Chemcon Speciality Chemicals Ltd · NSE:CHEMCON
Chemcon Speciality Chemicals — Q2 FY23 Earnings Presentation
36 slides from Chemcon Speciality Chemicals's earnings presentation, Nov 12, 2022
Slide 1: Cover letter to stock exchanges
12th November 2022 To, To, BSE Limited National Stock Exchange of India Limited Listing Compliance & Legal Regulatory Listing & Compliance Phiroze Jeejeebhoy Towers, Exchange Plaza, Bandra-Kurla Complex, Dalal Street, Mumbai - 400 001 Bandra East, Mumbai 400 051 Stock Code: 543233 Stock Symbol: CHEM
Slide 2: Investor Presentation – November 2022
Chemcon Speciality Chemicals Limited Investor Presentation –November 2022
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Chemcon Speciality Chemicals Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe
Slide 4: Q2 & H1 FY23 Highlights
Q2 & H1 FY23 Highlights
Slide 5: Business Highlights
Business Highlights “Q2FY23 Business performance has been slow primarily due to lower volume offtake from pharmaceutical manufacturers. Most of our clients are facing challenges due to adverse pricing scenario across formulation & softening of demand. For Q2FY23, we have registered a revenue of Rs 5
Slide 6: Performance Highlights
Performance Highlights Total Revenue (Rs. Cr) EBITDA (Rs. Cr) PAT (Rs. Cr) 89.4 33.6 25.5 61.2 57.9 18.9 14.6 9.6 7.8 Q2 FY22 Q1 FY23 Q2 FY23 Q2 FY22 Q1 FY23 Q2 FY23 Q2 FY22 Q1 FY23 Q2 FY23 Geographic-Wise (%) Business-wise (%) Production Volume (MT) 2,051 1% 1% 1% Others Export 43% 37% 31% 28% 1,42
Slide 7: Financial Trends
Financial Trends Total Revenue (Rs. Cr) EBITDA (Rs. Cr) PAT (Rs. Cr) 147.3 43.1 33.3 118.4 36.8 28.0 H1FY22 H1 FY23 H1FY22 H1FY23 H1 FY22 H1FY23 Geographic-Wise (%) Business-wise (%) Production Volume (MT) 3,403 1% Others 24% 0% 2,849 Export 37% 30% 56% Oilwell 1,048 1,764 Oilwell Speciality 76% 69%
Slide 8: Recent Developments
Recent Developments Recent Developments Land Acquisition Commissioning of Solar Power Plant » Purchased a land parcel at » Commissioned ~2.1 MW solar Gothda, near Vadodara for future power plant at Dabhoi, Vadodara leg of expansion Commercialization P10 unit by Q1FY24 Commercialization P9 unit » It
Slide 9: Profit & Loss Statement
Profit & Loss Statement Particulars (Rs. Crs) Q2 FY23 Q2 FY22 Y-o-Y H1FY23 H1FY22 Y-o-Y Revenue from Operations 57.9 61.2 -5.4% 147.3 118.4 24.4% Cost of Goods Sold 35.0 30.8 73.2 59.5 Employee Cost 4.9 4.8 10.6 9.0 Other Expenses 8.4 6.7 20.4 13.1 EBITDA 9.6 18.9 -49.4% 43.1 36.8 17.2% EBITDA Margi
Slide 10: Balance Sheet
Balance Sheet ASSETS (Rs. Crs) Sep-22 Mar-22 EQUITY AND LIABILITIES Sep-22 Mar-22 Non-Current Assets EQUITY AND LIABILITIES Equity a) Property, Plant And Equipment 92.2 81.7 a) Equity Share Capital 36.6 36.6 b) Capital Work in Progress 37.1 34.0 b) Other Equity 399.1 380.6 c) Right Of Use Asset 0.2
Slide 11: Cash Flow Statement
Cash Flow Statement Particulars (Rs. Crs.) Sep-22 Sep-21 Net Profit Before Tax 44.7 37.6 Adjustments for: Non Cash Items / Other Investment or Financial Items -0.8 -0.6 Operating profit before working capital changes 43.9 37.0 Changes in working capital -32.2 15.8 Cash generated from Operations 11.8
Slide 12: Company Overview
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Slide 13: Company Snapshot
Company Snapshot Incorporated in 1988 Only Manufacturer of HMDS in India Manufacturer of Speciality Chemicals 3rd Largest Manufacturer of HMDS Worldwide An ISO 9001:2015 and ISO 14001:2015 Certified Company Largest Manufacturer of CMIC worldwide Business Verticals: Pharmaceuticals & Oilwell Completi
