Thread by @ValueEducator

#TatvaChintan Q3 FY22 concall highlights 🧪

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Operational Highlights :

1. It was one of the most challenging quarter
2. Revenue was down by 15.3% QoQ due to contraction in demand from the auto industry.

Semiconductor shortage led to slow down
in the industry growth
3. EBITDA margins contracted to (-26.27%) QoQ due to raw material prices and other expenses, Management had highlighted the unsustainability of EBITDA margins in the previous concall.
4. Overall YoY performance stood

strong with revenue growth of 30.6%

5. Demand outlook is strong but consumers are facing difficulties due to semiconductor shortages

Incremental Overheads:
1.Freight Cost were up 2.5% of sales
2.Power cost were up 2% of sales

Revenue Break-up :

1. PTC - 24% (Q2 - 17%), SDA - 51% (Q2 - 62%), PASC - 22% (Q2 - 21%), Electrolyte Salts - 2% (Q2 - Negligible), Rest – others
2. Demand for SDA contracted due to supply chain disruptions in industry
3. Electrolyte salts started contributing to revenue

and an uptake in demand is expected
4.PTC stood strong because of new product innovation
Domestic/Export mix - 20%/80%

Product Launches :
1. New development in agrochemical intermediate(PASC) in continuous flow chemistry and synthetic catalyst (PTC) with margins similar to SDA

2. They were working on other synthesis and accidentally developed a new product having application in pharma, inks, and agro industry

Capex
1. Acquired new plot of land out of Dahej SEZ
2. Post EC approvals, the new expansion will lead to capture of domestic market share

3. Existing Capex will commercialise in Nov-2022 and capacity saturation in 2-3 years

Orders Bagged

1. Looking for opportunities in solvent for lithium batteries (different solvent composition is required for different geographies and weather conditions,

one such solvent will be manufactured by TCPL
2. Got commercial approvals for electrolyte salts product and another order in the pipeline for approvals
Upcoming orders expected in SDA and more 2 customers in the pipeline

Project Selection Criteria
1. Focus on environmentally sustainable products with green technology, not just any random project available.
2. Undertaking higher purity level molecules

Upcoming Opportunities

Solvents : There are 4 different solvents used in a lithium battery depending on the climate conditions. These solvents help in regulating the temperature and charge.

Electrolyte Salts : Increase in demand For Electrolyte Salts used in supercapacitors will be exponential as the adoption of green energy and power generation through wind and solar rises.

1. These supercapacitors will be used in energy storage locations because the electricity generated cannot be transferred directly to the grid.
2.Supercapacitors are also used in modern IC engine cars to reduce the load on batteries during initial ignition

3. It also has application in grid conditioning in the power industry.(grid stabilisation)

SDA :
1. The demand for SDA will be higher from marine vessels and industrial applications
2. The SDA used as Catalytic converter in cars will not be recurring in demand as OEMs are offering 10 years warranty for these converters.

Henceforth the demand in cars will only come from new manufacturing.

Overall the performance was optimum and management stood defensive from the industry pressure. Demand is expected to revive from April 2022 and the aspiration to become 1000 Cr in next 3-4 years is on track.

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