Thread by @ValueEducator

#Punjabchemicals Q3 2022 Concall Highlights
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Operations Highlights

1. The revenue for Q3FY22 grew by 22% QoQ to ₹255 Cr from ₹208.8 Cr in the previous quarter.

2. Gross margins stood at 37% in Q3FY22 compared to 40.6% in previous quarter, degrowth of (-362 bp)

3. 53.05% contribution of revenue from exports and 46.9% from domestic markets

4. Top 10 products contributed 65%+ revenues in 9MFY22

5. The contracts with Nippon Kayaku and a japanese company are performing well, the clients are satisfied with the product quality and high demand for molecules is anticipated

6. In discussion to add 2 more products to the portfolio and commissioning in next few quarters
60-65% of revenue from contractual basis with MNC’s

7. Sales were in line with raw material cost and unfavourable product mix resulted in depression of margins

8. EBITDA margins of 13%-15% is sustainable as per management

9. 70% of sales from agrochemicals industry distributed between herbicides and fungicides

10. 130-140 Cr of sales from one API molecules is expected ahead

Business strategy

1. Working on certain intermediates and expected to commercialise on second quarter next year

2. ₹1500 Cr order book from customers in which the existing contacts are extended to 2-3 years and new contracts undertaken are for 5 years and so.

3. These contacts will be renewed at the time of expiry hence creating a recurring revenue

4. Expecting 25% increase in industrial chemicals (phosphorus chemistry)

5. Another new upcoming product will be acting as an import substitute and is already in high demand from customers like mylan, Divis labs, and Laurus labs

6. The consistent supply of products without disruption is what makes punjab chemicals preferential supplier to its customers

7. New products will have Higher margins.

8. 60% work of capex is done