Bodal Chemicals Limited (524370) Earnings Call Transcript
May 29, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the Bodal Chemicals Limited Q4 and FY '25 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Patel from Bodal Chemicals Limited. Thank you, and over to you, sir.
Thank you very much. Good afternoon, everybody. On behalf of Bodal Chemicals Limited, I extend a very warm welcome to everyone for joining us on the call today. On this call, we are joined by our CFO, Mr. Mayur Padhya. I hope everyone had an opportunity to go through the financial results and investor presentation, which have been uploaded on the stock exchange and our company's website. We will give you a quick overview of the company's performance, and then Mr. Mayur Padhya will walk you through the operational and financial performance in detail for the quarter. We are India's largest integrated manufacturer of dyestuff, Dye Intermediates and hold a meaningful market share in the world. We also have Basic Chemicals, caustic soda and recently new product group is added, Benzene downstream products. In today's environment where Indian suppliers are emerging as preferred partners globally, company has good opportunity to grow further in future. Before we discuss operational performance, there is important development with regards to our TCCA business. As a result of long efforts done by the company, finally, antidumping duty has been implemented since 7 March 2025 for the import of this product from China for 5 years. This will help us to turn around working of our TCCA business. Coming straight to the operational performance. During the Q4 FY '25, company achieved total revenue of INR 453 crores, a growth of 14% on a year-on-year basis. The absolute EBITDA stood at INR 50 crores, a 62% growth on a year-on-year basis. During the FY '25, total revenue stood at INR 1,757 crores, a growth of 24% year-on-year basis, and the absolute EBITDA stood at INR 171 crores, a 43% growth year-on-year basis. Improved volume and better realization are key to this growth. Interest, depreciation and other overheads have increased at the company level on capitalization of Saykha's benzene project. On the other hand, there was not much contribution by this project at the top line level during the year. Hence, the increased overhead offset partial profitability of the other divisions. During the quarter, our stand-alone profit after tax stood at INR 10.58 crores and consolidated profit after tax stood at INR 14.5 crores. For the FY '25, our stand-alone profit after tax stood at INR 19.57 crores and consolidated profit after tax stood at INR 18.5 crores. Coming to the Dye Intermediates business. During the quarter, Dye Intermediate business has performed better and almost in line with previous quarter. And for the FY '25 volume and realization both have improved. For FY '25, total revenue from Dye Intermediates were INR 667 crores. Revenue from Dye Intermediates grew by 36% year-on-year basis during the FY '25. In Q4, revenue from Dye Intermediates stood at INR 160 crores, in line with the year-on-year basis. In Q4 FY '25, as and sulfur prices were INR 508 and INR 255 per kg in Q4. Being an integrated Dyestuff manufacturer, we produce major Dye Intermediate products and about 40% of this Intermediate production is captively consumed, resulting in a cost advantage for our dyestuff products. The balance production of Dye Intermediates is served in both domestic as well as global markets. Considering the improvement in volume, we are hopeful this division will deliver good performance in the coming days. Coming to our Dyestuff. Revenue from Dyestuff stood at INR 498 crores, 6% year-on-year basis improvement in FY '25. In Q4, the revenue from Dyestuff stood at INR 125 crores, a growth of 6.5% year-on-year basis. We are expecting marginal improvement in operation of the division in coming days. Coming to Basic Chemicals, about 40% of our basic chemicals are captively used for Dye Intermediates. The revenue for the FY '25 stood at INR 92 crores has reported a growth of 11% year-on-year basis. The revenue from Basic Chemicals stood at INR 19 crores, a degrowth of 9% on a quarter-on-quarter basis, mainly due to a planned shutdown at sulfur product division in the month of February. Coming to Chlor Alkali. During the FY '25, Chlor Alkali business has reported a revenue of INR 335 crores, a growth of 25% on a year-on-year basis, led by the volume growth of 8% on a year-on-year basis. Q4 revenue from Chlor Alkali business stood at INR 91 crores, a growth of 34% year-on-year basis. During the year, caustic soda prices showed improvement, mainly driven by the increased demand. We are looking forward to a steady performance from this division. Coming to benzene derivatives. In Saykha's benzene derivative products project, company has started normal production with the required quality norms. However, due to stiff competition and slower demand, margin is still under pressure. This unit has started contributing to the top line in the Q4 '25. Contribution will further improve the top and bottom line by quarter-on-quarter basis. Coming to the subsidiary companies. Sener Boya is our wholly owned subsidiary company in Turkey, is experiencing hyperinflation. During the quarter Q4 FY '25 due to AS 29, there is INR 2.34 crores loss and the same is already a part of the declared result. Whereas in our Chinese and Indonesian subsidiaries, we have reported growth in revenue by 7% and 64%, respectively. During the Q4 FY '25, Bodal Chemical -- our domestic trading company has restarted trading business and expected to continue as per available opportunity basis. We have been moving up the value chain and working relentlessly towards diversifying the business from our core nitrogen dye chem business to other specialty chemical products like benzene derivatives. Long-term story of India remains intact and the chemical industry is poised to grow from here on. Thank you. And now I hand over the call to Mr. Mayur Padhya to walk you through the financial performance.
