Key Highlights

Volumes for Sep'16 quarter stood at 35 KT as compared to 33.8 KT for Sep'15 quarter. User industries have grown by around 8% where as the company was not able to grow to that extent in Sep'16 quarter, due to lower availability of Butadiene in June'16 quarter. There were many imports and this has led to lower offtakes for the company. Now with relatively lower import stocks, company expects the volumes to improve going forward.

Margins improved largely due to reduction in competition and better pricing. Further Sep'15 quarter included some inventory losses due to sudden lower crude oil prices.

Management is seeing some demand pick up from automobiles, households, toys, stationery, packaging etc. Cnfident of around 8-10% volume growth from H2 of FY'17. Automotive and households continue to be major sectors for the company. Demand from automobiles and Household segment is expected to remain strong going forward as well for company's products. Automotive sector has better margins than other sectors.

The company has sufficient capacity for intermediates and for compounding. The company will continue the tolling

Management aims to reach double digit margin through new value added products and higher pricing. However any volatility in crude oil can affect the company temporarily.

Net sales were lower in H1 FY'16-17 by 10% largely due to lower volumes by around 9% in June'16 quarter on YoY basis, due to lower availability of Butadiene. The availability of Butadiene has improved since then.

There was a tax credit of Rs 19.21 crore in Sep'15 quarter due to the merger of the subsidiary.

Management expects normal tax rate for FY'17.

Company expects to regain the lost market share in rest of FY'17. Management expects to further penetrate in other industries significantly and to be a strong player, like how they are in Automobiles and Household segment. Management also expects to improve the distribution network through 3^rd party logistics to increase the penetration level of the products.