Any current/future new fundraising through debt or equity?

As of March 2023, Bodal Chemicals Limited's total debt stood at ₹755 crore. The company plans to add about ₹200 crore more debt during FY24. Simultaneously, some repayment will start from the current year. Net increase in debt is expected to be around ₹150 crore. By the end of next fiscal year (FY24), total debt is projected to be in the range of ₹900 to ₹950 crore, including working capital. The resulting debt-to-equity ratio will be around 0.8, considered decent for the company size. There is no mention of any new equity fundraising in the transcript.

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

Bodal Chemicals is undertaking a Greenfield Benzene Derivatives project at Saykha with a total CAPEX of ₹390 crore (excluding ₹64 crore already spent on Sulphuric Acid). Out of the ₹390 crore, approximately ₹250 crore is planned to be spent in the current fiscal year (FY24), with project completion targeted by September or December 2023. The Saykha project aims to produce 63,000 metric tons per annum of Benzene Derivatives, targeting pharma and agrochemical markets. The Sulphuric Acid project at the Saykha Greenfield site, currently on hold, will be restarted once the site stabilizes. Addition

Future growth expectations in sales/revenue/volumes?

FY23 saw a revenue of ₹1,586 crore with a 23.5% degrowth due to subdued dye intermediates and dye stuff performance. For FY24, management expects better performance than FY23 in dye stuff and dye intermediates, though reaching past peak volumes (~18,000-20,000 MT) may be difficult due to structural demand issues. Chlor-Alkali business expected to improve with ongoing technology upgrades and increased utilization, targeting ~80-95% capacity. Benzene Derivatives Greenfield project (63,000 MT capacity) slated to start trial runs by September 2023, aiming for ₹300-400 crore turnover and ~15% EBITD

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

Company expects margin improvement from current 8-9% to around 11-12% in next 1-2 years, driven by new benzene derivatives business, chlor-alkali plant upgrades, and dye intermediate improvements. Ultimate margin target is around 13-15%, but dye stuff and intermediates may remain under pressure for some time. Benzene derivatives phase one (targeting 15% EBITDA) expected to generate 300-400 crore turnover starting end of December 2023, contributing positively to margins. Caustic soda business expected to improve with the upgraded plant operating near 95% capacity, leading to better profit

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Bodal Chemicals LtdQ1 FY23Chemicals & Petrochemicals

Bodal Chemicals Ltd Q1 FY23 Earnings Call Analysis

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

Price: ₹66.3P/E: 30.4Market Cap: ₹921 CrSector: Chemicals & Petrochemicals

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

N/A

Order

N/A

Capex

Yes

2 of 3 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→FY23 saw a revenue of ₹1,586 crore with a 23.5% degrowth due to subdued dye intermediates and dye stuff performance.
→For FY24, management expects better performance than FY23 in dye stuff and dye intermediates, though reaching past peak volumes (~18,000-20,000 MT) may be difficult due to structural demand issues.
→Chlor-Alkali business expected to improve with ongoing technology upgrades and increased utilization, targeting ~80-95% capacity.
→Benzene Derivatives Greenfield project (63,000 MT capacity) slated to start trial runs by September 2023, aiming for ₹300-400 crore turnover and ~15% EBITDA contribution, driving margin expansion.
→Overall margin expected to improve from current ~8-9% to around 11-12% in the next 1-2 years combining gains from Chlor-Alkali, Benzene Derivatives, and improved dye intermediate demand.
→Export contribution remains significant at 69% of revenue, indicating global growth focus.

Margin guidance

Category 1

→Company expects margin improvement from current 8-9% to around 11-12% in next 1-2 years, driven by new benzene derivatives business, chlor-alkali plant upgrades, and dye intermediate improvements.
→Ultimate margin target is around 13-15%, but dye stuff and intermediates may remain under pressure for some time.
→Benzene derivatives phase one (targeting 15% EBITDA) expected to generate 300-400 crore turnover starting end of December 2023, contributing positively to margins.
→Caustic soda business expected to improve with the upgraded plant operating near 95% capacity, leading to better profitability.
→Greenfield Saykha plant (benzene downstream) CAPEX of ~390 crore with completion expected by September/December 2023 will be a key growth trigger.
→Debt expected to increase moderately to 900-950 crore by FY24-end, with a healthy debt-equity ratio (~0.8), supporting growth plans without excessive leverage.
→Overall earnings growth will be gradual, reflecting improved margins and volume recovery post current industry challenges.

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Fundraise plans

→As of March 2023, Bodal Chemicals Limited's total debt stood at ₹755 crore.
→The company plans to add about ₹200 crore more debt during FY24.
→Simultaneously, some repayment will start from the current year.
→Net increase in debt is expected to be around ₹150 crore.
→By the end of next fiscal year (FY24), total debt is projected to be in the range of ₹900 to ₹950 crore, including working capital.
→The resulting debt-to-equity ratio will be around 0.8, considered decent for the company size.
→There is no mention of any new equity fundraising in the transcript.

Order book

The provided transcript and document do not specifically mention details about the current or expected order book or pending orders for Bodal Chemicals Limited. The discussion mainly covers: - Debt levels and expected incremental debt for FY24. - Business performance and margins outlook in dye intermediates, dye stuff, Chlor-Alkali, and benzene derivatives. - Market conditions including demand challenges and import pressures. - Production volumes and revenues for FY23. - No explicit data or commentary on order book status or pending orders. Therefore, there is no disclosed information on current or expected order book or pending orders in the available transcript.

Capex plans

Yes

→Bodal Chemicals is undertaking a Greenfield Benzene Derivatives project at Saykha with a total CAPEX of ₹390 crore (excluding ₹64 crore already spent on Sulphuric Acid).
→Out of the ₹390 crore, approximately ₹250 crore is planned to be spent in the current fiscal year (FY24), with project completion targeted by September or December 2023.
→The Saykha project aims to produce 63,000 metric tons per annum of Benzene Derivatives, targeting pharma and agrochemical markets.
→The Sulphuric Acid project at the Saykha Greenfield site, currently on hold, will be restarted once the site stabilizes.
→Additional forward integration products (like MPDSA and others) in the Benzene Derivatives segment are deferred to a second phase due to increased costs and market uncertainties but have environmental clearance and are ready for execution in the future.

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