Rossari Biotech Ltd

- Rossari Biotech anticipates strong future growth driven by capacity expansions at Dahej and Unitop, including a 20,000 MTPA capacity increase at Dahej and an additional 30,000 MTPA Ethoxylation capacity at Unitop to meet rising demand. - The new CAPEX of Rs. 178 crore planned in phases over 12-18 months is expected to enable incremental sales of about Rs. 600-700 crore at peak capacity within 2-4 years. - Current capacity utilization is high (near 100% at Unitop and Tristar, 78-80% at Dahej), indicating strong demand with some lost orders due to capacity constraints. - Growth is expected across segments, notably HPPC (Agro, Phenoxy, Institutional Cleaning, Paints, Home & Personal Care), and export markets for Agro surfactants. - Textile Chemicals business outlook is positive from January 2024 with focus on Bangladesh and select international markets. - Management projects continued volume-driven growth, prioritizing capacity utilization over margins in the near term.

- The company expects incremental sales of about Rs. 600 crore from ongoing capacity expansion at Dahej and Unitop over 2-4 years. - Ethoxylation capacity at Unitop will increase by 30,000 metric tons, currently near 100% utilization, enabling more production for existing segments. - Expansion projects will be completed by Q3 FY25, with phased commissioning starting within 6 months. - Management expects revenue growth driven by increased capacity utilization, new product additions, and diversified customer base. - Margins may remain stable in the near term with focus on volume growth over margin percentage; EBITDA expected around current levels by year-end. - ROCE, currently ~22%, is expected to improve to 23-24% around 2 years post-CAPEX utilization. - Overall, management is confident about healthy performance across all segments with improving top line and sustained profitability in the medium term.

- The company experienced high capacity utilization, with Unitop and Tristar plants running at nearly 100% capacity. - Despite strong demand, some orders were lost in July and August due to inadequate capacity, indicating demand exceeded current supply capabilities. - The company did not provide specific orderbook or pending order figures but highlighted waiting periods of up to 40 days for orders at Unitop in July and August. - This capacity constraint led to lost orders, implying a strong outstanding demand pipeline. - To address this, significant CAPEX is underway to expand Ethoxylation capacity by 30,000 MTPA at Unitop and other capacity enhancements planned at Dahej, expected to complete by Q3 FY25. - Management emphasizes ongoing debottlenecking and automation to improve throughput until expansions come online.

- The company plans to fund its ongoing and future CAPEX (capacity expansion) through a balanced mix of internal accruals and external debt. - No specific debt quantum has been finalized yet, but management is comfortable with current debt-to-equity ratios and repayment capacity. - For FY24, some debt may be raised depending on cash levels and CAPEX requirements, with CAPEX spread over 12 to 18 months. - No mention of any new equity fundraising during the call. - Management expressed confidence in their strong balance sheet and ability to manage debt comfortably even if the entire CAPEX is debt-funded.

- Rs. 50 crore allocated for Dahej facility expansion (completion expected by Q3 FY25). - Rs. 128 crore assigned to Ethoxylation capacity expansion at Unitop, increasing capacity by 30,000 MTPA (phased execution over next 12-18 months). - Total announced CAPEX around Rs. 178 crore, with about Rs. 125-130 crore expected to be spent in the current year. - CAPEX financed through a mix of internal accruals and external debt, with manageable debt levels. - Investments aim to support growth in HPPC division and related products for the Home & Personal Care (HPPC) segment. - Additional tank farms and debottlenecking done to support Ethoxylation capacity and production needs. - Future scope for further expansion exists due to available land, especially at Unitop site. - Expected incremental annual sales potential of Rs. 600 crore over 2-4 years upon peak capacity utilization.