Good afternoon, everyone. The overall performance of the company has been satisfactory for the quarter gone. Our stand-alone performance for Q4 FY '25 is as follows. Total revenue for Q4 FY '25 stood at INR 448 crores. EBITDA stood at INR 52 crores in Q4 FY '25 with a margin of 11.6%. Net profit for the quarter stood at INR 10.58 crores. After 9 quarters, this time, company has crossed INR 10 crore net profit landmark. Our stand-alone performance for FY '25 is as follows. Total revenue for FY '25 stood at INR 1,733 crores. This is second highest turnover in the history of the company. EBITDA stood at INR 176 crores in FY '25. Net profit stood at INR 19.58 crores. Our consolidated performance for Q4 FY '25 is as follows. Total revenue stood at INR 453 crores. EBITDA stood at INR 50 crores for Q4 FY '25 with a margin of 10.9%. Net profit for the quarter stood at INR 14.5 crores for Q4 FY '25. Our consolidated performance for FY '25 are as follows. The total revenue stood at INR 1,757 crores for FY '25 against INR 1,419 crores for FY '24. growth of 24%. EBITDA stood at INR 171 crores in FY '25 against INR 119 crores for FY '24, growth of 43%. Net profit for FY '25 stood at INR 18.5 crores against net profit of INR 6.47 crores in FY '24, a growth of 186%. Division-wise performance on a consolidated basis for the FY '25 are as follows. Dye Intermediates revenue stood at INR 667 crores, Dyestuff at INR 498 crores, Basic Chemical at INR 92 crores, Chlor Alkali, INR 335 crores. Total production volume on stand-alone for FY '25 are as follows. Dye Intermediates reported 30,432 metric tonnes. Dyestuff reported 15,921 metric tonnes; Basic Chemical stood at 2,07,994 metric tonnes and Chlor Alkali stood at 85,501 metric tonnes. With this, I conclude the presentation and open the floor for question and answer.
[Operator Instructions] The first question is from the line of Aditya Khetan from SMIFS Institutional Equities.
Sir, my first question is on to the benzene derivatives. So what would be the volume figure for this quarter?
Yes. It's 1,700 metric tonnes -- 2,700 metric tonnes.
27% metric -- that is on average is about 30% utilization. But in the month of April and now in the current month, we have crossed that, taken up to about 45%. So we are targeting immediately about 50% to 60% in this coming couple of months. And going ahead, we want to go up to 80%, which is the optimum level.
Okay. Yes, sir. Sir, on to the -- when we look at the Dye Intermediates, definitely, sir, on a Y-o-Y basis for FY '25, the volumes have been quite good. Sir, what is our outlook like for the next 2 years? Would we continue to see volume growth of 10%, 15% backed by good demand from the end user? And similarly for the Dyestuff also, sir.
In Dye Intermediates, the last quarter and the previous quarter, so Q3 and Q4, they have remained almost flat, but they were also at a very good utilization level, more than 70% plus. So they will remain flat for the FY '27 also.
Okay. So sir, the volume pickup would be largely from benzene derivatives and from the Dyestuff?
Yes. Dyestuff does have about 10% to 15% improvement potential from the FY '25 numbers. So Dyestuff can be seen about 10% improvement in FY '26. Intermediates will be flat. Yes, benzene derivatives only had in the latest quarter, about 25%, 30%. So there, we will definitely see, I think for the whole year, we should see at least 60% to 70% utilization.
