Tatva Chintan Q3FY22 Concall Notes
@ishmohit1 sir @soicfinance #HomeworkDone
Business
-Saw strong growth in exports and will continue, currently exports are 80% of total revenue
-Serious Lithium battery production in India is not expected for 3-4 yrs, so growth will be majorly
@ishmohit1 sir @soicfinance #HomeworkDone
Business
-Saw strong growth in exports and will continue, currently exports are 80% of total revenue
-Serious Lithium battery production in India is not expected for 3-4 yrs, so growth will be majorly
export driven growth will be majorly export driven. Same for supercapacitors.
-Slow and steady growth expected in Electrolyte salts in coming years. Strong growth in volumes QoQ, and similar is expected Q4&Q1
-Received formal approval from two large customers for SDA,
-Slow and steady growth expected in Electrolyte salts in coming years. Strong growth in volumes QoQ, and similar is expected Q4&Q1
-Received formal approval from two large customers for SDA,
commercialization to begin in this year. Took 3 & 5 yrs to get approval as it is a high entry barrier area. Also in talks with one more large customer
-Submitted commercial sample of an agrochemical intermediate which could commercialize in 12-18 months
-Purchased new plot
-Submitted commercial sample of an agrochemical intermediate which could commercialize in 12-18 months
-Purchased new plot
capacity in Dahej of 5L sq ft (not in SEZ in anticipation to fulfil domestic demand 3-4 yrs down the line). This was done in line with existing facility to get saturated in 2-3 yrs and it takes 3 yrs approx to meet will all envir. clearances to get operational.
-Revenue mix for this quarter
SDA-51%, PTC-24%,PASC & others-22%, Electrolytes-2%
-Expected mix 3-4yrs hence
SDA-50%, PTC-15%, PASC-30%, Electrolytes-5%
-SDA is a high margin business for Tatva, but there are several products in each segment which have higher margin
SDA-51%, PTC-24%,PASC & others-22%, Electrolytes-2%
-Expected mix 3-4yrs hence
SDA-50%, PTC-15%, PASC-30%, Electrolytes-5%
-SDA is a high margin business for Tatva, but there are several products in each segment which have higher margin
-Competition
SDA-2nd largest globally,
PTC-Multiple plyers globally (including chinese players); leader in India with 30% mkt share,
Elec salts-Among 3 big players globally; only one in India,
PASC-Exact mkt share not ascertained, depends on customer orders & preference
SDA-2nd largest globally,
PTC-Multiple plyers globally (including chinese players); leader in India with 30% mkt share,
Elec salts-Among 3 big players globally; only one in India,
PASC-Exact mkt share not ascertained, depends on customer orders & preference
-Mix for SDA Application/Demand in Auto:Non-Auto is roughly 80:20, and is expected to remain same in years to come
-Asset turns for Dahej facility are 3x
-60% cap utilization for SDA facility, 90% for conventional reactors
-Comp. will stock up inventory, so that production is
-Asset turns for Dahej facility are 3x
-60% cap utilization for SDA facility, 90% for conventional reactors
-Comp. will stock up inventory, so that production is
not hampered given the upcoming Beijing Olympics and Chinese New Year
-Electrolytes have application in Renewable Energy Storage, Stabilizing power supply in electric grids, super capacitors (minimize emission, fuel consumption), support lithim battery (enhances its life)
-Electrolytes have application in Renewable Energy Storage, Stabilizing power supply in electric grids, super capacitors (minimize emission, fuel consumption), support lithim battery (enhances its life)
-One new product company is getting into is key raw material for electrolyte salts, another is a solvent for putting metal on electrode of lithium battery. These will take time to commercialize as they are high entry barrier and critical application products.
-Value chain for catalytic converter
SDA (This is where Tatva is)-->Zerolite (TC's customers)-->Catalyst(Automob. NitOx control)-->OEM-->Catalytic converter (assembled in cars)
SDA (This is where Tatva is)-->Zerolite (TC's customers)-->Catalyst(Automob. NitOx control)-->OEM-->Catalytic converter (assembled in cars)
Risks
-Industry & comp. facing challenges in terms of logistics, high raw material costs, power & fuel cost, supply chain disruption. Uncertain on how long this will continue
-SDA sales got impacted to global shortage in semiconductor chips, demand expected to normalize by Q1FY23
-Industry & comp. facing challenges in terms of logistics, high raw material costs, power & fuel cost, supply chain disruption. Uncertain on how long this will continue
-SDA sales got impacted to global shortage in semiconductor chips, demand expected to normalize by Q1FY23
-SDA sales are volatile in nature as it highly depends on Auto sector. Also there is no replacement demand for catalytic converter in 99% cases, Major demand from new vehicles being sold. So any slowdown can impact sales of SDA.
Management
-Appointed Mr. Ashok Bothra as new CFO of the company (CA having workex of 24 yrs)
-Key criteria for company to enter into any new chemistry/product is that it should be environmentally sustainable, focus on greener chemistry, effluent generation is minimized,
-Appointed Mr. Ashok Bothra as new CFO of the company (CA having workex of 24 yrs)
-Key criteria for company to enter into any new chemistry/product is that it should be environmentally sustainable, focus on greener chemistry, effluent generation is minimized,
chemistry is not simple where anyone can enter easily
-4 equipments now where they could run continuous flow chemistry synthesis (for R&D) Vs 2 earlier
-5 PhD Chemists Vs 1 earlier
-Softer Area-->Called themselves lucky for being able to get into new products earlier than
-4 equipments now where they could run continuous flow chemistry synthesis (for R&D) Vs 2 earlier
-5 PhD Chemists Vs 1 earlier
-Softer Area-->Called themselves lucky for being able to get into new products earlier than
expected (instead of boasting of their great R&D capabilities)
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