Key highlights from Tatva Chintan Q3FY23 concall:
CMP: ₹ 1,884
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CMP: ₹ 1,884
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1. The company has supplied multiple electrolyte salt samples for approval to a new global potential customer and are awaiting their approval.
The off-take from one of their large customers on this side is on hold as they are currently undergoing debottlenecking and the company expects the demand to come in by the end of June 2023.
2. The company received the first approval for its high purity electrolyte solution which was made on the R&D level. In January 2023, they shipped the first small scale trial order from the pilot plant after meeting all the necessary quality specifications.
The company expects to receive approvals and a plant scale trial order by June 2023. The company will send its second sample of R&D scale electrolyte solutions to another customer in February 2023.
3. The equipment which the company was to receive for Monoglyme is in the final stages of inspection and the company expects to receive that equipment by the first week of February. The company will begin to supply trial orders once they receive the equipment.
4. The company has received plant scale trial orders for one of their products based on continuous flow chemistry and they expect to supply this product by the end of August 2023.
The company expects to begin commercial supplies post April 2024 once the supply of trial samples is successful.
5. The company has commenced the production for commercial supplies of a product which has application in the area of metal extraction.
5. The company has commenced the production for commercial supplies of a product which has application in the area of metal extraction.
The first shipment is expected to happen in February 2023.
6. The company has developed a product which is again based on continuous flow chemistry.
6. The company has developed a product which is again based on continuous flow chemistry.
This product is a key starting material for multiple agrochemical intermediates and the company has been allotted two projects to work on 2 downstream agrochemical intermediates.
7. The company has developed another product which is an agrochemical intermediate for which the company expects to receive plant scale trial orders by July/August 2023 with commercialization happening in FY24.
The company has submitted plant scale trail samples for a pharma intermediates. The company hopes to go into commercialization of this product in FY24 however, it may take longer as pharma approvals are time consuming.
8. There has been some uptick in SDA demand as compared to the previous quarter however, the demand has not yet reached the normal levels. The company expects the demand to be at the current levels for the next 2 quarters.
9. The company had earlier guided SDA demand to kick in post Q3FY23. However, one of their Chinese customers, which is a big client for the company, has been stuck with high inventory pile and low demand due to long shutdowns and a large drop in heavy-duty vehicle sales in China.
10. That Chinese company is expected to begin procurements by May 2023 which will result in the company getting a good demand from this customer. The other customers of the company have come back on track and the company is getting a good demand from these customers.
11. In Q3FY23, the company successfully supplied plant scale trial material of a new SDA to a new customer. This order will have applications in plastic recycling.
The company received an opportunity to supply a second SDA plant scale trial order which the company expects to complete by Q4FY23 with the approvals expected to come by September 2023. This order is particularly for Euro VII application.
The company expects the volumes to come back to normal post July 2023 and increasing volumes post July 2023.
12. The company has completed successful plant trials of their flame-retardant products and has received formal approval from 2 customers & are awaiting 4 more approvals.
12. The company has completed successful plant trials of their flame-retardant products and has received formal approval from 2 customers & are awaiting 4 more approvals.
The company expects to begin commercial supply and volume scale-up by Q1FY24 if they get some plant scale trial orders in January 2023.
13. The capex at Dahej SEZ plant has been completed and the company is undergoing trial runs. The company is expected to begin commercial production by 1 February 2023.
The expansion of the R&D facility at Vadodara is in its finishing stages.
The expansion of the R&D facility at Vadodara is in its finishing stages.
The company has used 93% of its IPO proceeds of around ₹207 crore as of 9MFY23.
14. The company may look to raise fresh capital for a greenfield expansion at their new land parcel in the next few quarters.
14. The company may look to raise fresh capital for a greenfield expansion at their new land parcel in the next few quarters.
The environmental clearance is expected to be in place by March 2023 as most of the groundwork for the EC has been done. Post the environmental clearance, the company expects to complete the project in 24-27 months.
The company expects to get a revenue of ₹800 to ₹850 crore by FY25/FY26.
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