Friday, 29 July 2011

Balaji Amines - Takeaways from their quarterly conference call

Balaji Amines had a conference call on July 28, 2011.

Here are the key takeaways from it:-

  1. Methyl Amine capacity is getting increased from 24,000 to 54,000 tons
  2. Production of dimethylformide is to start by end of 2013. Total capacity planned is 30,000 tons. Currently, only RCF manufactures this in India and has a capacity of 5,000 tons. India imports the rest of the demand of around 30,000 tons. After Balaji's capacity comes online, India may be in a position to meet all of its needs domestically with some export opportunities as well.
  3. The expected revenue from both these initiatives from a 3-year timeframe (2014-15) is about 350 cr. 180 cr is expected from the methyl amine expansion and another 170 cr from  dimethylformide.
  4. The company has filed for European DMF for PVP K30. It will take about 6-8 months to get approval. Once approved, the company will be able to export PVP K30 to Europe.
  5. The interest costs have gone up dramatically from 9-10% to 13.5-14% currently. This has resulted in high interests costs this quarter and is likely to remain like this for the next few quarters.
  6. Prices of key raw materials have also increased after accidents in BASF and Nan Ya Plastics, two large global suppliers.
  7. The company has a capex plan of 70 cr out of which 50 cr is for the methyl amine expansion and 20 cr for setting up dimethyl formide production.
  8. Company has a working capital loan of about 80-85 cr and total loan book of 157 cr.
  9. The newly added capacities are working at 40-50% of capacity currently.
  10. The company is targeting a topline of 420-450 cr in FY12
  11. The company is targeting a PBT of 47-48 cr in FY12
  12. The promoter holds 54% of the company's stock and another 20% is held by close relatives. 20% of promoter holding is pledged to banks to get beneficial terms for the term loans.

4 comments:

  1. Hi,

    I think Mr. Reddy had mentioned PBT to be about 47-48 Cr instead of NP.

    Regards,
    Ayush

    ReplyDelete
  2. is there any conclusion? buy sell indication?

    ReplyDelete
  3. @ Ayush: Thanks. Corrected. A bottomline of 47-48cr would mean a 70-80% growth, whereas the company is tragetting somewhere between 10-15%.

    ReplyDelete
  4. @ One Cent At a Time: Depends on the time horizon you have. I would continue to hold with the expectation that the turnover and profits is likely to double from here on a 3-4 year time frame.
    On a shorter time frame, you can book profits and look at Smruthi Organics. (http://dalal-street.in/smruthi-organics-update/).

    ReplyDelete

Learning from Security Analysis - Part 1

I have started re-reading Security Analysis, 6th edition, (also will add on things from the 5th ed). I have been putting it on the backburn...