Thread by @drprashantmish6

Chemcon- CMP 455
HMDS is required for semiconductors

PLI for Penicillin G is a growth opportunity for Chemcon

Promotors holding around74.4%
Debt free
Good ROE and ROCE
-Their manufacturing facility is located at Manjusar near Vadodara in Gujarat and currently has 7 operational plants
-company is in manufacturer of oilfield chemicals,HMDS and CMIC

1-Oil field chemicals- Calcium Bromide, Zinc Bromide, Sodium Bromide,
Mainly used for completion fluids in the Oilfields Industry also known as Oilwell completion chemical.

These bromides are generally used in new Oil Well projects. Chemcon is only manufacturers of Zinc Bromide and largest manufacturers of Calcium Bromide in India in terms of production

2- HMDS--( 51% of total revenue)
Only manufacturers of HMDS in India and third largest manufacturer of HMDS in the world.
HMDS is Pharmaceuticals chemicals
capacity-4200 TPA
High Purity HMDS- Trial run is going on
Capacity of High purity HMDS 600TPA

High Purity HMDS used for semiconductor industry and in vinyl silicone rubber to improve their tearing strength )(According to @HarshaApril it gives bridge between organic to inorganic molecules ( surface of silicon wafers and photoresist) HMDS provide hydrophobic coating

to repel water from surface
Another interesting development for HMDS is Recent PLI -Till now Penicillin G was imported from China for most of the volumes and India was not manufacturing that.

Now in PLI scheme Aurobindo has got approvals on that, Aurobindo may be coming up with Penicillin G, so that will add on the volumes of the final products that is Penicillin G based antibiotic and chemcon will get benefit.

3-2-CMIC ( Chloromethyl Isopropyl Carbonate) which are mostly used in pharmaceuticals industry
CMIC is an antiviral drug intermediate product which is a key intermediate for the HIV and anti-hepatitis B drug -Tenofovir

-largest manufacturers of CMIC in India ( Others Are Paushak and Anshul Chemicals)
-second largest in the world
-36% of Total revenue
Capacity -1800TPA

-new addition in chemical businesses
4--4-chlorobutyryl chloride have been successfully commercialized and have started contributing to the topline ,4 CBC is widely used in the pharmaceutical and agrochemical industry in the preparation of Pyrazinamide,

Pyrazinamide is a medication used to treat tuberculosis. It is also used for weed control in maize and sugarcane
Demand of 4-chlorobutyryl chloride is around 8,000 tons per year and capcity of chemcon is 1200 TPA, there are many other manufacturers also .

5- 2,5 DHT is predominately used in the pharmaceutical industry in the preparation of and synthesis of substituted tetrahydrothiophene derivatives 2-amino-3-(arylsulfonyl) thiophenes, potential antiviral and antitumor agents,its KSM for Lamivudine ( Key ANTI HIV drug) .

DHT demand 2500 TPA and capacity of Chemcon is 600 TPA ( Only manufacturuer in india
Capex is going on for The two plants ( Pharma intermediate chemicals)and both capex will be completed in next 6-12 months .

Risk -
High debtor days
cases against promotors for insider trading by sebi and criminal cases by CBI .

I like the vision of Promotors

Chemcon Concall updates
1-financial year 2021, HMDS has contributed nearly 50% of our total revenue of which
more than 84% of revenues is being contributed from the domestic market and around 15%
to 16% has been contributed from the exports.

2-The other product CMIC,
it is an antiviral drug intermediate product which is the key intermediate for an anti-AIDS
or anti-hepatitis B drug that is Tenofovir. Demand for this product has been very strong
throughout the year.

company registered a production volume of 1800 metric tonnes with
revenue of 84 Crores contributing around 35% in the financial year 2021. Split between the
domestic market and export market has been almost equal for this product

3- bromides are generally used in oilwell project. This segment has
shown some revival in the last few months of H2 FY2021, but overall the business has been
soft with mere Rs.31 Crores contributing 13% of total business.

4-4 CBC -commercialized this product and contributed small revenue of Rs.3
Crores in the financial year
5-2,5 DHT is predominately used in pharmaceutical
industry in the preparation of potential antiviral and antitumor agents. It is the key starting
material for Lamivudine.

Company is in the process of commencing the productions of 2,5
DHT( You must have heard TLD 400 in laurus concall , L stands for Lamivudine )

6- enhancing manufacturing capabilities of pharma
intermediate chemicals within the same premises the extended premises by way of putting
up a new plant, plant #8 and plant #9,

- expect both these units to commence their productions by Q2 FY2022 and
Q3 FY2022 respectively. Products added in these two units will be a mix of new as well as
old products
7- ROCE and ROE
stood at 21% and 16% respectively. Our debt-to-equity ratio stood at 0.01.

8-In respect to further
capex they have enough land for the plant 10 and 11
9-company feels that internal accruals and the cash
accruals which the company is able to generate should be enough to take care for the next
couple of years for the expansion

10-the requirement of domestic countries is 5000 tons as demand for HMDS is
concern they are able to produce about 3000 tons of volumes. There is still a gap of about
2000 tons under import

11-Post commissioning of P8 CMIC capacity will be 3000tpa ( currently 1800 tpa)
12- High purity HMDS-Domestically company do not have any competitor but have couple of international competitors
like Shin-Etsu, Wacker Chemie, and a Chinese company

HMDS-Gyan on HMDS
1-it can be used to produce antibiotics drugs (Cefomycin, Amikacin, and Penicillin etc.), cardiovascular drugs (Rosuvastatin, Atorvastatin Calcium etc.) and nucleoside drugs (Lamivudine, Sofosbuvir, Zidovudine, Cytarabine, Capecitabine, and Fluorouracil)

2-Furthermore, the other major growth drivers for hexamethyldisilazane market are the wide application areas such as organic synthesis, surface treatment, and semiconductors.

3-In case of electronics industry, it is used in manufacturing of coatings, tailing agents, rubbers or as a semiconductor. It is also used as an adhesive and sealant in automotive care products.

4-For surface treatment application, it can be used to modify the surface of white carbon black powder, diatomaceous earth powder to improve hydrophobicity, reinforcement, tear resistance.

5-For lithium battery electrolyte application, it can improve the electrochemical and cycling performance of lithium-ion battery. With high volatility and low impurity residue, HMDS can be used as anti-corrosion adhesion assistant agent

for electronic cleaning agent, semiconductor photoresist and positive photoresist.

major manufacturers of HMDS
DuPont, Shin-Etsu, Wacker Chemie, Evonik Industries, Chemcon Speciality Chemicals Limited and BRB International BV.

#Chemcon Sp,-Average results - ( Disclosure Invested)

Chemcon sp.
1-In Q1FY22, HMDS business was impacted due to maintenance work at P7 Unit where
we are doing backward integration with our P8 Unit for our key raw material
Trimethylchlorosilane (TMCS).

Handling these chemicals requires a high degree of
technical skill & expertise and therefore the production will be lower in Q2FY22 due to
integration process, inspection, and trial run. We expect HMDS business to operate at
optimum level from Q3FY22 onwards.

2-Our P8 & P9 units are likely to commence production in Q3FY22 due to late delivery of
materials & equipment. This expansion will increase our capacities & strengthen our
product portfolio of pharma chemicals.

3-Clients

Products overview

Significant capacity addition after expansion .