AksharChem (India) (AKSHARCHEM) — concall transcript

📢 Key Event
Board recommended a final dividend of Rs.3.50 per share (35% of face value) for FY2018-2019.

🔄 What Changed
Debt-to-equity ratio of 0.04x; working capital loan of Rs.11.5 Crores; pollution treatment expenses increased to Rs.16 Crores; H-Acid capacity utilization improved; precipitated silica project at Dahej progressing toward commercial production in H2 FY2020.

🔮 What's Next
Target 95% capacity utilization; expect 15% topline growth; EBITDA margins to stabilize between 10% and 12%; precipitated silica to start commercial production in H2 FY2020; pigment expansion planned post-silica; focus on export markets amid China disruptions.

💡 Investor Takeaway
The company is stabilizing operations after H-Acid teething issues, with improving utilization and export opportunities, but faces ongoing environmental cost pressures and margin volatility in volatile dye intermediate markets.

AksharChem reported FY2019 revenue of Rs.323 Crores, up 22% YoY driven by volume growth and higher realizations, with H-Acid and CPC Green contributing new capacity. Gross margins were pressured by crude price volatility, currency swings, and raw material disruptions, while EBITDA margins stood at 10.7% for the year and 6.7% in Q4. The company resolved H-Acid quality issues, secured customer approvals, and began exports to China. Pollution treatment costs rose to Rs.16 Crores due to H-Acid, and debt remains low at 0.04x debt-to-equity. Capacity utilization is 85%, with plans to reach 95% and expand precipitated silica production in FY2020.

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About AksharChem (India) Ltd (AKSHARCHEM)

Chemicals · Chemicals · Listed on BSE

Market Cap: ₹306.86 Cr P/E: 12.2 ROE: 26.9% ROCE: 34.0% Div Yield: 0.92%

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🔥 Also filed on 31 March 2019

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