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Key highlights from #IGPetrochemicals Q2 FY23 concall🧪🧪

CMP - ₹537

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In India, the demand for phthalic anhydride(PAN) is somewhere around 4,30,000 tons to 4,50,000 tons. India imports 6,000 to 8000 tons of PAN every month and in the last quarter it has imported around 25,000 to 26,000 tons

In this quarter, the company has got Rs 19 crore from maleic anhydride(MAN) vs Rs 27 crore in the previous quarter. As the quantity sold remained the same in both the quarters, the realization from MAN decreased from Rs 150/kg to Rs 92-95/kg. The company produces MAN

as a by-product vs players who produce it via n-butane route hence, the company sales in MAN is directly converted into EBITDA. Non-PAN business is generated a revenue of Rs 40 crore while PAN has generated Rs 530 crore in this quarter

The company generated a revenue of Rs 17-18 crore from DEP last quarter. The company uses 40% of PAN to manufacture DEP. The company makes a gross margin of 12-13% and a net margin of 5-6% on this product

The company plans to achieve 30% of it’s revenues from the non-phthalic anhydride business by FY25 which is right now at 8-9%.The management is confident of achieving the target of Rs 430 crore from non-PAN products by FY25.

The long-term target of the management is to get 50% of revenues from these products

Paints and plasticizers were the major end-uses for PAN which amounted to 90% 5 years back. The current amount stands at 40%.The reason for this is the shifting of Indian chemical companies into downstream specialty chemicals, agrochemicals, unsaturated polyester resins(UPR).

India is planning to revamp the train infrastructure and there is an expected increase in demand from the polymer side in the future. Earlier phthalic anhydride was used in 2 to 3 industries and now it is used in somewhere about 20 industries

The company expects IRR of more 15% and a payback period of less than 5 years for any new project it undertakes

The company has done a brownfield capex of Rs 350 crore to increase the capacity of PAN and MAN by 53,000 tons and 1,500 tons respectively which is expected to come online by March 2024
The company is currently operating at a capacity utilization of 58-60% for it’s

DEP(diethyl phthalate) plant which has a capacity of 8400 tons. They plan to achieve 90-95% capacity utilization in this area in the next 6 months

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