BHAGERIA INDUSTRIES - Q2 FY 19 RESULTS -INVESTOR PRESENTATION OCT 2018

BHAGERIA INDUSTRIES

Q2 FY 19 RESULTS &

INVESTOR PRESENTATION OCT 2018

MANAGEMENT :

1.         SURESH BHAGERIA, CHAIRMAN

2.         VINOD BHAGERIA MD

3.         VIKAS BHAGERIA JT MD

4.         CHANDRAPRABHA BHAGERIA EXEC. DR

GOT CHEMEXIL FIRST AWARD FOR SMALL SCALE SECTOR 2015-16

PRODUCTS :-

Dye Intermediates :- H-Acid; Vinyl Sulphone; Gamma Acid

Q2 FY 19 RESULTS

Rs.Cr            Q2FY19  Q2FY18 % Ch

Net Sales      121.6     89.8       35.4%

Total Expenses 79.4    66.9       18.6%

EBITDA         42.2       22.9       84.8%

EBITDA margin 34.7% 25.5% --

PBT               40.6       16.5       146.9%

PAT               28.2       10.7       164.9%

PAT Margin    23.2%    11.9%    --

EPS :5 QTRS : 12.91   8.17       4.87       9.18       5.77

MP :314

P/E : 6.08

VOLUME : 69000

52 W L H : 211 : 365

FV : RS.5

LAST YEAR THIS TIME MP : 303

-      - -  -  -  -  -  -  -  -  -  -

Q1 RESULTS HIGH LIGHTS

NET SALES :+40%YOY

                     +9% QOQ

NET PROFITS : +332% YOY

                           +68% QOQ

ANNUAL HIGH LIGHTS

Rs.Cr            FY 16     FY 17     FY 18

NET SALES    239        374        373

EBITDA         26.5       62.4       79.8

PAT               15.4       43.54     40.3

EXPORTS : 

Exports Contributing to 44% of Revenues

·       Europe 2%

·       US 2%

·       Asia Pacific 96%

·       Exports 44%

·       Domestic 56%

For H1FY19

·       Increasing geographical diversification

·       Adding newer geographies: started exporting to the US market

·       New client additions : added KISKO Group and Kimsoy Boya

·       Net Long Term Debt Free

·       Repaid over Rs 103 crore debt since Mar’17

·       Total Revenue from solar business (Q2FY19)

·       Rs 6cr PLF (30MW) – 24*

·       Solar project fully commissioned in Maharashtra

 25 year PPA with Solar Energy Corporation of India

(SECI)

 Capacity-30MW

Tariff–Rs4.41/unit

Total project capex–Rs.180 cr

Existing project

 Solar rooftop solution -25 year PPA with  Asahi India Glass Ltd, TRIL Ltd, Lucas Ltd & Kajaria Ceramics Ltd.

 Capacity –4 MW

Tariff –Rs 6.61/unit

PLANTS :

2 Manufacturing plants

10+ Ship-to-countries

373 Revenue in Rs Cr (FY18)

21% EBITDA Margin(FY18)

500+Employees

33% Return on Capital Employed  (FY18 chemical biz)

EPS Rs 18.5 per share(FY18) (FV Rs.5)

Dividend Rs 5.5 per share (110 % for FY18)

Manufacturing Facilities

Vapi, Gujarat

-Vinyl Sulphone

Boisar, Maharshtra

-H-Acid/Gamma Acid

O VAPI : Located in chemical belt of Gujarat

O Best pollution control facilities

O BOISAR : Spread over 25 acres; land available for expansion

O Captive solar power plant

All facilities are moving towards zero discharge  by end of this fiscal

Market share of total global capacity

·       GAMMA ACID : 30%

·       H-ACID 13%

·       VINYL SULPHONE – 5%

Amongst the leading 3 manufacturers of H-Acid and Gamma Acid

Total Capacity of Dye Intermediates  ~9,500 TPA

HOW ? MARGIN LEADERSHIP IN THE INDUSTRY:-

·       Cost optimization through various initiatives

·       95%+ Capacity utilization

·       CONSISTENTLY STRONG EBITDA MARGINS

• HOW ? Sourcing of raw materials

 Bulk purchases which saves cost

 Proximity to sources of raw material

• Strategically located close to major ports, saves

on logistics cost

• Optimum and efficient use of by-products and

effluent generated in the manufacturing process

·       H1 EBITDA MARGIN IS 32.7 ( FY 18 : 20.7)

·       No. of long term partnerships –domestic and global both

• Backward Integration into manufacturing of Sulphuric Acid at Tarapur, Boisar.

