In an interview with CNBC-TV18, D Ram Reddy, Joint MD of Balaji Amines said that the company will sustain 20 percent margins in FY17 and has capex plans worth Rs 30-40 crore to set up a Morpholine unit with an installed capacity of 10000 million tonne per annum (MTPA).
Balaji Amines reported reported a good set of first quarter earnings for this fiscal where revenue increased 4 percent to Rs 166 crore year-on-year (YoY) and net profit was up 105 percent to 26.3 crore (YoY).
In an interview with CNBC-TV18, D Ram Reddy, Joint MD of Balaji Amines said that the company will sustain 20 percent margins in FY17 and has capex plans worth Rs 30-40 crore to set up a Morpholine unit with an installed capacity of 10000 million tonnes per annum (MTPA).
Below is the verbatim transcript of D Ram Reddy's interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Sonia: Can you tell us what led to this stellar performance in your margins and whether rate of 24 percent is something that you can sustain for the rest of FY17?
A: In last quarter also, we said around 20 percent is sustainable, what we are maintaining, it has done with some extraordinary income. However, we are getting this because of some higher utilisation in some of the capacities like specialty chemicals.
They have done well in this quarter capacitywise. If you see volume wise, about 10-12 percent increase volumes even though the revenue is marginally high. This has helped us in giving the good results -- profit before tax (PBT) we have 67 percent increase when compared to the last year same quarter. We are going for one expansion. By next year this time we will commence the production of that plant for about 10,000 morpholine.
Latha: What about the revenue itself? This has come from how much in terms of volume growth and capacity utilisation?
A: About 10-12 percent is the volume growth when you compare last year same quarter this time. About 78 percent capacity utilised in the metal mine.
Latha: You will be able to do better income growth in the coming quarters?
A: It should because when the prices are stable like this then definitely we will do better than this.
Sonia: Tell us little bit about the capex plans as well. You have taken a decision to set up a manufacturing unit of morpholine, what will the capacity be in the first phase and when will it start to contribute to your revenues?
A: This will start contributing for Q2 of the next year and we will be spending around Rs 30-40 crore but mostly we will be doing from internal accruals if at all anything required but the small amounts, we may go to the borrowing.
Latha: Therefore if the capex grows, what will be your full year revenue and EBITDA growth and what will it be next year when your capacity kicks in?
A: EBITDA growth I can say -- this is 22 percent can be maintained this entire year also what I can see from the present scenario but revenues I cannot say because if prices go down in volumes if you compare with year on year (YoY) basis. Revenues, we cannot say because prices are going down, very volatile raw material prices and end product prices are also like that.
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