Got it. Got it. And sir, like every quarter, sir, we are reporting some sort of losses from the -- into our subsidiary from that hyperinflationary economy, which we have seen. This quarter also, sir, somewhere around INR 2.3 crores impact has been there. Sir, till what quarter we would continue to see this loss arising from subsidiary?
So it is difficult to say. But the good point is that the currency devaluation over there has now minimum since last several quarters. So slowly and gradually, inflation should also come into controllable figures. But it's difficult to say upfront that since when -- by when there will be a stop in this inflation accounting.
Sir, we do not hedge this sort of currency fluctuations into our Turkey business?
No, no. Currency is fully hedged. This is something -- as per accounting standard, we are required to pass a book entry. This has nothing to do with a cash loss or something like that. It's a separate accounting standard wherein any economy has a hyperinflation. Over there, we are required to give a special accounting treatment. So in India, we have not experienced such thing any time. So we are not aware. But there are certain countries like Turkey, Argentina, where inflation has been very high. So over there, this accounting is to be done.
Okay. Okay. Sir, during the quarter, like we had a tax credit. Any sir, idea you can give like how would be the tax rate for '26-'27 and the reason for this tax credit in this quarter?
Our '26-'27 tax will be in the range of 22% or something like that, maybe lower than that because we have a carryforward depreciation balance available because as per income tax, higher depreciation is required to be passed. And as per company's law, depreciation is lower. As far as this time, this effect is because of Turkish company only. So over there, they are required to pass this entry considering this loss of inflation. So that's why this effect is there. Otherwise, we are not expecting much effect.
Got it. Got it. Sir, on to the caustic soda, sir, are we targeting full utilization in '26 only? And how is the outlook on the end user industry?
So caustic soda, the utilization is almost, I would say, to the maximum levels. There is a slight possibility about 5% to 10% growth coming from that area also. And the overall margins were very consistent and strong in the FY '25. Going ahead, because caustic soda has a wide number of products and also the application also is into a few different industries. The overall demand remains strong. Currently also, it is going decent. So for FY '26, we forecast that it will remain slightly better in terms of top line and the margin number should also remain like FY '25.
Got it. Sir, just one last question. Sir, like with the ramping up of benzene derivatives, improvement in caustic and Dyestuff, sir, we maintain our earlier guidance of revenue, which we had given from benzene derivatives. And from margins also, sir, from the current levels of 10%, where you see like for the next 2 years with ramp-up in all the businesses, where it could be?
For the FY '26, we are targeting INR 1,900 crores plus top line in a normal pricing scenario. And so that's about 10% growth. Also, I think the numbers that we achieved in FY '25 in the Q4, about 10.5%, 11% EBITDA margin. I think that should definitely be -- we should be able to maintain that. In fact, we can improve them with a better performance coming from benzene derivatives business. So I think the target is about INR 1,900 crores plus top line and about 11% to 12% EBITDA levels in the normal scenario.
Got it. Sir, just one last bookkeeping question. Sir, what would be the -- you had mentioned in your presentation, the prices for vinyl sulphone and H acid. I missed the thing. Can you please repeat on that?
It's INR 508 for H acid and INR 255 for vinyl sulphone.
We'll take the next question from the line of [ Sandesh Raghav ] from Simplex Growth Ventures.
My question is what is the production figure in metrics tonnes for TCCA and [indiscernible] after the antidumping duty notification was issued.
Yes. Antidumping duty has been implemented in the month of March, 7 March '25. And for the quarter, we are not being benefited because it's implemented at the year-end only. And there are several traders who have imported in a good quantity this product in anticipation of antidumping duty. So recently, we are not getting any benefit. But down the line, within 3, 4 months, when this imported stock get exhausted, we will get benefit. So production level was very normal, but earlier it was -- so nothing much to say in this regard. Exact number is not with me. You can check later on directly with me.
What is the projected or expected production for TCCA 90 for the quarters in financial year 2025, '26?
'25-'26, we are expecting about 4,000 metric tonnes at least production for the current year. And thereafter, it may increase, say, 10%, 15% in next year.
Okay. And my last question is, are you selling TCCA 90 directly to consumers or we have developed dealership network?
No, we are directly selling to consumer. We have not prepared any dealer distributor network at present, but we are working on that.
We'll take the next question from the line of [ Vignesh Iyer ] from [ Sequent Investments ].
