The company reported 11% growth in net sales to Rs 240.63 crore for the year ended March 2014 which was driven by higher realization of Hydrogen Peroxide and Hydrogen gas. The company's market share in Hydrogen Peroxide market in India is hovering around 41%.
However issues on Gas availability and gas pricing continued to remain in FY 2014 which affected the margins and company was not able to take full advantage of higher Hydrogen Peroxide prices.
During Q1 FY 2015 there was a plant shutdown from April'14 end for about 45 days, due to capacity expansion program and to bring the plant on line, which has brought the installed capacity of Hydrogen Peroxide to about 95000 MT p.a from about 84000 MT. Hence Q1 FY'15 results got affected.
Further high gas prices and their unavailability continue to remain an issue for the company and management is hopeful some solution will come up with Gail. This is hurting the company's margins which otherwise should improve given the higher realization of Hydrogen Peroxide YoY.
The realizations of Hydrogen Peroxide are healthy at around Rs 28000-30000 per ton.
The company has both long term and spot contracts for hydrogen peroxide with customers, so such annual contracts, does not help one to get the advantage in rising markets, it acts as a cushion during the fall.
Overall, management is hopeful to recover the profit fall in Q1 FY'15 in the coming quarters and expects the year to be a kind of flat.