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Ganesh Benzoplast LtdQ3 FY23

Ganesh Benzoplast Ltd Q3 FY23 Earnings Call Analysis

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

Price: ₹132P/E: 14.5Market Cap: ₹948 CrSector: Oil

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2
  • Chemical division utilization expected to increase from ~68-70% to 85-90% in FY24, targeting nearly full capacity utilization after FY25.
  • This increase in utilization implies a 25-30% growth in chemical division sales/revenue.
  • Liquid Storage Terminal (LST) division expected to grow at 7-8% annually in existing terminals.
  • New tank additions anticipated to add INR 12 to 15 crores in incremental revenue starting FY24.
  • LPG refrigerated terminal project underway, with potential revenues beginning FY25 (partial) and FY26 (full), pending construction completion.
  • New capacities expected to command higher rates (5-8% escalation on contracts and additional revenue from new tanks).
  • Overall, growth driven by increased utilization, new capacity addition, better pricing, and new product/services (e.g., LPG storage).

See what Ganesh Benzoplast Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes
  • The company plans a capex of about INR 400-450 crores primarily for the LPG refrigerated terminal project.
  • Funding for this capex will be a mix of equity and debt.
  • Ganesh Benzoplast Limited will contribute around INR 100-150 crores from internal accruals as equity.
  • The balance amount required for the project will be raised through bank loans (debt).
  • The company is not overly concerned about funding availability and is confident in managing the mix of debt and equity.
  • No specific new fundraise announcements beyond this capex plan were mentioned.

See what Ganesh Benzoplast Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes
  • Current general maintenance capex for chemical sites; no big expansion planned immediately (FY24 capacity expected 85-90%).
  • Future expansion planned post FY25 for chemical capacity increase if needed.
  • LPG refrigerated terminal project at JNPT:
  • - Total capex estimated INR 400-450 crores.
  • - Construction start expected within 30-45 days from Feb 2023.
  • - Pipeline and bullets installation to finish in 12 months.
  • - Main refrigerated tank commissioning about 24 months from start.
  • Funding mix for capex: combination of internal accruals (INR 100-150 crores equity) and bank loans.
  • New capacity in Liquid Storage Tank (LST) division expected to add INR 12-15 crores revenue from FY24.
  • Exploring new land allotment (approx. 11,500 sq.m.) at Mangalore port for possible liquid storage/tanker business expansion.

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Margin guidance

Category 3
  • Chemical division utilization is expected to increase from ~68-70% to 85-90% or even 100% by FY ’24, driving 25-30% sales growth and net profit margins potentially improving from 15-17% to around 20% at higher utilizations.
  • Liquid Storage Terminal (LST) division aims for a steady 5-7% organic growth and INR 12-15 crores incremental revenue from new tanks starting FY ’24.
  • Launch of LPG refrigerated terminal facility expected to start revenue generation by FY ’25-FY ’26, adding potential revenues of INR 25-30 crores.
  • Overall capex of INR 400-450 crores planned for LPG and related expansions with expected payback of 4-5 years.
  • Company targets consistent growth with improving operating leverage, resulting in higher EBITDA and PAT margins.
  • Basic EPS showed a 77% YoY increase for the quarter, reflecting positive earnings momentum.

Order book

The transcript does not explicitly mention the current or expected order book or pending orders status for Ganesh Benzoplast Limited. However, from the discussions, some relevant points can be inferred: - The company has advanced discussions with potential customers for its new LPG refrigerated terminal at JNPT, aiming to conclude contracts soon. - In the Liquid Storage Terminal (LST) business, they expect to fill the balance capacity at JNPT expansion by the end of the financial year, with over 50% already booked. - Chemical division contracts are generally for three years, with typical customer retention beyond contract tenure. - Long-term contracts in the liquid storage division mostly have escalations of 5% to 10%. - No specific data on total order book or pending orders was shared during the call. Hence, while steps to secure orders and contracts are underway, no quantified order book figures were provided.

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