '20		Jun '20	Mar '20		Dec '19		YOY		QOQ
Net Sales		188		134		42	168		150		25.8		40.5
Raw Materials		96.59		47.74		48.67	130.12		95.25		1.41		102
Net Profit	10.4		-4.3		-22			3.46		0.98		962		342
Equity	135.32		135.32		135.32			135.32		135.32		0		0
Basic EPS	0.77		-0.32		-1.63			0.26		0.07		1000		341
Increase/Decrease in Stocks		10.84		44.46		-20.07	-31.73		-1.68		-745.2		-75.62
Employees Cost		17.52		12.99		7.32	16.25		15.71		11.52		34.87
Depreciation		6.34		6.3		6.34	5.22		5.98		6.02		0.63
Other Expenses		38.41		22.49		14.15	31.61		26.74		43.64		70.79
TOTAL EXP		178.85		138.92					149.18		19.89		28.74
P/L Before Other Inc., Int., Excpt. Items & Tax		18.48		0		-14.17	16.13		7.62		142.52
Other Income		0.9		1.64		0.63	2.04		0.55		63.64		-45.12
P/L Before Int., Excpt. Items & Tax		19.38		1.63		-13.54	18.17		8.17		137.21		1088.96
Interest		8.97		5.94		8.51	14.21		7.19		24.76		51.01

LETTER TO BSE RECENTLY:

After first two quarters of lower operations level due to Covid19 pandemic, Company operations has started improving and reaching near to the pre-covid levels in last two months. Sale of Fibre and yarn during this month has increased by19%approx. to Rs.64.02 crore as compared to Rs.53.90 crore in the corresponding period in the last month of December 2019 since the yarn being produced in our Spinning Mill has started getting good response in the markets. Sale of Fibre and Yarn during this quarter has increased by 25% to Rs.188.17croreas compared to Rs.149.62 crore in the corresponding period in the last quarter October-December2019. Kindly take the same on your records.

Segment Result indicates :

Fibre revenue was Rs.141.58 cr and its PBIT was Rs.21.77 cr where as its previous quarter net loss was Rs.2.97 cr and Y/B /Q loss was Rs.3.13 cr

Yarn has clocked revenue of Rs.104.06 cr and a Net loss of Rs.1.95 cr against Net profit of Rs.5.26 Cr in previous quarter and Net profit of Rs.12.14 cr in Y/B/Q.

Inter-segment revenue was Rs.57.46 Cr

There is good increase in sales in Q3 of this year for both Fibre and Yarn. While Fibre has given a profit of Rs.21.77 cr Yarn has given a net loss of Rs.1.95 cr. Yarn had net profit earlier and Fibre had net loss earlier. That has reversed in latest quarter.

Finance cost has increased considerably in Q3. Company has employed capital of  Rs.113.11 cr in Fibre and  Rs.13.224 cr only in Yarn.

Price Performance

1 Week         1.98%   

1 Month         43.27% 

3 Months       37.68% 

1 Year           26.41% 

3 Years         -42.42%

January 08, 2021 / 10:35 AM IST

Reported Standalone quarterly numbers for Indian Acrylics are:

Net Sales at Rs 188.17 crore in December 2020 up 25.77% from Rs. 149.62 crore in December 2019.

Quarterly Net Profit at Rs. 10.42 crore in December 2020 up 947.12% from Rs. 0.99 crore in December 2019.

EBITDA stands at Rs. 25.72 crore in December 2020 up 81.64% from Rs. 14.16 crore in December 2019.

Indian Acrylics EPS has increased to Rs. 0.77 in December 2020 from Rs. 0.07 in December 2019.

Mid-range performer: Stock with medium financial performance with average price momentum and valuation.

