Apcotex Industries held a conference call on 29 October 2021 to discuss the results for the quarter ended Sep'21 and way forward. Mr. Abhiraj Choksey- Managing Director, Mr. Anand V Kumashi- Company Secretary and Mr. Sachin Karwa – Chief Financial Officerof the company addressed the call.

Highlights of the Concall

• The company reported highest quarterly revenue of Rs 243 crore, growth of 88% over Q2FY21, on back of strong volumes and increase in realizations. 88% higher growth in revenues was led by one third growth in volume term and two third growth in value term.

• The company reported highest quarterly export sales of Rs 49 crore, contributing to 20% of overall revenue. The company expects 35-40% of sales to be from exports over next 2-3 years which would be a little higher margin business. It's for the medical glove industry was growing in double digits even pre COVID. There are only five or six suppliers around the world for this nitrile latex product and the company has developed it over the last few years.

• The company has achieved the highest ever quarterly sales volume, including in exports

• The company reported highest ever absolute EBITDA of Rs 31.4 crore during the quarter but EBITDA margin was lower than Q1FY22 at 12.% due to increase in shipping rates for both imports and exports, disruptions in certain raw materials, and also an increase in the cost of manufacturing for some products due to significant increase in Coal and Gas prices.

• The company mentioned that it will be able to pass increased cost, but this may take three to six months to pass along with some customers and with some customers it will be able to do it almost immediately.

• Major debottlenecking projects of the company have been completed between July and October 2021 which would allow additional 10-15% growth.

• The brownfield expansion projects at Taloja and Valia have commenced. Investments in these two projects is expected to be Rs 180-190 crore over the next 4 quarters from earlier Rs 140-150 crore as prices had sort of changed dramatically for steel, cement and other commodities used in construction.

• Further escalation in capex costs is expected on account of commodity price increases

• NBR Anti-Dumping- Appeal has been filed in CESTAT for both cases

• The demand for Apcotex Industries products remains strong. All customers of the company are reporting strong growth, and the requirements that they're indicating for the next quarter is also are quite strong- India and outside as well

• The company has improved market share by adding more customers within India. It has also added more customers outside India and applied few new applications. All this has resulted in reasonably good volume growth as well.