So first question, I wanted to know, if I am not wrong, you said earlier that our sulfuric acid plant, we had taken shutdown, right? Sir, what time period was that?
It was about 20 days. It's an annual shutdown. We are required to shut the plant for government's boiler inspection and some maintenance work.
Okay. Okay. And sir, can you share the metric on your sulfur pricing in quarter 3, quarter 4? And what it is right now, I mean, around the month of May, if you could share the pricing?
Q3 and Q4, the sulfur prices have been very, very high. Since Q3, the prices started increasing. It's in the very abnormal level at the moment also. So Q3, the average could be somewhere around INR 18,000 to INR 20,000 a tonne. Q4, the average is around INR 25,000, INR 27,000 a tonne on an average. So it's a very, very high cycle. Prices like this don't happen for a few years, I would say. Like I have seen this kind of prices only a couple of times in the last 15 years. But the good thing is that the demand from overall consumer side for the sulfuric acid and derivative products have been decent, have been strong. So this increase in the raw material prices, we are able to pass it on towards our finished good prices. So our margins are coming quite decent from the sulfur-based products also. And going ahead, currently also, the price of sulfur is around INR 27,000, INR 28,000 levels. But at the same time, again, the finished good prices of sulfuric acid and derivatives, they are also quite high, and we are able to pass on the raw material increase.
Sir, are we seeing any lag when it comes to pricing in sulfuric acid per se? I mean -- or is it in the tandem -- has been in tandem with sulfur?
It is usually in the tandem with sulfur. So because of -- like I said, higher prices of sulfur resulting in the higher prices of sulfuric acid. So that has been the trend. And majority of the production comes from sulfur-based production of sulfuric acid. So there is no choice for the consumers and to pass on the increase. And so sulfur works on international pricing. So then there are no imports of sulfuric acid. So Indian business of sulfuric acid is quite protected and because of the raw materials linked to the international prices, so prices just follow. And the global sulfuric acid prices remain within similar ranges.
So our booking of sulfur has been on a spot rate or is that -- has it been on a contract basis? How has the procurement been for sulfur?
We have an annual contract with Reliance since a few years and most of our quantity is covered in the contract. So we don't do any spot booking. And because of our large consumption of sulfur, we definitely have one of the best rates of sulfur coming from the contract with Reliance.
Sir, annual contract for the volume, but not the price, right? Price would be a spot, right, spot basis?
Price would be -- every 15 days, the price changes depending on the global prices.
Okay. So just one last question from my side. Like what you gave for sulfur, can you give for sulfuric acid what the prices for quarter 3, quarter 4 and May?
Quarter 3, the prices were around INR 8,000 a tonne. For quarter 4, the price was around average, I would say, about INR 13,000 a tonne. Currently, the prices are in the range of INR 12,000 to INR 13,000 a tonne.
[Operator Instructions] We'll take the next question from the line of [ Prit Nagersheth ] from [ Wealth Advisors ].
My question is regarding the change in BIS for some of the products. I think [ BHS ], [ KS ] and vinyl sulphone. I think those have been moved to some in August and some next year. How does this impact your planning or your expectations from these because of the change in BIS?
See, BIS was coming as an additional benefit for us. And presently, government has deferred it for 3 months. So after 3 months, they will once again review and decide whether to implement it or not. So this is something -- another positive thing which is going to come to this industry, but that has been deferred. So there is no impact as such in the industry or in the company. Before getting implemented, it has been deferred. So there is no effect.
Right. But in terms of price trends, because if BIS had come, the price trends would have inched higher. So how are you seeing that given that it has deferred and it may get further deferred? So how does that affect the pricing of those products for you?
See, the prices may go down for temporarily because some psychological benefit or psychological effect is there. So that effect will have for 10, 15 days, then once again, it will stabilize as per industry demand and supply. So we don't see much impact as such.
Regarding industry demand and supply, how do you see the trend for these products for FY '26?
FY '26 is a good -- see, earlier 2 years, we have phase that supply was more and demand was lesser. But presently, it's matching demand and supply. So that's why the good prices has stabilized and continued since last about 8 months or so. Temporary situations are there, but more or less, it has stabilized.
And do you see any volume pickup in these products?
Yes. Volume has already picked up since last 3 quarters, which you can see from our presentation data that our intermediate utilization is very good. So that will continue.
