Any current/future new fundraising through debt or equity?

The company has historically expanded using a mix of debt and equity to ensure cash flow stability with growth. Currently, the company prefers debt as a cheaper option compared to equity and does not plan to dilute equity for vessel additions. Future capex and vessel additions will depend on reasonable pricing opportunities maintaining return on capital employed (ROCE) and return on equity (ROE). The company expects to continue capex roughly in the range of INR 150 crores per year based on opportunities. Debt levels have increased due to recent vessel additions, but the debt-to-equity ratio is

Any current/future capex/capital investment/strategic investment?

The company consistently looks for good capex opportunities to maintain or improve returns on capital employed. Capex depends entirely on reasonable-priced opportunities that align with maintaining current return ratios. In recent years, the company has invested around INR 150 crores annually in capex. Going forward, similar levels of capex investment are expected to continue. There is a focus on adding vessels to increase logistics capacity, with debt preferred over equity dilution for funding such expansions. The company may also consider producing bitumen on its own in the near future, indi

Future growth expectations in sales/revenue/volumes?

The company projects volume growth of 15% to 20% annually in the coming years. Volume target for FY25 is set at 6 lakh metric tons, a 20% year-on-year increase. Revenue growth is expected to be around 15% to 20%, provided commodity rates remain stable. They aim to double the volume over the next 2 to 3 years. Capacity enhancement through adding vessels and logistics advantages will support this growth. The company plans capex around INR 150 crores annually, depending on opportunities, to maintain and expand infrastructure. EBITDA per ton is expected to improve to around INR 3,800 t

Future growth expectations in earnings/operating earnings/profits/EPS?

The company expects a revenue growth of around 15% to 20% in volume and turnover for FY25, assuming stable rates. EBITDA per metric ton is projected to increase from INR 3,625 to approximately INR 3,800–3,900 in FY25 and FY26, indicating improved profitability. The company anticipates maintaining strong EBITDA margins around 8.3% and PAT margins around 5.13%. Return on Capital Employed (ROCE) and Return on Equity (ROE) are expected to be maintained or improved, with historical figures between 20% to 25%. With increased utilization of own vessels and expanded fleet, greater operational efficien

Current/ Expected Orderbook/ Pending Orders?

The company has received a significant order of 1,92,000 metric tons from HPCL, BPCL, and IOCL. As of the current quarter, about 60,000 tons have already been supplied to these PSUs. The entire order volume is expected to be completed within the current financial year (FY25). Orders are supplied on a continuous, regular basis as per requirements. The company maintains a strong order pipeline with expectations of sustainable long-term growth. There is ongoing focus on infrastructure activity and market trends supporting robust order inflow. No specific total pending orderbook value mentioned, b

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Agarwal Industrial Corporation LtdQ1 FY24Chemicals & Petrochemicals

Agarwal Industrial Corporation Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹546P/E: 10.7Market Cap: ₹621 CrSector: Chemicals & Petrochemicals

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→The company projects volume growth of 15% to 20% annually in the coming years.
→Volume target for FY25 is set at 6 lakh metric tons, a 20% year-on-year increase.
→Revenue growth is expected to be around 15% to 20%, provided commodity rates remain stable.
→They aim to double the volume over the next 2 to 3 years.
→Capacity enhancement through adding vessels and logistics advantages will support this growth.
→The company plans capex around INR 150 crores annually, depending on opportunities, to maintain and expand infrastructure.
→EBITDA per ton is expected to improve to around INR 3,800 to 3,900 in FY25 and FY26.
→The market demand and infrastructure projects ensure sustained volume growth with limited challenges foreseen.

Margin guidance

Category 3

→The company expects a revenue growth of around 15% to 20% in volume and turnover for FY25, assuming stable rates.
→EBITDA per metric ton is projected to increase from INR 3,625 to approximately INR 3,800–3,900 in FY25 and FY26, indicating improved profitability.
→The company anticipates maintaining strong EBITDA margins around 8.3% and PAT margins around 5.13%.
→Return on Capital Employed (ROCE) and Return on Equity (ROE) are expected to be maintained or improved, with historical figures between 20% to 25%.
→With increased utilization of own vessels and expanded fleet, greater operational efficiency and volume growth are expected.
→The firm plans to continue strategic capex around INR 150 crores annually to capitalize on market opportunities without diluting equity, supporting sustainable earnings growth.

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Fundraise plans

Yes

→The company has historically expanded using a mix of debt and equity to ensure cash flow stability with growth.
→Currently, the company prefers debt as a cheaper option compared to equity and does not plan to dilute equity for vessel additions.
→Future capex and vessel additions will depend on reasonable pricing opportunities maintaining return on capital employed (ROCE) and return on equity (ROE).
→The company expects to continue capex roughly in the range of INR 150 crores per year based on opportunities.
→Debt levels have increased due to recent vessel additions, but the debt-to-equity ratio is maintained similar to last year.
→The company is comfortable adding a few more vessels through debt if required to meet local demand.
→No explicit mention of new fundraising plans but expansion will likely involve a prudent mix of debt and equity depending on opportunities and maintaining financial ratios.

Order book

Yes

→The company has received a significant order of 1,92,000 metric tons from HPCL, BPCL, and IOCL.
→As of the current quarter, about 60,000 tons have already been supplied to these PSUs.
→The entire order volume is expected to be completed within the current financial year (FY25).
→Orders are supplied on a continuous, regular basis as per requirements.
→The company maintains a strong order pipeline with expectations of sustainable long-term growth.
→There is ongoing focus on infrastructure activity and market trends supporting robust order inflow.
→No specific total pending orderbook value mentioned, but active orders and pipeline indicate healthy demand.

Capex plans

Yes

→The company consistently looks for good capex opportunities to maintain or improve returns on capital employed.
→Capex depends entirely on reasonable-priced opportunities that align with maintaining current return ratios.
→In recent years, the company has invested around INR 150 crores annually in capex.
→Going forward, similar levels of capex investment are expected to continue.
→There is a focus on adding vessels to increase logistics capacity, with debt preferred over equity dilution for funding such expansions.
→The company may also consider producing bitumen on its own in the near future, indicating potential forward integration.
→Expansion plans will be a mix of debt and equity to ensure cash flows are not impacted by growth.
→No dilution of equity is planned currently; debt is the favored mode for financing asset additions.

How does Agarwal Industrial Corporation Ltd rank vs peers in Chemicals & Petrochemicals?

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