Key Highlights

Major export customer got fire in April 18. No sales expected from this customer in entire FY 19. Otherwise there is no problem in exports.

Loss in sales due to this export customer is around 3-4% of sales of FY 18.

Domestic market continued to remain good. However there was some postponement in demand due to higher raw material prices.

All petrochemical prices have increased. This has resulted in higher working capital as price per kg is higher.

Petrochemical prices already started moving up before crude (3-4 months back) and these price already declined before crude declined. So this will ease working capital and will result in higher demand which was held back due to higher prices.

Debtors are well under control.

Phase 1 of Rs 24 crore project has been completed. Another Rs 36 crore will be completed by end of FY 19. This will result in new power plant and nitrile capacity to increase from 15000 to 21000 MT. a small shut down of nitrile plant will be there in Dec 18 quarter to augment the capacity in the same plant.

Power plant will commence from Mar 19 onwards.

The margins should improve. The endeavour is to reach to around 13.5-14% in next 12 months and to take it forward from there.

Treasury portfolio of around Ra 70 crore is outsourced to fund managers. Loss this quarter is due to MTM on equity portfolio

Raw material price increase or decrease is fully passed on to the customer

NBR would account for around 35% of total sales, Synthetic Latex would contribute around 50% of total revenues and Synthetic Rubber would be around 15% for FY 18. Exports mostly is from sale of Latex.

Open for inorganic acquisition.

By mid of FY 20, the company has plans to invest around Rs 250 crore for increasing capacity of latex by 40000 tons and NRB by around 25000 tons. This will take around 18 months time from the start of the project and can generate more than Rs 500 crore of additional turnover.