Thread by @ValueEducator

#Yashoindustries Q3 Concall Highlights

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Operational Highlights

1. Revenues stood at ₹166.4Cr in Q3FY22 from ₹97.5Cr in previous year same quarter, growth of 70.7% YoY

2. EBITDA grew by 82.3% YoY to ₹28.2 Cr with EBITDA margins at 17% in Q3FY22

3. Volumes increased by 35.8% YoY to 2953 MTPA

9MFY22 Revenue contribution

1. Growth driven by the specialty segment followed by rubber and lubricants.

2. Aroma chemicals- 14%, Food antioxidants-13%, Rubber chemicals- 36%, Lubricant additives- 13% and Specialty chemicals- 24%

3. Total 148 products across these verticals

Domestic revenues stood at 38% followed by USA- 26, Europe- 22% and RoW- 14% (export revenues- 62%)

Tier1 and Tier 2 suppliers for FMCG customers like, Adani wilmar, colgate, SH kelkar, comtinenatl tyres, CEAT, mischelinen, jk tyres, indian oil, HPCL etc

Expanded capacity from 6000 MT to 11000 MT for rubber, lubricants and speciality segment

Improvement in margins will begin from Q4FY22 onwards

Current capacity utilisation is at peak of 90% (existing + part of new capacities) for 9MFY22 and continues to operate on optimal levels.

Company is evaluating opportunities for capacity expansion

Unexpected incremental cost of power and raw materials will be passed on in next quarter

Key raw materials for different verticals

1. Antioxidants- Hydroquinone & Tertbutyl alcohol
2. Aroma chemicals- Clove leaf oil (imported from Madagascar)
3. Rubber and lubricants- Carbon di-sulphide, amines & di-phenylamines

3-6 months contract with suppliers for procurement. Also having contracts with customer on quarterly to monthly basis and many other are on spot basis

FY22 revenue guidance of ₹540Cr approx.

Applied for EC and under approval process

Working in 3 segments within lubricants i.e antioxidants, corrosion inhibitors and fixer modifiers of which- lubricant is performing well, fixer modifiers approval period is longer and is

picking up well and corrosion inhibitors will be driven by the demand ramp up of ethanol blended fuel

Specialty segment products finds applications in stabilisers for monomer in acids, epoxy resin and thermoplastics

Competitors

1. Food antioxidants- Camlin fine science, Clean science, Solvay

2. Aroma chemicals- manufacturer from Indonesia because clove oil is grown mainly there

3. Rubber segment- NOCIL, LANXESS and some Chinese players

4. Lubricants- BASF , LANXESS and few competition from china

The greenfield project is under consideration and approvals are expected soon.

Moderate growth for 2022-23 and will be more into rubber, lubricants and specialty segment

Increasing R&D capacity and intend to increase R&D spending from this quarter onwards and will be focused on lubricant and rubber products

Long term debt is ₹40-45 Cr and short term debt is ₹100 Cr. Debt reduction will not be anytime soon as focus on greenfield expansion

No customers contributed more the 5% of revenues

Rubber, specialty and lubricants segment have better margins compared to food and aroma business