3 year CAGR growth

Revenue	16.0%
Net Profit	-22.8%
Operating Profit	12.5%

 

Shareholding Pattern

• Promoters pledge remained unchanged at 24.89% of holdings in Sep 2020 qtr.
• Promoters holding remains unchanged at 62.56% in Sep 2020 qtr
• Mutual Funds holding remains unchanged at 0.07% in Sep 2020 qtr
• Number of MF schemes remains unchanged at 4 in Sep 2020 qtr
• Institutional Investors holding remains unchanged at 0.07% in Sep 2020 qtr

 

MANAGEMENT DISCUSSION & ANALYSIS-AR 2019-20

a)  Acrylic Fiber Industry – Global and Indian Perspective:    During the year under review, the Industry witnessed stable demand of Acrylic Fibre (AF). The raw materials as well as energy prices kept increasing during the first half of the current year. The prices of raw material fell in the second half of the current year.   As far as production of Acrylic Fibre in India is concerned, the domestic production of Acrylic Fibre has increased marginally by 2% during the current financial year. The total production of Acrylic Fibre in India during 2019-20 is estimated to be 0.099 Million MT compared to 0.097 Million MT in the year before that.   Export of Acrylic Fibre from India in quantitative terms have gone down from 0.025 Million MT to 0.022 Million MT.  

Domestic Industry continue to face problems due to Acrylic Tow and tops  exported as sub standard product or Synthetic Waste (Acrylic Soft Waste) by certain producers from Peru, Thailand, Belarusian and dumped in India at much lower prices.

The Forum of Acrylic Fibre (FAFM) has taken up with the Govt. to take stringent measures to curb this practice as well as for levy of anti dumping duty on dumped Acrylic Fibre imports.  

Acrylonitrile (ACN), a crude oil derivative, is the principal raw material for manufacture of Acrylic Fiber. Normally, it is influenced by crude oil prices, though the same is also impacted by it’s demand-supply balance as well as demand for propylene (an input for ACN) from competing end uses and it’s availability. While supply of Acrylonitrile was tight due to unplanned shutdowns in the first half of the year with very high prices. This has improved in the second half of the year and thereafter prices of ACN drop considerably   Production  remained  under  complete  shutdown  during  24.03.2020  to  27.04.2020  due  to  lockdown  imposed  by Government on account of Covid-19.

It has affected market sentiments of customers across entire value chain due to which export textile sales have taken severe dip during last quarter of the Financial Year.  

There is no other major change in the world capacities of Acrylic Fibre during the year.

b)  Business Outlook:   The market for acrylic fiber is expected to register a CAGR of around 1% during the time period of 2020-2025. The major factor driving the growth of the market studied include the high demand from the use of apparel.   

On the flipside, availability of substitutes like polyester, stringent regulations worldwide on the production of acrylic fiber, and the negative impact of Covid-19 on the overall market are expected to hinder the growth of the market   

Asia-Pacific dominated the global acrylic fiber market, due to high demand from the ASEAN countries and India.   India will continue to be the fastest growing major economy in the world. It’s growth outlook is still robust. In comparison to other emerging markets Indian economy position is quite impressive as it has managed to deliver growth slightly above its potential despite temporary setbacks.    It is predicted that feed stocks as well as Acrylonitrile Prices will continue to remain soft in the first half of F.Y. 2020-21 due to Covid-19 and pickup gradually after that.

It is predicted that Acrylic Fibre and Yarn demand will grow at faster rate in Indian Market post Covid-19 in the second half of this financial year.  

In  order  to  grow  the  business  and  to  strengthen  the  top  and  bottom  lines,  your  Company  is  creating  more  yarn manufacturing capacity.

The work on installation of 10000 more spindles worsted mill project is completed. Out of the above 6500 spindles along with all other facilities required for production of dyed acrylic yarn has come into commercial production on 01.06.2019 and remaining 3500 spindles had come into commercial production on 15.03.2020. These facilities would further help in increasing the demand of acrylic fibre as well as in making more diversified and broad based customer base in both domestic and export markets.

Shareholding Pattern as on 31st March 2020   Sr. No.     Particulars No. of Shares % age1. Promoters, Directors & Associates 84662319 62.562. Bodies Corporate 5365604 3.973. FI’s & Mutual Funds 92900 0.074. NRI’s 705771 0.525. General Public 44495568 32.88Total        135322162   100.00

 

Yearly Results of Indian Acrylics (in Rs. Cr.)	Mar '20	Mar '19	Mar '18	Mar '17	Mar '16
Net Sales	745.07	731.17	522.66	476.13	540.2
Consumption of Raw Materials	528.28	500	372.54	314.14	355.97
Interest	38.04	28.48	20.06	15.61	17.59
Net Profit	10.72	11.38	8.88	21.97	20.62
Equity	135.32	135.32	135.32	135.32	135.32
Reserves	6.4	-3.68	-15.06	-37.34	-59.74
Basic EPS	0.79	0.84	0.66	1.62	1.52