Slide 14: Evolution
Evolution FY89 FY95-98 FY01-03 FY05 FY14 FY15-16 » Company was » First sale of few » Commenced HMDS » First export shipment of » First sale of CMIC » First sale of Calcium incorporated as chemical products Business in 2001 HMDS Bromide (Solution) Gujarat Quinone • Pyridine Private Limited Hydrobromi
Slide 15: Global Market Presence
Global Market Presence Global Presence Key Countries » United States of » Japan America » United Arab FY22 Export Contribution*: » Italy Emirates ~37% » South Korea » Germany » Russia » Spain » People’s Republic of » Thailand China » Malaysia Over Two Decades of • Manufacturing Well Equipped to Seiz
Slide 16: Entry Barriers
Entry Barriers Complex Chemistry Stringent Impurity Measure » The involvement of complex chemistry in » Our processes and products are subject to, and the manufacture of the Products, which is measured against, high quality standards and difficult to commercialize on a large scale stringent impurity
Slide 17: Key Long-Term Relationships
Key Long-Term Relationships Pharmaceutical Chemicals Oilwell Completion Chemicals Inorganic HMDS CMIC Bromides Shree Radha CC Gran Limited Overseas Liability Company Longstanding New Product New Customer Strong Base Clients Development Reach Top 7 customers Leading to increase Few customers age Well
Slide 18: Moving up the Value Chain
Moving up the Value Chain Added New Product like FY15 Revenue FY22 Revenue Business 4 CBC, 2,5 DHT & BromoBenzene Others Rs 64 Crs Rs 257 Crs Commenced CMIC business in 2014 CMIC Rs 10 Crs Rs 68 Crs HMDS Rs 36 Crs Rs 122 Crs Commenced HMDS business in 2001 Bromides Rs 13 Crs Rs 60 Crs Commenced Brom
Slide 19: Board of Directors: Experienced Team
Board of Directors : Experienced Team Kamalkumar Rajendra Aggarwal Navdeep Naresh Goyal Chairman and Managing Director Deputy Managing Director » Holds Diploma in Petrochemical Technology (Plastic » He has more than 11 years of experience in operations. He Technology) from the Maharaja Sayajirao Uni
Slide 20: Board of Directors: Independent Directors
Board of Directors : Independent Directors Lalit Chaudhary Pradeep Agarwal Independent Director Independent Director » Qualified as Chartered Accountant and Company Secretary » He holds a bachelors’ degree in commerce from the Sardar » He is also an Independent Director of Bharat Petroleum Corporati
Slide 21: Key Certifications
Key Certifications Key Certificates R&D Environment In-house laboratory to test Complying All Environment Laws » Raw materials procured » The Environment (Protection) Act, 1986 » New Products & Innovation » Water Prevention and Control of Pollution Act » Final products testing at the various stages
Slide 22: Product Overview
Product Overview
Slide 23: Market Overview
Market Overview Oilwell Completion HMDS CMIC Chemicals Global Market ~35,700 MT ~6,880 MT ~362,000 MT Capacity (CY19) Global Market ~25,390 MT ~3,927 MT ~246,000 MT Production (CY19) Chemcon Production 2,068 MT 1,295 MT 2,703 MT (FY22) Chemcon Share in > 5% > 30% ~1% Global Market Domestic Import (C
Slide 24: HMDS
HMDS Hexamethyldisilazane / Hexamethyldisilane » HMDS, an organosilicon compound, is a reagent and a precursor to bases that are popular in organic synthesis and organometallic chemistry » HMDS is widely used in the pharmaceutical industry as a silylating agent in the process of manufacture of pharm
