Apcotex Industries held a conference call on 28 April 2022 to discuss the results for the quarter ended Mar'22 and way forward. Mr. Abhiraj Choksey- Managing Director, Mr. Anand V Kumashi- Company Secretary and Mr. Sachin Karwa – Chief Financial Officer of the company addressed the call.

Highlights of the Concall

• Improved performance in Q4FY22 and whole of FY22 was driven by strong volume across all the industries, and geographies products group. Q4FY22 volume growth was 24% compared to Q4FY21

• Export contribution grew to 20% of overall revenue.

• Work on new expansion projects is running on schedule and expected to be completed in Q3 FY23

• The company is running at 100% capacity utilization.

• The company feels its products have potential to increase its revenue to two and a half times the current revenue over the next five years.

• The company is not so focused about revenues given the huge volatility than oil prices, and therefore, downstream petrochemicals which are its main raw materials. The company is more focused towards EBITDA margins.

• The company has not added any more states in terms of Apcobuild in the current quarter and is working in Maharashtra, Gujarat, Madhya Pradesh and Goa. Apcobuild has grown by around 120-130% in FY22.

• The company mentioned that the demand cycle is quite strong. Unfortunately, there are customers who are asking for material, but the company is not able to go through the approval cycle, because it just doesn't have material to give them. As a result the company is more focused towards the current customers that it has been working with for the last year or two strategically.

• The company had some inventory gains during the quarter due to the war as suddenly crude oil spiked all up petrochemicals prices which led to spike in raw materials prices. And the company had some good buying that was done in December and January and February, and so on. So that to some extent, about 10- 12% of profits was due to that factors factor as well.

• The company expects sustainable margins to be in the range of 13-17% in the long term as long as the macro environment is strong.

• The company is waiting on the final environmental clearance for NBR project which it expects to come through by the end of this quarter after which it will take a final call. Commodity prices and capex costs have significantly increased in the last three to four months. So the company would to reevaluate the IRR of the project and then take a final call.

• The company is doing two projects, one in Taloja facility and second is in Valia facility. Valia facility is completely for gloves while Taloja facility is a multipurpose latex plant. Total capex for both plants is around Rs 190 crore out of which it has spent around 40% till March 2022.

• Synthetic latex forms around 55-60% of total revenue while balance is Synthetic rubber.