Key Highlights

Ebidta margin was under pressure in Dec 18 quarter largely due to high inventory of raw materials and some slowdown seen in rubber and automotive segment.

The company was carrying around 2 mths of high cost imported inventory. Raw material prices are coming down and drop was significant in Dec 18 quarter. By Jan 19 month the high cost inventory should be done.

Around 15% of total sales is exports in Dec 18 quarter.

Major export customer which got fire in April 18. No sales expected from this customer in entire FY 19. Otherwise there is no problem in exports. Volume will continue to get affected for 2 more quarters. Loss in sales due to this export customer is around 3-4% of sales of FY 18.

Capex for 9 months ended Dec 18 stood at Rs 31 crore and rest Rs 30 crore will be spent over 6-9 months. This includes power plant commissioning by June 19. The capex will increase latex capacity by around 20%.

No significant change in working capital. No long term debt. Short term debt is less than Rs 25 crore.

Other user industry segments performed on expected line.

Tax rate would depend upon how much treasury gains company book in that quarter. On operating gains the company pays full tax.

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.

Debtors are well under control.

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.

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 are from sale of Latex.