Okay. Any guidance for utilization for FY '26?
'26, yes, it will remain similar for dye intermediate. Some improvement is possible still in caustic. Some improvement is possible in Dyestuff also. Basic Chemicals will remain more or less same level and good improvement will be there in our benzene downstream product.
And also the TCCA part, which has not too much of contribution in FY '25, I think that will have a contribution of around 4,000 tonnes. So about INR 70 crores of top line should come from there and with a better margins. That's also additional.
We'll take the next question from the line of Shantanu Basu from SMIFS Limited.
Can you hear me?
Yes, please continue.
Yes. So most of the questions were asked by my colleague, Aditya Khetan, but I just have a few more. So firstly, with regard to the subsidy, can you please tell me through how much subsidy was received in FY '25? And going forward for the next 5 years, how much do you expect to receive? That's my first question.
Yes. Subsidy, we have not yet received from Punjab government, which we were anticipating. So that is lying with the final stage that is state level committee, they say it. And we are expecting that next month, that committee will be there and our case will be considered in that committee. As far as value is concerned, almost INR 49 crores of amount has accrued till March '25, out of which we have already recorded INR 3 crores of SGST. Balance, we have yet not accounted for. So once it is approved by state-level committee, then only we will review with the auditor and then consider. So as far as cash flow is concerned, we are expecting about INR 40 crores at least should be there -- should come to company as a cash flow considering present situation. And this will be there for 7 years. So next 7 years, we are expecting about INR 20 crores of subsidy every year from Punjab government and another about INR 4 crores from Gujarat government for our Saykha's benzene product -- project.
So sir, if I understood correctly, FY '26, you would receive INR 40 crores of subsidy expectedly?
Yes, cash flow. This is what we -- yes, estimate.
And for the next 6 years, that is after FY '27 -- after FY '26, the next 6 years, you are expecting INR 20 crores plus INR 4 crores, that is INR 24 crores, every year?
Every year, correct.
Okay. So that solves one thing. And then the next question is, sir, with respect to benzene. I mean your presentation mentioned and Ankit bhai also talked about it, that you faced competition and there was a slow demand situation. So with regard to the competition, sir, are you -- were you trying to imply that you face competition from China because domestic players are limited, right? It's you and it's RP, right? Or how is it?
Domestically, other than RP, there is another very good sizable player called Pushkar Chemicals. Another player, Meghmani is also there. We are the fourth player. But also at the same time, there are imports -- Chinese imports that come in. And I think the problem is coming from the consumer side, where the largest consumption comes from the paracetamol industry, where the utilization in that industry is around 50% at the moment. So overall, global demand of paracetamol has been down since a couple of years, and they have slightly improved in the last 1 or 2 months, but yet not about -- not even crossing about 50% levels. So that is, I think, where the main problem is. I think when the paracetamol consumption normalizes, I think that then it should be a quite normal scenario for us also, and we can also reach the optimum 80% level of consumption utilization.
So Ankit bhai, it's more to do with paracetamol, right, and not competition per se? It's more to do with slow demand in the paracetamol sector, right?
Yes, it is the slow demand from the main consumer side.
Main consumer side, okay. And demand scenario remains -- I mean, sorry, the competitive scenario and the revenue projections, what we have stated or what we imply 80% capacity utilization, once the capacity situation improves, we can get there, right, to 80% capacity utilization, right?
Yes, yes, absolutely, yes.
Okay. Good to know that, sir. And the next question is with regard to Turkey. I mean this is, again, with regard to the recent Operation Sindoor that happened and Turkey's support of Pakistan and all. So there's a concern that -- and you must have reports as well that some Turkish players, particularly the airport sector was facing some sort of scrutiny and closure of business. So although our subsidiary is more of a trading and marketing subsidiary over there. So I just want to understand if suppose -- I mean, in the remotest circumstances, if suppose there is an action or something similar how would that affect our Turkish business or the businesses of the areas that Turkish subsidiary caters to? Can that be done directly by us? Would it be -- I mean, would it be difficult to close the subsidiary? Just your color on that, sir? I know this is hypothetical, but any impact?
