By: ICN Bureau
Last updated : October 23, 2021 11:26 am
Speciality chemicals (38% of revenue mix) grew 20% YoY to Rs 1,220mn on the back of increased exports.
HDFC Securities retains its add rating on NFIL on the back of earnings visibility, given long-term contracts, and tilt in sales mix towards high-margin high-value business. EBITDA/APAT were 7/8% above our estimates, owing to lower-than-expected raw material costs, higher- than-expected other income, offset by a higher-than-expected opex and depreciation.
Financial performance: Revenue grew 5/3% YoY/QoQ to INR 3,244mn. EBITDA fell 11% YoY, and grew 7% QoQ to Rs 835mn in Q2 with EBITDA margin coming in at ~26% (-463/+90bps YoY/QoQ). The margin was impacted negatively on a YoY basis, owing to higher raw material costs, increased employee cost, higher maintenance expenses, and elevated freight cost.
Segmental performance: Speciality chemicals (38% of revenue mix) grew 20% YoY to Rs 1,220mn on the back of increased exports. Two new products were launched in the speciality chemicals business unit (BU) - one catering to the agrochemical sector, and the other to speciality materials sector.
CRAMS BU (25% of revenue mix) de-grew 17% YoY to 820mn, owing to a higher base, as a substantial part of the realisation of revenue of Q1FY21 had spilled over to Q2FY21. CRAMS BU continues to perform well, owing to repeat orders from its existing customers and encouraging new enquiries. NFIL plans to debottleneck its cGMP-3 plant by this year end, post which, it plans to set up a cGMP-4 plant.
The high performance product (HPP) plant shall commence supplies in Q4FY22 or Q1FY23 and the multi-purpose plant (MPP) capacity would come on stream in H1FY23, both of which would drive future growth.
Exceptional items adjustment: Marked-to-market gains of INR 11mn have been excluded to arrive at an APAT of INR 610mn in Q2.