 Consent received from Maharashtra Pollution Control Board (MPCB)

 Sulphuric acid & derivatives (Capacity of 150 TPD)

 25% oleum (Capacity of 10 TPD)

 65% oleum (Capacity of 30 TPD)

 Chloro Sulphuric Acid (Capacity of 30 TPD)

 Brownfield capex of Rs.100 crs to be financed by internal accruals in next 3 years

• 3.4 acres of land acquired at GIDC, Vapi, Gujarat

 MOU signed for proposed expansion in the chemical business (other chemicals)

 NOTE : Readers can listen to the YouTube Video on this in my channel VIJAYAMOHAN STOCK MARKET STRATEGIST

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BHAGERIA INDUSTRIES - Q1 FY 19 RESULTS

BHAGERIA INDUSTRIES

Q1 FY 19 RESULTS

BHAGERIA INDUSTRIES LIMITED was established in 1989 for manufacturing serve dyes & intermediates at Vapi (Gujarat) . It is now a Manufacturer  &  Exporter  of  Dye  Intermediates  (Vinyl Sulphone,  H-Acid  &  Gamma  Acid), 

Bhageria has made significant strides in the field of Dye Intermediates and other related products since it's inception. Nearly 70% of its production is being exported to Korea, Japan, Taiwan, China, Germany, U.S.A & other European and African countries. 

Today Bhageria Industries Limited is one of the largest Manufacturer & Exporter of Intermediates and Dyes.

The business activities of the group can be classified as follows:

Manufacturing and exporting of Dyes and intermediates.

Sourcing and exporting various pharmaceutical products (APIs and FFs).

It is now in the process of  amalgamating  Nupur Industries with itself which is expected to strengthen its position. NCLT has recently approved the amalgamation.

Bhageria has done very well in the Q1 FY 19.

Net sales at 113 Cr is 40% higher YoY and 9% higher QoQ.

Total Revenue at 115 cr is higher by 7% QoQ and 26% YoY- owing to better realisation in the chemical business and fully commissioning the solar power plant. 

Revenue  from  chemical  business  in  Q1FY19  is  Rs  105  cr  compared  to  Rs  87  in Q1FY18, up 21% YoY 

Revenue  from  Solar  business  in  Q1FY19  is  Rs.  9  cr  (fully  commissioned)  compared  to Rs 2 cr (partly commissioned) in Q1FY18, up by 316% 

EBITDA at Rs.32 cr is higher by 44% QoQ and 120% YoY.

EBITDA Margin has increased to 27.6% in Q1 from 20.5% in previous Q4 qtr and 15.8% in last Q1 FY 18.

Net profits at 17.85 cr is  262 % higher  YoY and  68% higher QoQ.

PAT Margin stands at 15.6% in Q1 against 9.9% in previous quarter and 5.4% in Q1 of last year.

Cash Profit of Rs. 23.15 cr in Q1FY19 (up 86.4% YoY)

Diluted EPS at Rs.8.17 is higher by 263.4%  YoY and 68% QoQ on  a FV of Rs.5. But, the EPS growth is not consistent over the 5 quarters (8.17; 4.87;  9.18; 5.77; 2.59)

Equity share capital stands at Rs.10.91 cr (7.94 cr in previous quarter)

The price earnings ratio is 9.7 on this EPS which leaves scope for price appreciation.

But volume of transactions is sometimes a bit low on NSE.

The price trend indicates that the present price of Rs.317 is approximately same that one year before.

Total number of shareholders have increased to 10,426 as compared to 4,289 in 2014-15. 

During the quarter, Company has allotted 59,42,530 Equity Shares of Rs.5 each to Shareholders of  Nipur  Chemicals  Limited  on  May  19,2018  in  pursuance  to  the  Scheme  of  Amalgamation. 

Hence,  the  paid-up  capital  of  the  company  has  been increased  to  Rs.1091.10  Lakhs  and subsequently,  promoter  shareholding  has  been  increased  to  68.1%  and  as  on  date  promoter shareholding is 70.5%

Now, future Chinese competition is a factor for growth of this Industry in India. The company says, and generally Industry feels, that Chinese costs have also significantly increased and therefore on cost basis, Chinese Companies cannot compete with India now.

ANNUAL RESULTS

When we examine the annual results, we find that the total operating revenue in 2014 was 367 cr and the revenue in 2017-18 also is 367 cr and there has not been any significant growth in it. The company needs to tell us why there is no growth at all in revenue in a 5 year period. The amalgamation of Nupur Industries, a group company, may enhance the production, sales etc but is there any Greenfield expansion also is not clear. But the total expenses are down from 347 cr to 316 cr during this period. This has increased the profit from 15 Cr to 40 cr. Equity dividend has grown from 35% to 110%

BHAGERIA INDUSTRIES	Jun '18	Mar '18	Dec '17	Sep '17	Jun '17	YOY	QOQ
Net Sales/Income from operations	113.29	104.31	89.6	88.77	81.09	39.71	8.61
Net Profit/(Loss) For the Period	17.85	10.64	14.62	9.21	4.13	332.2	67.76
Equity Share Capital	10.91	7.94	7.96	7.96	7.96	37.06	37.41
Basic EPS	8.17	4.87	9.18	5.77	2.59	215.44	67.76
Diluted EPS	8.17	4.87	9.18	5.77	2.59	215.44	67.76
MP	317
PE	9.7
VOLUME	11883
PRICE TREND
1 week	2 week	1 month	3 month	6 month	9 month	1 year
Price	305.1	299.9	288.75	349.6	283.9	303.7	318.9
Gain / Loss	3.57%	5.37%	9.44%	-9.61%	11.31%	4.05%	-0.89%
FV	5