Ester industries Ltd conducted Q1 FY23 con call on 12 August 2022.
Here are the key highlights👇👇👇
Here are the key highlights👇👇👇
•Overview
-Company core business films and special polymer registered good growth despite challenging inflationary environment.
-EPA transaction rectification within 25-30 days would deleverage balance sheet and that funds would be used for planned cap ex.
-Company core business films and special polymer registered good growth despite challenging inflationary environment.
-EPA transaction rectification within 25-30 days would deleverage balance sheet and that funds would be used for planned cap ex.
-Better product mix and improved realisations with high sales volume resulted in delivering better operating profit despite high feed stock price and fuel prices.
-Lower finance expenses resulted in strong performance of core businesses.
-Lower finance expenses resulted in strong performance of core businesses.
-Good uptake for marquee established products.
-Improving product mix to de-commodities product portfolio and make it more towards specialty do that margins do not fluctuate.
-Improving product mix to de-commodities product portfolio and make it more towards specialty do that margins do not fluctuate.
-Avg sales realisations is function of raw material cost, product mix and customer mix.
-Product pipeline remains increasing offering better visibility and potential for improved performance.
-Product pipeline remains increasing offering better visibility and potential for improved performance.
•Financials
-Margins stood at 31% for quarter
-Finished goods prices increase substantially resulting in high input cost.
-Value added constituted of 22% of overall sales volume.
-Margins stood at 31% for quarter
-Finished goods prices increase substantially resulting in high input cost.
-Value added constituted of 22% of overall sales volume.
-Demand-supply imbalance caused by commissioning of new production line may cause margin compression in short term.
-There is no operational debt but interest bearing debt is about 300cr.
-There is no operational debt but interest bearing debt is about 300cr.
•Segmental performance
-Special polymer
~Special polymer have been a patent protected and innovation driven business with realisations tied to raw material prices.
~Due to entry barriers special polymer would be profitable business.
-Special polymer
~Special polymer have been a patent protected and innovation driven business with realisations tied to raw material prices.
~Due to entry barriers special polymer would be profitable business.
-Film business
~Growth in revenue and profitability ~Demand continue to remain stable
~Margin movement was better
~Normalisation of margins in near term due to commissioning of new production line.
~Growth in revenue and profitability ~Demand continue to remain stable
~Margin movement was better
~Normalisation of margins in near term due to commissioning of new production line.
-Engineering plastic business
~Entered into business transfer agreement to sell the business to Radici plastic.
~In Q1 FY23 Performance of business was benign.
~Low volume of engineering plastics compound and moderation in realisations led to margins compression.
~Entered into business transfer agreement to sell the business to Radici plastic.
~In Q1 FY23 Performance of business was benign.
~Low volume of engineering plastics compound and moderation in realisations led to margins compression.
•Cap ex
-Setting up a 48,000 tons plant at Telangana is progressing.
-New capacities are expected to come up in Karnataka, Gujarat which would increase the margins of company.
-Total cap ex is of 200cr. which would be spent in 12-18 months.
-Setting up a 48,000 tons plant at Telangana is progressing.
-New capacities are expected to come up in Karnataka, Gujarat which would increase the margins of company.
-Total cap ex is of 200cr. which would be spent in 12-18 months.
Loading suggestions...