Balaji Amines Limited has reported a strong growth in sales, profits in Q4FY22 and full year 2022.

 

The company's total income grew by 87% and stood at Rs. 781.15 crores during the period ended March 31, 2022 as against Rs.417.63 crores during the period ended March 31, 2021.

 

Net profit in Q4 rose by 28% and reached Rs.108.72 crores as against Rs.84.49 crores last year.

 

Company's EPS also climbed 28% and touched Rs.33.56 in Q4 as compared to Rs.26.08 in same quarter last year.

 

The company has recommended final dividend of Rs. 6/- per equity share i.e. 300% on face value of Rs. 2/- per share and the same will be payable after its approved by the shareholders at the ensuing Annual General Meeting.

 

For the full year, the company's total income jumped by 76% and reached Rs.2327.59 crores as against Rs.1317.52 crores in FY21.

 

Net profit for the full year rose by 54% and touched Rs.368.4188 crores as against Rs.238.1925 crores in 2021.

 

Company's EPS also jumped by 54% and reached Rs.113.71 for the Financial Year ended March 31, 2022 as compared to Rs.73.52 last year.

 

On the performance D. Ram Reddy, Managing Director, commented, “In an environment, where the chemical industry is facing major margin pressures due to inflated raw material prices and other costs, we are pleased to have delivered decent quarterly results. In this endeavour, we were aided by improved operating leverage, as our DMF and new Ethylamines plants have been running at much improved capacity utilization as compared to previous quarters.

As announced earlier, our capex for DMC plant under Phase 1 of our 90-acre Greenfield Project (Unit IV) is almost complete and we hope to commence operations by the end of May 2022. With some refinements in the manufacturing process, this plant will have capacity to manufacture about 15,000 tons of DMC per annum. This will also result in annual production capacity of 15,000 tons per annum of Propylene Glycol. At peak capacity utilization, this new plant will be able to generate revenue of Rs.300 to 400 crore per annum. The company would be the sole manufacturer of DMC in India and currently the annual domestic demand stands at about 8,000 to 9,000 tons which is completely met by imports. We are confident to achieve capacity utilization of 60-70% at our DMC plant in our first year of operation itself. DMC is used in the production of Polycarbonate and Lithium Batteries – the consumption of which will exponentially grow in India backed by various government incentives. Also, we see encouraging scope for exporting DMC to outside markets.

Secondly, the demand of DMF continue to remain healthy and with the completion of the debottlenecking exercise, the capacity utilization of this plant has increased substantially, the full impact of which is likely to be visible in the next financial year. The capacity utilization of DMF plant in Q4FY22 was about 65%. For the full year FY23, we expect the capacity utilization of DMF plant to increase to 75-80% from about 42% in FY22.

The products of our subsidiary company – Balaji Specialty Chemicals Ltd. – continue to witness robust demand and higher price realization. Our subsidiary company recorded total revenue of over Rs. 500 crore in FY22. Unavailability of key raw materials dissuaded us from operating the subsidiary plant at full capacity in FY22. However, the supply bottlenecks have eased, and we expect to substantially increase the utilization levels in FY23. We also aim to increase the share of exports from our subsidiary plant to about 30% going forward from about 25% in FY22.

Coming to our capex plans for the future growth journey, we would start initiating capex for installation of the below plants in FY23 and FY24:

1) New N-Butylamine plant with a capacity of 15,000 tons per annum
2) Acetonitrile plant with a capacity of 15,000 tons
3) Methylamine plant with a capacity of 40,000 tons and
4) DMF plant with a capacity of 30,000 tons

The total capex over FY23 and FY24 will be about Rs. 300-350 crore. The production at above plants will commence between mid FY24 till end of FY25.

For our new Acetonitrile plant, we plan to undertake production through a new upgraded technology, where we envisage to have cost advantage, which will enable us to withstand higher prices of acetic acid and shall lead to healthy operating margins. This plant is likely to get commissioned by the mid of FY24. Over medium to long term we foresee a substantial demand for this product as ‘China Plus One’ strategy takes centre stage and the PLI incentives provided by the Government of India gives further impetus leading to substantial capex by pharmaceutical and agrochemical companies.

Upon smoother accessibility to the raw materials for matching products at our clients’ end in coming quarters, we expect to witness an increase in capacity utilization for our legacy products in FY23. We expect substantial improvement in volume offtake in FY23 from improved capacity utilization at our Ethylamines (new plant), DMF and Acetonitrile plants as well capacity additions on account of our new DMC plant.”