Key highlights

Demand for all 3 products IBP, ATBS and Isobutylene remained strong in the quarter. During the quarter, 90% growth was driven by volumes and rest is due to higher realization YoY

A net sale from ATBS was up by 30% during the quarter, Isobutylene had also seen good growth YoY. IBB also saw good to stable growth. New products grew by about 30%.

On Product mix basis, IBB share has come down 35% to 30%, ATBS from 44% to 40%, Isobutylene share has increased from about 9% to 18%, others about 12%. The mix will move more towards new products and other products as their capacities come on-stream in next 3 years.

There is a forex loss of about Rs 9 crore in June'13 which was present in other expenditure and in June'14 there is marginal forex gain hence other expenditure was down by more than 20% YoY. This helped the margin growth during the quarter along with better economies of scale.

About Rs 115 crore is long term loan as on 30^th June'14.

Capex for next 18 months is expected to be about Rs 150 crore of which about Rs 100 crore will be spent on de bottlenecking of existing facility and on new products which are derivatives of the existing product and rest will be on cogeneration power plant. The capex of about Rs 100 crore has a potential to generate additional revenue of about Rs 200 crore in next 3 years.

New products will start contribution from FY 2016-17 onwards.

Because of Chinese currency getting competitive, the company did have some advantage on higher realization and pricing in international markets.

About 90% of ATBS sales are export sales and about 70% of Isobutylene are exports while IBB is purely domestic sale business. In ATBS company is operating around 70% capacity and for rest of products around 90%. Company can debottleneck the capacities of other businesses.

Management continues to remain bullish on all 3 main products and expects a 20% annualized growth for next couple of years or more. Management expects strong growth momentum in sales to continue going forward.