Key highlights from Jubilant Ingrevia Q3FY23 concall:
CMP: ₹ 492
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CMP: ₹ 492
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1)The company initially had a capex plan of Rs 2050 crores which it has now revised to Rs 2275 crores. The revision of this capex plan is due to the following additions:
a) Energy efficiency and debottlenecking projects of Specialty Chemical products
a) Energy efficiency and debottlenecking projects of Specialty Chemical products
b) new capacities for Vitamin B3 and B4
c) CDMO R&D expansion (expected to come online in Q3FY4).
2)The company has started selling their diketene derivatives however, the demand for diketene derivatives is low.
c) CDMO R&D expansion (expected to come online in Q3FY4).
2)The company has started selling their diketene derivatives however, the demand for diketene derivatives is low.
The company expects to attain 70-75% utilization of their diketene capacity by FY24. The Phase-II of diketene derivatives which is expected to come online in Q3FY24 for value added products will be of 2000 tons.
The products under this phase will majorly be used as building blocks by the company to manufacture downstream derivatives and only a small portion of these products will be sold by the company.
3)The company had done a capex for a CDMO GMP and non-GMP plant which was part of
3)The company had done a capex for a CDMO GMP and non-GMP plant which was part of
its long-term capex plan. The company is seeing additional traction for its CDMO business and has got new demand and new orders due to which the company has delayed the commissioning of this capex. This capex is expected to come online in Q4FY23 whereas the earlier guidance was
for Q3FY23. The company plans to attain 70-75% capacity utilization within the first year of operation and within 2-3 years they plan to attain 80-85% capacity utilization. GMP plant is for manufacturing of Pharma Intermediates and non-GMP plant will be for the manufacturing of
both Pharma and Agro intermediates which will be made under two multi-purpose plants.
4)The company had signed a CDMO contract worth Rs 270 crores for a period of 3 years with one of the leading global innovator pharmaceutical company. Under this contract,
4)The company had signed a CDMO contract worth Rs 270 crores for a period of 3 years with one of the leading global innovator pharmaceutical company. Under this contract,
the company had to supply 2 key GMP intermediates which would be used for the manufacturing of the patented drug of the innovator. The company has begun servicing that contract and the volumes are expected to rise from this quarter. The company is expecting a revenue of
Rs 90 crores in FY23.
5)The company is currently developing the product which is the part of their entry strategy in fluorination chemistry. The company expects to announce the capacity expansion in the next financial year.
6)The company is currently facing problems in
5)The company is currently developing the product which is the part of their entry strategy in fluorination chemistry. The company expects to announce the capacity expansion in the next financial year.
6)The company is currently facing problems in
their Nutrition and Health solutions business due to the ongoing flu situation in the US and Europe. The company faced an unfavorable pricing for its nutrition products in this quarter as against the previous quarter along with reduction in consumption from China.
The company however managed to sell high volumes of niacinamide in this quarter with a positive contribution margin. The company expects price and volume improvement by Q4FY23. Almost 70% of the revenue in this business comes from the animal feed industry and the remaining comes
from the food and cosmetics industry. The company is planning to set up a new GMP plant for Food and Cosmetic grade Vitamin B3 and Vitamin B4 for Food, Pharmaceuticals and other applications which is part of their revised capex plan. The company plans to reduce the dependence
from 70:30 to 50:50 which will help in building resilience in revenues and profitability for this business going forward.
7)There has been a decrease in the prices of both acetic anhydride and ethyl acetate due to the decrease in prices of feedstock acetic acid.
7)There has been a decrease in the prices of both acetic anhydride and ethyl acetate due to the decrease in prices of feedstock acetic acid.
The company has however, managed to grow the volumes for acetic anhydride due to the increase in demand for acetic anhydride overall. The competitors of the company for acetic anhydride in Europe are not able to produce at full volume due to the ongoing energy crisis situation
which is a favorable situation for the company as they may be able to cater to the demand which these companies may not be able to. The acetic anhydride capacity of the company is expected to come online in Q4FY23, & the company is positive about getting the capacity utilization
as soon as possible once this capacity comes online.
8)The company commissioned its 25,000 MTPA Food grade acetic acid plant in Q1FY23. The company is undergoing regulatory approvals for this product and expects to complete all the formalities in the next 1-2 months.
8)The company commissioned its 25,000 MTPA Food grade acetic acid plant in Q1FY23. The company is undergoing regulatory approvals for this product and expects to complete all the formalities in the next 1-2 months.
The commercial supply of this product is expected to begin from the end of this quarter or beginning of the next quarter with the revenues coming in from the next financial year. The company expects good demand from international customers for this product.
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