Fineotex Chemicl (FCL) conducted their concall for Q2 FY 22
Here are the conference call highlights ππ§΅
Here are the conference call highlights ππ§΅
Business Update:
β’ Process of initiating the production (started on Nov 9) at Ambernath plant in Mumbai.
β’ Entered a strategic partnership with a Belgium-based co. in the textile chemicals (Eurodye-CTC).
β’ Got licensed from Hohenstein which will llow FCL's product in US.
β’ Process of initiating the production (started on Nov 9) at Ambernath plant in Mumbai.
β’ Entered a strategic partnership with a Belgium-based co. in the textile chemicals (Eurodye-CTC).
β’ Got licensed from Hohenstein which will llow FCL's product in US.
Eurodye-CTC:
β’ Eurodye-CTC is strong with their product for cotton, synthetic wool, fiber, fabric.
β’ They already have customer in India, which will help increasing business product of FCL.
β’ Current focus with CTC remain Sri Lanka & further expand in different geographies.
β’ Eurodye-CTC is strong with their product for cotton, synthetic wool, fiber, fabric.
β’ They already have customer in India, which will help increasing business product of FCL.
β’ Current focus with CTC remain Sri Lanka & further expand in different geographies.
Cleaning and Hygienic segment:
β’ Recruited 15 marketing people, & have >30 distributors.
β’ FCL has 41 products in the pipeline. Co. is currently focusing on institutions where packing sizes 5 liter.
β’ Earlier as hotels & multiplex were not opened up so there were issue.
β’ Recruited 15 marketing people, & have >30 distributors.
β’ FCL has 41 products in the pipeline. Co. is currently focusing on institutions where packing sizes 5 liter.
β’ Earlier as hotels & multiplex were not opened up so there were issue.
FCL's Product Edge:
β’ Total cost of pre-treatment dyeing, printing, finishing, which has 25 different functional chemicals contribute only 3% cost to the user.
β’ Mgmt expect Eurodye to contribute same kind of EBIDTA as of FCL (18-20%).
β’ Total cost of pre-treatment dyeing, printing, finishing, which has 25 different functional chemicals contribute only 3% cost to the user.
β’ Mgmt expect Eurodye to contribute same kind of EBIDTA as of FCL (18-20%).
Diversification:
β’ Top-10 customers are contributing only 30% of revenue (which was 33% in Q1).
β’ Top-10 products contributes 20% of sales.
β’ Top-10 customers are contributing only 30% of revenue (which was 33% in Q1).
β’ Top-10 products contributes 20% of sales.
Expansion:
β’ Once the Ambernath facility kicks off FCL will again plan for CAPEX. In January co. will start planning for new CAPEX which can be commercialize in FY23.
β’ In Ambernath with in CAPEX of 27cr, FCL is looking for 150cr of turnover.
β’ Once the Ambernath facility kicks off FCL will again plan for CAPEX. In January co. will start planning for new CAPEX which can be commercialize in FY23.
β’ In Ambernath with in CAPEX of 27cr, FCL is looking for 150cr of turnover.
Raw Material:
β’ Top 10 raw materials contribute 20-22% of total
purchase. (top 10 includes Stearic acid, diamine ethoxylation,surfactant, diamine AEEA, acrylamide, sorbitols, sodium glucokinase.
β’ 60:40 domestic:overseas
β’ Most of the RM is commodity product, so FCL have edge
β’ Top 10 raw materials contribute 20-22% of total
purchase. (top 10 includes Stearic acid, diamine ethoxylation,surfactant, diamine AEEA, acrylamide, sorbitols, sodium glucokinase.
β’ 60:40 domestic:overseas
β’ Most of the RM is commodity product, so FCL have edge
Margin:
Crude price had impacted the cost, but it is not visible due to
- Right Product mix (high margins product offering)
- Passing on the prices to the customers
- Reshuffle the production capacity with more profitable product
- Working with a number of alternate RM supplier
Crude price had impacted the cost, but it is not visible due to
- Right Product mix (high margins product offering)
- Passing on the prices to the customers
- Reshuffle the production capacity with more profitable product
- Working with a number of alternate RM supplier
Cash Flow:
β’ Cash Flow seems impacted due to industry structure.
Cos like Raymond, VTL, Welspun, ArvindCo have a practice to pay in 90 to 120 days. While due to supply chain disruption, inventory has gone up (in order to meet surplus demand).
β’ Cash Flow seems impacted due to industry structure.
Cos like Raymond, VTL, Welspun, ArvindCo have a practice to pay in 90 to 120 days. While due to supply chain disruption, inventory has gone up (in order to meet surplus demand).
β’ Co. can increase its payable days but FCL is not delaying payment, to get adequate rice discount.
β’ FCL is already cash rick co.
β’ Co. already has good line of credit from the banks, which will help for organic growth.
β’ FCL is already cash rick co.
β’ Co. already has good line of credit from the banks, which will help for organic growth.
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