Astec Lifesciences (ASTEC) — concall transcript

📢 Key Event
Astec LifeSciences reported 97% YoY revenue growth in Q2 FY23 driven by export expansion and higher realizations, with CMO contributing 8% of revenue.

🔄 What Changed
EBITDA margin contracted to 18% from 21% due to raw material inflation and fixed overheads; CMO revenue share increased to 8% in Q2; export sales grew 136% YoY; capex guidance set at INR 275-300 crores for FY23.

🔮 What's Next
CMO revenue to reach 20-25% of total revenues in near term; new R&D center operational by January 2023 with 100+ scientists; herbicide plant utilization to reach 55-60% this fiscal and full capacity by third year; capex of INR 275-300 crores allocated to R&D and plant expansion.

💡 Investor Takeaway
The company is aggressively scaling its CMO and export businesses while managing margin pressure through backward integration, targeting significant revenue growth and improved asset utilization over the next few years.

During the Q2 FY23 earnings call, Astec LifeSciences highlighted 97% revenue growth driven by export volume and pricing, with exports contributing 69% of total sales. Profit after tax doubled in Q2, though EBITDA margin contracted to 18% due to raw material inflation and higher overheads. Management outlined plans to scale CMO revenue to 20-25% of total, expand R&D capacity to 100+ scientists, and invest INR 275-300 crores in capex this fiscal, primarily for new R&D and plant upgrades. They emphasized backward integration progress and reduced import dependency, targeting full utilization of a new herbicide plant by FY23 end.

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About Astec Lifesciences Ltd (ASTEC)

Chemicals · Agro Chemicals · Listed on BSE

Market Cap: ₹1,275.25 Cr ROE: -17.0% ROCE: -4.2%

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🔥 Also filed on 30 September 2022

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