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

Recently completed a CapEx of around ₹100 crore over the last year or two, currently in consolidation phase. Detailed engineering and budgeting completed for expanding the NBR business, aiming to double capacity. Working on reducing CapEx cost for the NBR expansion project. Planning to increase utilization of new capacities, targeting 70-80% utilization by Q4 FY '24 for nitrile latex. At the right time, ready to deploy treasury funds (currently ₹100 crore) for expansion or acquisition opportunities. Exploring new products and opportunities different from current product sets as potential futur

Future growth expectations in sales/revenue/volumes?

Volume growth is a key focus, evidenced by 22% volume growth in Q1 FY24 and 110% export volume growth year-on-year. Export sales have increased to 31% of total revenue in Q1, with volume share about 34-35%; expected to grow further with higher realizations on exports. The company expects turnover to increase from the current ~₹1,000 crore to around ₹1,500 crore over the next few years, driven primarily by volume growth despite raw material price volatility. New capacities, including nitrile latex and synthetic latex production, are ramping up, aiming at higher utilization and increased revenue

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

Volume growth of 22% in Q1 FY24 provides a positive volume trajectory. Margins under pressure due to falling raw material prices and inventory losses, especially in NBR and paper binder segments. New capacities commissioned in March 2023 have led to higher depreciation and interest costs impacting short-term profitability. Management expects EBITDA per ton to stabilize and grow as new, higher-value latex product lines ramp up. Cost rationalization and operational efficiencies expected with debottlenecking and shifting nitrile latex to new plant. Long-term growth drivers: Expansion in nitrile l

Apcotex IndustriQ1 FY24Industrial Products

Apcotex Industri Q1 FY24 Earnings Call Analysis

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

Price: ₹593P/E: 19.3Market Cap: ₹3.1K CrSector: Industrial Products

Management growth scorecard

Revenue

Category 2

Margin

Category 4

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

Volume growth is a key focus, evidenced by 22% volume growth in Q1 FY24 and 110% export volume growth year-on-year.
Export sales have increased to 31% of total revenue in Q1, with volume share about 34-35%; expected to grow further with higher realizations on exports.
The company expects turnover to increase from the current ~₹1,000 crore to around ₹1,500 crore over the next few years, driven primarily by volume growth despite raw material price volatility.
New capacities, including nitrile latex and synthetic latex production, are ramping up, aiming at higher utilization and increased revenues (~₹200 crore revenue expected from new capacities this year).
Growth will predominantly come from latex products (nitrile latex, styrene butadiene latex, styrene acrylic latex) and incremental growth from NBR and paper binders.
The B2C business (ApcoBuild) is growing at ~20% annually and expected to scale over 5-10 years with better distribution.
Longer-term target includes geographical expansion and new product development to enhance value and EBITDA per kg.

Margin guidance

Category 4

Volume growth of 22% in Q1 FY24 provides a positive volume trajectory.
Margins under pressure due to falling raw material prices and inventory losses, especially in NBR and paper binder segments.
New capacities commissioned in March 2023 have led to higher depreciation and interest costs impacting short-term profitability.
Management expects EBITDA per ton to stabilize and grow as new, higher-value latex product lines ramp up.
Cost rationalization and operational efficiencies expected with debottlenecking and shifting nitrile latex to new plant.
Long-term growth drivers: Expansion in nitrile latex and latex products, NBR business debottlenecking (15%-20% capacity increase), and new product development.
Current focus is on consolidating growth and strengthening balance sheet before further CapEx.
Although near-term profits impacted, management targets higher turnover and bottom line growth aligned with volume expansion and product mix improvement.
No explicit EPS guidance for the year, but intent is to improve bottom line and shareholder returns over the medium term.

See what Apcotex Industri management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

- The company maintains a philosophy of about 70-30 equity and debt in its treasury investments. - Currently, they have a treasury value of INR 100 crore against term loans of about INR 125 crore. - Although they could use treasury funds to repay debt immediately, they prefer to keep some treasury amount for strategic advantages like quick expansion or acquisition opportunities. - They do not time the market for selling equity investments and keep them as long-term investments. - If required for expansion or acquisitions, they will utilize cash or raise funds accordingly. - For the next leg of expansion, detailed engineering and budgeting for doubling the NBR business capacity are underway, focusing on reducing CapEx. - There is no explicit mention of immediate plans for raising new debt or equity, but they will act strategically if needed. In summary, no concrete current fundraising plans disclosed, but readiness exists for strategic funding if opportunities arise.

Order book

The provided transcript from the Q1 FY24 conference call of Apcotex Industries Limited does not explicitly mention the current or expected order book or pending orders. However, relevant insights related to demand and capacity utilization include: - Export volumes have grown by 110% year-on-year, indicating strong demand in export markets. - The nitrile latex plant is currently at about 30% capacity utilization, expected to increase to 70%-80% by Q4 FY24. - Overall volumes grew by 22% year-on-year in Q1 FY24. - Management is focusing on volume growth and increasing market share geographically. - No specific quantitative order book or pending order value is disclosed. In summary, while orders are implied through volume growth and capacity utilization, no detailed order book or pending orders data is provided in this document.

See what Apcotex Industri management said on order book — free account, 30 seconds.

Capex plans

Yes

Recently completed a CapEx of around ₹100 crore over the last year or two, currently in consolidation phase.
Detailed engineering and budgeting completed for expanding the NBR business, aiming to double capacity.
Working on reducing CapEx cost for the NBR expansion project.
Planning to increase utilization of new capacities, targeting 70-80% utilization by Q4 FY '24 for nitrile latex.
At the right time, ready to deploy treasury funds (currently ₹100 crore) for expansion or acquisition opportunities.
Exploring new products and opportunities different from current product sets as potential future growth drivers.
CapEx plans aligned with increasing volumes, market share, and geographic breadth over the next few years.

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