See, since last about 2 years or so, average volume, what we export to Turkish subsidiary from India is monthly about 60 metric tonnes. So it's not a significant figure as far as our turnover is concerned. Second thing, if we close down the subsidiary, we can definitely directly export this material to their directly. And third thing, as far as closing down of the subsidiary, we have not reviewed that situation, but it's a very small staff of about 8%, 9%, and there is no asset as such in the company's name, whatever office and some blending unit what we are operating is on rent. So it's very easy to close down the activity because there is no date as such there, no other committed investment in property, et cetera. So it's very easy to close down the company.
Okay, sir. And sir, the Turkey subsidiary, does it cover only the Turkey market or other parts of the European market as well? So just want to understand that, sir.
Yes. It's served to Turkey as well as Uzbekistan, which is nearby Turkey. We had a plan to sell it to nearby other countries also, but that wouldn't be materialized. So presently, only Turkey and Uzbekistan. These 2 countries are being served from there.
And would my assumption be correct if I say that it's mostly caters to the textile segment?
Yes, mainly textile segment. Leather and paper are also there, but major but major part is going to textile.
And sir, lastly, if you can give me a color on the pricing situation of the broad product segment, that is Dyestuff, Dye Intermediates, Basic Chemicals, benzene and other businesses. Just want to understand the pricing situation currently vis-a-vis FY '25 closing and FY '24? And how do you foresee it for the next 2 years, I mean, or maybe for the next FY '26? Just broad color in terms of pricing.
See, prices are more or less similar what they were prevailing in Q4. Considering the present scenario, whatever we see the demand-supply situation, et cetera, we see that this should continue in near future. For next year, it is very difficult to say at present. But looking to the circumstances, it should be in this range only. There shouldn't be much effect positive or negative with the pricing.
Okay. So pricing should be more or less stable, is that what you are implying?
Yes, obviously. Correct.
Okay. And sir, any -- I mean, I have -- I mean, the questions do come up. So sorry for asking one more. So with regard to the benzene, sir, any thoughts on immediate entry into other derivatives? Or are you satisfied with the 4, 5 derivatives that you have?
As of now, we are planning to remain in the same product mix because of 2 reasons. The focus was on the utilization levels. Second is we already have some consumptions internally in the product mix. And third is that we don't plan to do any major CapEx at the moment. So we are planning to reduce our long-term debt. So the focus for the FY '26 is definitely that. So you will not see any major CapEx as of now. And the focus for this year will definitely be to increase the utilization and bring down losses if there are any and improve the margins.
Right. And once you achieve that 80% utilization, then maybe you will take a call for the CapEx and for the derivatives?
Yes, we can do that. We also have other opportunities. So we will see whenever we are ready with our debt-to-equity ratios and our overall debt situation, then we can -- we are looking at something to do in the following year.
Right. And that would be FY '27 possibly or maybe later?
Anything sizable would be -- can happen in FY '27 or beyond. For FY '27, like I said, we already have a room to improve by about 15% to 20%. So the focus is definitely on that side. We want to stabilize all the businesses like TCCA, which has now good turnaround possibility. benzene, which we need to take the utilization up to about 80%. So I think for this year, we do have a good scenario, good platform set for a 15%, 20% growth and to stable out a couple of the good opportunities like benzene and the TCCA. And then following year, while our debt will also be reduced again, I think then we can look at a good size investment. And then a follow-up beyond that, maybe we can look at something a little larger also.
We'll take the next question from the line of [ Ankur Agarwal ] from [ RC Business House ].
What is the peak top line with present capacity possible?
Present capacity and present pricing, we can do a top line of about INR 1,950 crores to INR 2,000 crores.
With the 80% capacity [indiscernible].
Yes. It's a division-wise different. But more or less, average, you can consider that.
Then we have to take more CapEx for the further expansion if required?
Yes. Thereafter, CapEx will be required.
Okay. And what is the debt reduction program?
See, current year, we are targeting to reduce debt. There is a scheduled repayment of about -- not about, it's INR 120 crores. And addition to that, we are planning to pay by land sale, et cetera. So another INR 20 crores can be paid further. So INR 120 crores to INR 150 crores debt will be reduced during current year.
What is the blended interest on the present debt?
It's about 9.25%.
We'll take the next question from the line of [ S.K. Damani ] from [ SKD Consultants ].
Sir, am I audible?
Yes.
Sir, actually, I am a bit late because I was not able to connect the line in time. So I mean, can you give us a broad picture of all our products, Basic Chemicals, intermediates and final products? I know usually the dye chemical industry is not passing through a good phase. But certain chemicals, is there -- if you can kindly highlight which of the chemicals are having good prospects, which can contribute in coming times in this year. Can you kindly?