Slide 25: CMIC
CMIC Chloromethyl Isopropyl Carbonate » CMIC (chloromethyl isopropyl carbonate) is an antiviral drug intermediate product, which is a key intermediate for anti-AIDS and anti-hepatitis B drug Tenofovir » The downstream product of chloromethyl isopropyl carbonate, Tenofovir is a nucleotide antiviral d
Slide 26: Oilwell Completion Chemicals
Oilwell Completion Chemicals Inorganic Bromides: Calcium Bromide, Zinc Bromide and Sodium Bromide » Oilwell Completion Chemicals are used to complete the well and is normally a salty solution made up of chlorides or bromides » In addition to cleaning the wellbore, after the drilling is finished, com
Slide 27: Manufacturing Facilities
Manufacturing Facilities » P4 » P6 » P7 » P5 » P8 » P9 » P10 » P1 » P3 » P2 Improving Dedicated Plants Multipurpose Plants In-house Laboratory Warehouses Efficiencies 26
Slide 28: Manufacturing Facilities
Manufacturing Facilities Installed Capacity Volume Reactor Located at Manjusar near Plant No Product categories Product Manufactured (MT P.A) Capacity (In KL) Vadodara, Gujarat P-3 & P-7 HMDS and ancillary products 4,200 177.80 9 Operational Plants P-2 HMDS (hi-purity) 600 13.00 P-4 CMIC 1 Proposed
Slide 29: Growth Drivers
Growth Drivers Capacity Expansion Import Substitution » We intend to build two additional plants P9 & P10 unit in FY23 » India’s current domestic demand is being catered by imports for HMDS and CMIC » These additional plants will manufacture chemicals which are principally used in the » We are the o
Slide 30: Way Forward
Way Forward Moderate Recovery in Exploring Moderate Growth in Opportunities in Pharma Industry Oil Industry New Products Leading to Long Term Sustainable Growth New Products, New Clients, New Applications, New Opportunities 29
Slide 31: Financial Highlights
Financial Highlights
Slide 32: Financial Trends
Financial Trends Total Revenue (Rs. Cr) EBITDA (Rs. Cr) PAT (Rs. Cr) +13.0% +16.0% 303.3 81.1 81.6 +24.2% 62.8 262.1 257.1 70.3 56.4 243.5 66.1 48.9 43.0 157.6 45.1 26.4 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Geographic-Wise (%) Business-wise (%) Production Volume
Slide 33: Performance Highlights
Performance Highlights Total Revenue (Rs. Cr) 130 131 121 122 107 84 88 65 68 56 60 48 33 34 31 HMDS CMIC Oilwell FY18 FY19 FY20 FY21 FY22 Production Volume (MTPA) 8,248 5,847 6,039 2,915 3,033 2,703 1,674 2,068 1,796 2,011 1,588 1,196 1,295 1,076 808 HMDS CMIC Oilwell 32
Slide 34: Key Ratios
Key Ratios Fixed Asset Net Debt/ equity (x) Turnover(x) 0.35 7.7 0.32 0.31 5.3 5.5 3.7 3.2 0.09 0.01 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 ROCE (%) ROE (%) 61% 49% 45% 49% 34% 35% 21% 19% 16% 15% FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 33
Slide 35: Utilisation of the Net IPO Proceeds
Utilisation of the Net IPO Proceeds Original Cost Utilisation Upto Unutilisation Amounts Particulars Revised Cost (as per Prospectus) 30-09-2022 as on 30-09-2022 Capital expenditure towards expansion of Manufacturing Facility 41.0 41.0 41.0 - Incremental working capital requirement 90.0 90.0 90.0 -
Slide 36: Thank You
Thank You Chemcon Speciality Chemicals Ltd. CIN – L24231GJ1988PLC011652 Mr. Rajesh Gandhi - CFO Email – rajesh@cscpl.com www.cscpl.com Strategic Growth Advisors Pvt. Ltd. CIN - U74140MH2010PTC204285 Mr. Shrikant Sangani / Ms. Pankti Majithia Email - shrikant.sangani@sgapl.net/ pankti.majithia@sgapl.
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