HIMADRI SPECIALITY CHEMICAL LIMITED FY
2018
EARNINGS CONFERENCE CALL JUNE,01,2018
Ø MR.ANURAG CHOUDHARY is the CEO :Management
quality has been generally very good, ambitious
and efficient. But, they must show themselves more as Pro Retail Investor or
Investor friendly, by declaring better dividends in future.
Ø Total Revenue in FY 18 is Rs. 1,971 crores, against
Rs.1318 cr in FY 17 with a growth of 49% YoY.
Ø EBITDA
increased from Rs. 247 crores in FY 2017 to Rs. 450 crores in FY 2018 – due to
higher capacity utilization, better product mix, operational efficiencies,
focused marketing and increase in high-value-added products.
Ø NET PROFIT :- Tripled to Rs. 243 crores in FY 2018
from Rs. 81 crores in FY 2017.
Ø EQUITY : stands at Rs.41.84 cr
Ø DIVIDEND RATE : 10% (FV:RS.1)
Ø DILUTED EPS : at Rs. 5.8 against Rs.1.94 in FY 17
Ø NET DEBT has come down to Rs. 629 crores now, from
Rs. 717 crores in FY 2017.
Ø NET DEBT-TO-EQUITY RATIO is
0.43x. Repaid Rs. 500 crores of debt over last 5 years. Will continue with
efforts to bring down the debt level.
Ø NET DEBT-TO-EBITDA
has come down to 1.4 times.
Ø NET WORKING CAPITAL is 31% of net sales from a level of 36% in
FY 2017 and 55% in FY 2014 – due to various strategies in supply chain
management and operational excellence.
Ø PRICE TREND : Himadri MP rose by nearly 100% from 70 to 142 over a one year period but has now fallen to
138. The volume of transactions on NSE is quite good at over 1 lakh generally,
ensuring BUYs and SELLs easily.
Ø Company
focus is clearly SPECIALITY CARBON BLACK
and that is the niche area with high profitability.
Ø ADVANCE CARBON MATERIAL :
50 metric tonne capacity per month and COMPANY is running on full capacity.
Ø COAL TAR PITCH : end-user
industries like aluminium and graphite electrode industries did well during FY
2018.
Ø ALUMINUM PRODUCTION in
India is being ramped up through operationalization of existing capacity. Aluminium
majors expect the strong ramping up of products and volumes to continue in FY
2019.
Ø GRAPHITE ELECTRODE INDUSTRY saw
high capacity utilization of 80% during FY 2018, with an estimated utilization
in high 80’s in FY 2019.
Ø ANTI-DUMPING DUTY on SNF imports from
China - with a positive impact on both volume and prices.
Not on Naphthalene.
Ø REFINED NAPHTHALENE :Doubled
capacity during the year, leading to high-value addition. volume is already
1,400 tonnes at full capacity currently. Over a period of time, we will be
increasing this capacity further.
Ø COAL TAR DISTILLATION : capacity will
increase from 400,000 metric tonnes per annum to 500,000 metric tonnes per
annum from Q3 FY 2019. It will come online after the annual shutdown in Q2.
Ø CARBON BLACK :
due to focused marketing, led to sustainable volumes, better product mix, and
better profitability for us, with the optimum capacity utilization of around 88%.
Ø on
the carbon black business, pricing is high in China also. So there is no chance
of any dumping coming from China to India.
Ø ADVANCE CARBON MATERIAL :
is operating at full capacity of 50 metric tonnes per month. Clearly 600 metric
tonnes is achievable. But next full year, we will be having 5,000 metric tonnes
capacity. We are supplying to 5 customers currently in different countries and
in different segments. We will increase the number of customers, depending on
the availability of material from our end.
Ø And Setting up capacity of 20,000
metric tonnes of ADVANCE CARBON MATERIAL
over the next 2 years.
Ø LITHIUM-ION BATTERIES :
Current global demand is in excess of 200,000 tonnes for anode material per
annum, which is growing at a CAGR of 30% to 40% per year.
Ø Here
also additional capacities are being built up.
Ø SPECIALITY CARBON BLACK :
Global market is in excess of 1 million tonnes per annum, primarily used in
high-end rubber and non-rubber applications like plastics, fibers, inks, coatings,
wires, and cables.
Ø NEW SPECIALITY CARBON BLACK :
launched 10 new grades so far.
Ø Setting
up a capacity of 60,000 metric tonnes in our facility at Mahistikry in West
Bengal for non-rubber uses and tire speciality – to be ready by March 2019. Plan
to launch 40 new grades of speciality carbon black in next 2 to 3 years.
Ø It wants to be among TOP 5 PRODUCERS of
speciality carbon black globally in next 5 years.
Ø For
new product lines, capital expenditure is Rs. 600 crores in next 2 years funded
through internal accruals with No equity
dilution.
Ø Himadri,is
creating multiple value-added products serving diverse industries like
aluminum, graphite electrodes, tire, steel, rubber, construction chemical,
agrochemical, infrastructure, power, plastics, inks, lithium-ion batteries,
electric vehicles, etc. both in core and sunrise sectors of the economy. It is
a one of its kind integration globally and Himadri has carved a unique
speciality carbon play.
Ø It
is confident of product quality, demand, prices and sustainability and very few
competitors.
Ø Management
is a visionary Management with lots of ambition and great plans and Great
Execution capabilities.
Ø So
will it be Potential Multibagger? It could be. Make your own calculations
further. Make your decisions. A long term Investor must study facts and take
his own decisions always. I wish you all the Best.