If you look at of Q3 and Q4 and compared to the previous few quarters before that, there you can see improvement in the volume, improvement in the top line, improvement in the bottom line. The trend continues for us because we do have a good product mix. We don't only depend on Dyestuff industry or dye intermediate industry. But there also, we have good signs recently where Dye intermediate industry has been doing decent. Dyestuff was a little down last year, but that is also now back with better volumes, and it can still even grow further. Our integrated business model in the Dyestuff industry helps us to perform better than some of the industry players. So yes, you are right that the Dyestuff industry has been a little challenging in the last few quarters. But because of the integration, we are doing a little better compared to the overall industry performance. So that is there. Our Chlor Alkali also contributes a good numbers in terms of top line. Also, the margins have been quite decent and strong there. So going ahead also there, we expect a little bit of growth in top line with a solid bottom line numbers. And our Basic Chemicals, because we have not added any capacity, that will more likely remain stable and flat in the line of FY '25 numbers. There also, the volumes are good. The demand comes from different segments. So the margins are also good there. And the one -- another good thing is that TCCA, our volumes have been very, very small because of Chinese imports in India and not very regular business to exports. But now because of the antidumping for 5 years, that also will add a very decent number in terms of top line. And more importantly, we should do good EBITDA levels from there also. So that -- which was hardly there in the last few years. So overall, we do have -- and the last one, the latest on the benzene derivatives, where again, the Q4 utilization was only about 25%, 30%. It's now already looking at about 40% to 50%. Because of the large CapEx, large plant, there are lots of overheads, which we had to -- which the other divisions had to take care of in the FY '25. But going ahead, already the scenario is improving a little bit with the higher utilization numbers. And going ahead, we are targeting for the year minimum 60% to 65% plus levels. So with that, I feel that the negative impact that business had on overall numbers, that will also be a better. So the forecast that we are talking about is about INR 1,900 crores plus top line, which is about 10% growth. And our Q4 EBITDA numbers are almost 11%. So we are definitely looking at that at minimum levels with the addition of TCCA bottom line -- top line as well as improvement in the benzene and other businesses because of the integration and Chlor Alkali doing quite decent. I think we are looking at about INR 1,900 crores to INR 2,000 crores of top line with even better EBITDA than Q4. That's how the current business is going on and the coming year looks like for us.
And my second question is that we have a caustic chlorine unit in Rajpura, Punjab. So are we implementing agro waste as our fuel to save electricity costs? Because in that area, many of the paper industries have reduced their costs because of using these agro waste and a lot of things. So we must have oriented. And second is how we are orienting ourselves to utilize our chlorine there for our finished products of dyes or intermediates or something like that, so that, that unit also becomes very, very positive in the company?
Yes. So very, very important questions in terms of environment and in terms of chlorine consumption, which is a little challenge in the Chlor Alkali industry. Since we took over, we bought new boilers. And for our entire steam utilization, we are using either captive hydrogen. And majority, we are -- majority of the energy comes from agro waste. So we are definitely not buying any fuels, any petroleum products to do that. But the good thing for us is in Punjab, the electricity rates for us are very good because we are a large consuming electricity consumer. We have a special subsidized rates. So the rates are actually, in fact, very good for us. And for the steam part, we are using entirely hydrogen or agro waste. So that changes we have made. I think so we are doing the best possible efforts there. And second, chlorine utilization, I think we are definitely one of the units in the country, which has the least problem in disposing the chlorine. The reason is there are already 5 pipeline buyers. And in the recent -- in the FY '25, a [ sixth ] pipeline chlorine consumer was also added. We also have captive consumption of chlorine in a couple of our plants within the same Rajpura complex. So we have a very comfortable scenario as far as the chlorine consumption goes, where again, in the industry that chlorine consumption of chlorine disposal is a problem. So we are very comfortable. And we are also already planning a couple of more chlorine line consumers in neighboring areas.
Very nice, sir. And are we thinking of expanding that unit also, adding more caustic chlorine lines?
