Key Highlights

Oral care accounted for around 57.6% of total revenue in FY 19 while non oral care accounted for the rest. Of the total revenues, there has been a 130 bps shift towards revenues from oral care business to the non oral care business in FY 19 on YoY basis.

Net debt as on Mar 19 stands at around Rs 500 crore as compared to Rs 564 crore on Mar 18. Debt will keep reducing in coming years. Strong cash flow will result into substantial reduction in the Net Debt.

India revenues continue to get impacted due to lower offtake by key customers. The company had incurred capex in India and higher fixed costs and lower off take affected the margins in Mar 19 quarter. Overall offtake will improve in FY 20 as the year progresses.

There has been no growth in demand in India for the company as the offtake was at the same level as it was last year. Customers are not able to lift what they have promised. If Assam plant was not set up, it would have worse as new business from Assam plant helped in replacing the delays from other existing customers.

The company is working with major pharma brand names in India. While the regulations were cleared in Dec 18 quarter, it took some time for implementation. Management expects pharma to do very well in FY 20 including exports. The company got a big break through with one of the major brand Soframycin wherein the Aluminum tubes will be replaced by laminated tubes. This opens up a huge opportunity as it would result in new business with larger volumes.

While in India, Hair care, food and home care categories are growing well for the company. But the company continues to hear of lower demand from rural India which resulted in reshuffle of offtakes and hence quarterly targets becomes difficult.

India should come back strongly in coming years. But difficult to determine quarterly levels.. June 19 quarter will remain soft due to elections. Then there will be recovery every quarter.

US market grew by 19% in Mar 19 quarter. The company commercialized new businesses in US and in Mexico which are yielding results. Expects growth momentum to continue in FY 20 as well. Higher volumes resulted in better margins in US geography. Shifted some capacity from US to Mexico which will result in meeting the higher demand of Mexico.

Columbia restored back to profits. Expects the same to sustain going forward.

EU also grew by 16% in Mar 19 quarter. Higher volumes and better product mix aided margins. New business provides good visibility for FY 20.

Unlike in past years, China has grown in non oral care business and now accounts for around 38% of total revenues. The trend looks sustainable.

Overall the year ended with revenue growth from all regions except AMESA due to India Pharma Regulation Impact and lower off take by key customers. Non oral care continues to be focus area with winning new contracts in Americas, Europe as well as EAP Regions. The company had created capabilities during recent years which has begun yielding results and will continue in following year/s.

Blackstone has committed upto $460M to acquire majority stake in Essel Propack. It will pay a purchase price of Rs 134 per share to acquire 51% shareholding from Ashok Goel Trust.

This transaction will trigger a mandatory open offer for a purchase of additional 26% shares of the company. Open offer price fixed at Rs 139.19 per share

Ashok Goel will retain minority stake in the company and will continue with the management affairs. The sale is expected to be completed in the coming months, subject to customary closing conditions and regulatory approvals.

Expects 15% growth in net sales in FY 20 given the current economic conditions and if it does not deteriorate further.