Jubilant Ingrevia Q3 2022 Concall Highlights

Operational Highlights

  •  Revenue grew by 44% on YoY basis, driven by growth across product segments to ₹1,286 in Q3FY22 from ₹893 in Q3FY21
  •  Revenue from Pharma, Nutrition and Agro end use increased significantly.
  • Most of the input cost is passed on resulting in better realisations
  • Dow Jones sustainability index is 81% for the company and ranked top 20 chemicals globally and top 3 in India 
  • Acetic acid prices were high due to china and supply constraints
  • The change in duty for acetic anhydride and methanol will benefit more to consumers then the manufacturers

Business strategy

  • Focus on debottlenecking on existing products
  • Acetic acid supply will be better at the end of quarter and prices are softening
  • Targeting to increase volume QoQ
  • 34 new products under pipeline and expected to launched in coming years
  • Might consider additional capex until next call
  • 55% of business is from the life science segment and 45% from speciality. Post capex as the revenue mix shifts more to speciality, margins expansion will be visible
  • If raw material prices stay high and continue at these levels, the revenue will be doubled earlier the FY26

Segmental Overview

Speciality chemicals

  • Revenues stood at ₹349 Cr contributing 27% to revenues with 21.8% EBITDA margins
  • Speciality Chemicals revenue grew by 22% YoY driven by volume growth across products and passing-on of higher input costs.
  • Pharma Sales share to total revenue grew to 52% from 47% earlier.

Health and Nutrition

  • Revenues stood at ₹216 Cr contributing 16% to revenues  with 24.4% EBITDA margins
  • Nutrition and Health Solutions revenue grew by 37% YoY driven by higher volumes and improved price realisation
  • Sales in vitamin B3 improved due to high realisations and volume growth
  • Revenue share from EU increased to 36% as against 20% last year and share from North America increased to 21% from 11% earlier.

Life sciences

  • Revenues stood at ₹722 Cr contributing 56% to revenues with 13.9% EBITDA margins
  • Life Sciences Chemical revenue grew by 60% YoY, driven by higher prices on account of favourable market conditions
  • High demand in European as well as domestic regions
  •  Life Sciences Chemical revenue growth was driven by higher prices of Ethyl Acetate and Acetic Anhydride

Capex 

  • Food Grade Acetic Acid. (expected by April to June 2022)  
  • CDMO GMP Facility at Bharuch. (expected by July to Sep 2022)  
  • Three Multi-Purpose plants of Speciality Chemicals. (expected by July to Sep 2022)  
  • Acetic Anhydride Plant. (expected by Jan to March 2023)  
  • Agro Actives Phase-1. (expected by Jan to March 2023).
  • Diketene plant is commissioned and demand is high in India as many consumers are importing. Few customers are waiting with order books
  • Capex is on course and expect to double the revenues in FY26 from FY20 mark
  • Committed investment worth Rs. 450 Crore for key growth capex is progressing well. At peak capacity these investments are expected to generate additional annual revenue of ₹ 900-₹1,000 Crore at prevailing prices.
  • Expected capex cash outflow for the year is expected to be in the range of ₹300 crore.  
  •  Gross Debt reduction by ₹263 Crore and Net Debt reduction by ₹201 Crore from 31st March 2021

Leave a Comment

Your email address will not be published. Required fields are marked *