We are looking at -- there are a couple of possibilities. One is a small expansion, which can happen within the same plant, which is not a large CapEx. So that we can plan any time. We are looking at that. Because it is a brownfield, I think the return numbers are also very, very good. And the North demand is also quite stable. Also, we are working on a future possibility, not this year. We don't want to dive into any large CapEx cycle. But beyond that, we are definitely working on expanding it. So that will come down the line, but not this year. But it's a great opportunity because the business is doing good for us. The North region is also -- it's quite satisfactory overall. So yes, that you will see that coming, but not this year.
Right sir. It is all your very good management that you have turned around that unit so nicely. So congratulations and all the best from my side.
Next question is from the line of Aditya Khetan from SMIFS Institutional Equities.
Sir, in this quarter, we had taken a shutdown into the base chemical business, and we had witnessed that there is a good amount of volume drop. So ideally, our Dye Intermediates volume should also have been lower, like because it is forward integrated. But there, sir, like the volumes are largely flattish. So have we imported some of the raw materials in this quarter to maintain the volumes of Dye Intermediates?
That is the usual scenario. See, this shutdown comes every year for us because of the mandatory requirement from the boiler department. So we do have large storage facilities as well as we buy from the local markets. So the Basic Chemicals that we produce from the plant that was shut down, that are widely available from the Indian markets only. So whenever we need some extra product, we just buy from the market. So we don't let that disturb our Dye Intermediate numbers.
Okay. Okay. And sir, like I believe with -- so benzene derivatives, currently, it is not contributing to EBITDA. At what point or at what level do you think like it will start contributing to EBITDA?
We feel that the utilization of around 65%, 70%, I think that can bring us to some positive EBITDA numbers. And I think improvement in the pricing of around 8% to 10%, that is definitely a level I think we can reach breakeven or more positive contribution in the EBITDA. So we are not too far from it. With the increased utilization, I think it will bring down a lot of the overhead cost. And just a slight improvement in the finished good prices can definitely put us in positive.
Okay. Okay. And sir, this benzene derivatives, the caustic Dyestuff, I think all will reach a peak utilization level in the next year time frame only. And we have not outlined any sort of debottlenecking or any sort of improvement in capacity. So how do we plan for FY '27 and '28 when we have no CapEx outlined right now?
So for FY '27, I mentioned about the improvement from the Chlor Alkali, which can come about 10%. We are also looking at a very small expansion, which is more of a debottlenecking of the plant of Chlor Alkali. So there also, we can add another 10%. So we can add about another INR 60 crores, INR 70 crores from the current numbers on an annual basis in Chlor Alkali. We can -- I think we are also looking at TCCA where the utilization for this year because we will not get the entire year's benefit, it will be about 60%, 70%. So going ahead, there also about INR 20 crores, INR 30 crores of top line can be added for FY '27. So these are the 2 areas. And again, like what we are targeting for this year, benzene, the utilization average we are targeting is about 60% plus. So there also, if we can take it up to 80% in FY '27, so that again is about INR 50 crores, INR 60 crores. So put together of these 3 divisions, I think we can add another about INR 120 crores to INR 150 crores of additional top line in FY '27. So again, from, let's say, INR 1,950 crores, another maybe 7%, 8% can be added in the FY '27 also. And by that time, we are looking at some more CapEx, which can happen in the year of FY '27. So again, that can fuel to the growth of FY '28 and beyond.
Got it. And sir, the debottlenecking in caustic chlorine you have mentioned. How much, sir, we are planning like on the base capacity? Was it 10%, 15%? And what would be the CapEx for it?
We are working on that right now. But the current numbers, we are targeting 10% to 15% capacity addition and the investment is less than INR 10 crores.
Got it. Sir, just one last question, sir, what would be the contribution of TCCA in FY '25? And what is the pricing like pre-antidumping duty and now with this duty, how much prices have increased, if you can highlight on that?
See, TCCA prices earlier imported at about $1 or even below $1. And locally, they were able to sell INR 110 per kg or so. But now after implementation of antidumping duty, it has moved to INR 160-plus level. So there is a good improvement as far as prevailing prices are concerned. And contribution from TCCA in FY '25 was negligible, INR 7 crores, INR 8 crores were there. So whatever additional production we will be able to do, that will directly add to top line of the company. I hope I have covered all your point.
Thank you. Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments.
Yes. With this, we conclude the call and would like to thank everyone for joining us today on this earnings call. If you have any further queries, you can connect with us. Thank you.
On behalf of Bodal Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
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