India's specialty chemicals company, Balaji Amines Limited posted a robust net profit during first quarter of the current fiscal year.
Company's net profit rose by 72.11% YoY to Rs 32.96 crore in Q1FY21 as against Rs 19.15 crore during the previous quarter ended June 2019.
However its sales declined marginally by 0.03% to Rs 222.91 crore in the quarter ended June 2020 as against Rs 222.98 crore last year.
Total volumes stood at 18,306 MT for Q1FY21 as against 20,149 MT in Q1FY20. The fall in volumes was on account of sub-optimal capacity utilization in the month of April and May due to COVID-19 led disruptions.
Amines volumes stood at 4,153 MT, Amines Derivatives volumes stood at 8,277 MT and Specialty Chemicals volumes stood at 5,876 MT during the quarter.
EBITDA for Q1FY21 was % 53.50 crore as compared to % 39.38 crore in Q1FY20, posting a growth of 35.86%. EBITDA margin for Q1FY21 was at 25.12%, up by 827 basis points, as compared to 16.85% in Q1FY20. The improvement in operating margins was primarily on account of better product mix and stable raw material prices.
On the performance D. Ram Reddy, Managing Director commented, “Despite the economic upheaval and disruptions caused by the COVID-19 pandemic, we had relatively smooth business operations during the lockdown period, as our products come under the category of essential commodities.
Our subsidiary company, largely catering to end-user industry of agrochemicals, which had stopped operations in April and May, has also started operating at pre-COVID levels since the first week of June 2020. The sales in the month of April and May were not affected, as we had sufficient finished goods inventory. Currently, we have a sales of about % 8 to 10 crore per month. It is important to note that the prices of finished products as well as raw material of the products of our subsidiary company have fallen. There will be a steady ramp up in the operations of the subsidiary company in the coming quarters.
We have already made investments of about Rs. 80 crore in our 90-acre Greenfield Project, out of the proposed first phase capex of Rs. 150 crore. We expect to commence the manufacturing of Ethylamines by the end of the last quarter of this financial year. Presently, there is suppl shortfall of about 9,000 tons of Ethylamines in India, which is imported from outside. This supply gap is expected to increase to about 15,000 tons per annum in the next two years. Our company will be well-positioned to address this increase in market demand.
We are currently manufacturing about 9 tons of Acetonitrile per day. Post de-bottlenecking of the plant, for which delivery of critical equipments was delayed due to lockdown, we expect to gradually ramp-up the production to about 18 tons per day by the end of this fiscal year. The demand for Acetonitrile is expected to be elevated, as it has emerged as user-friendly solvent and is being preferred by many end-users over other solvents. Also, the pharmaceutical companies prefer superior quality of Acetonitrile, which is manufactured by the methodology of direct route, which is difficult to produce viz-a-viz the by-product route (i.e. via Acrylonitrile route).
Our thrust remains to expand our portfolio of key derivative products alongside entering newer specialty chemicals to gain from both vertical integration and operating efficiencies. Our endeavour remains to produce high-quality products which substitute imports, for which we have been continuously undertaking expansions to reinforce our production capacity for future growth. We also plan to steadily expand our reach in the export market over medium to longterm, given the eagerness of global companies to reduce their exposure to Chinese suppliers.”
