meghmani organics limited · 2016-11-28 · meghmani organics limited 1q fy2006 results briefing 26...

Meghmani Organics LimitedMeghmani Organics Limited

1Q FY2006 Results Briefing

26 August 2005

Established in 1986, Meghmani Organics is amongst

the leading pigments and agrochemicals

manufacturers in India

Core competency = Organic chemistry

Capitalising on the global outsourcing trend

Corporate OverviewCorporate Overview

Corporate profileCorporate profile

PIGMENTS & AGROCHEMICALSSpecializes in the manufacture of green & blue pigment products and a broad spectrum of commonly used generic pesticides

PIGMENTS: Multiple applications in printing inks, plastics, paints, textiles, leather, paper & rubber

AGROCHEMICALS: Crop protection and non-crop applications like Public health, termite & insect control, veterinary

applications

BusinessFocus

IndustryFocus

GLOBAL FOCUSwith key markets in India, the US, Europe, Latin America & Asia Pacific

MarketFocus

Manufacturing FacilitiesManufacturing Facilities

4 multi location plants in Gujarat, Western Part of IndiaTotal floor area of 180,000 sq mISO 9001-2000 certified

Vatva Plant

Panoli Plant

Chharodi Plant

Ankleshwar PlantPigments Agrochemicals

Global MarketsGlobal Markets

Extensive network of 20 overseas distributors North AmericaEurope Asia (excluding India)South AmericaAfricaAustralia

Over 1,000 stockists, agents, distributors & dealers covering India market

Warehouses in Belgium & Uruguay

73% of total revenue from export sales as at FY05

Key Developments Since ListingKey Developments Since Listing

2004 2005

•Listed 10 Aug 2004 •Issue price S$0.28 •Raised S$28.1m

Established presence in Europe & USA: • Meghmani Europe BVBA (Belgium)•Meghmani Organics USA Inc.

•Live on SAP

•Wins global WHO tender

•1st agrochem label registration for the USA: Permethrin 98.5% Technical

• Obtained 4 product registrations in Malaysia

13 new product registrations in 8 countries:•China•Bangladesh•Indonesia•Nigeria

•Paraguay•Thailand•Turkey •Vietnam.

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Our Business ModelOur Business Model

Business OverviewBusiness Overview

Meghafast

Products Multiple Applications

Brands

Printing inks, plastics, paints, textiles, leather, paper & rubberWider than dyes

CPC Blue (Copper Phthalocynine Blue)Pigment Green 7Pigment Blue 15, 15:1, 15:3, 15:4

Synthetic Pyrethroid, Organophosphorousand neonicotinoidPesticide intermediatesTechnical Grade pesticides Pesticide Formulations

Crop protectionNon-crop applications

MegastarMegacyperOwns 23 brands in India 3 of which are leading brands in its segments

PIGMENTSPIGMENTS

PESTICIDESPESTICIDES

Pigment ManufacturingPigment Manufacturing

PHTHALOCYANINE GREEN AND BLUE PIGMENTS

Upstream product

Sold to other pigment manufacturers

End products

Sold to Industrial application users like ink, paint, plastic

etc. manufacturers

PIGMENT GREENPIGMENT GREEN PIGMENT BLUEPIGMENT BLUE

CPC BLUECPC BLUE

Design capacity of Pigment Blue plants at Panoli is 14,400 tonnes per annum 85% of production is exported worldwide as at FYE 31 Mar 05More than 200 customers in 55 countries

Encompasses the entire value chain

Pesticide Intermediates

Technical Grade Pesticides

Pesticide Formulations

Vertically integrated manufacturing processes- approximately 59% of production exported worldwide as at FYE 31 Mar 05

Continued momentum of outsourcing trend for pesticides by MNCs

More than 90 customers in 38 countries

Sold to technical grade pesticides manufacturers

Sold to pesticides formulators

Small Packing

Bulk Packing

Sold to institutional customers

Sold to retailers, dealers or directly to farmers

Pesticides ManufacturingPesticides Manufacturing

Financial PerformanceFinancial Performance

1Q FY2006

219.9 177.1

644.9

430.3

0

400

800

1,200

1QFY05 1QFY06

ExportDomestic

Rs’m

RevenueRevenue

607.4

864.8

Growth in revenue from both export and domestic divisions

42%

Export: 75%

Domestic: 25%

Revenue Breakdown (1Q2006)Revenue Breakdown (1Q2006)

Export sales up 49.9% to comprise 75% of revenue (1QFY05: 71%)

Domestic sales up 24.2% to comprise 25% of revenue (1QFY05: 29%)

Agrochemicals

56%

Pigments42%

Others2%

Pigments sales up 30.2%

Agrochemicals sales up 55%

By Business Divisions

By Geographical Markets

Revenue Breakdown (1Q2006)Revenue Breakdown (1Q2006)

North America: 26%

South America: 6%Africa: 5%

Asia (excluding India): 12%

Australia: 2%

Europe: 24%India: 25%

By Continents

ProfitsProfits

Margins (%) 23.8 22.7 8.1 8.9

144.6

195.5

0

50

100

150

200

1QFY05 1QFY06

Gross ProfitRs’m

+35.2%

49.3

77.0

0

50

100

150

200

1QFY05 1QFY06

Net ProfitRs’m

+56.1%

Increase in cost of raw materials from rise in crude oil price as well as copper and aluminum prices.

Distribution expenses rose 36.5% to Rs 69.8 m from Rs 51.1 m from increase in freight clearing forwarding and packing costs.

Balance Sheet HighlightsBalance Sheet Highlights

104 days

150 days

9.06

1503.2

78.6

528.1

1001.9

30 Jun 04 (1QFY05)

78 days

144 days

10.81

2,170.5

54.9

552.0

1,308.2

31 Mar 05 (FY05)

99 daysInventory turnover

139 daysDebtors turnover

11.21NTA per share (Rs)

2,248.9Shareholders’ equity

106.7Cash & bank balances

724.5Inventories

1,324.9Trade receivables

30 Jun 05 (1QFY06)

(Rs’m)

Segmental Financial ReviewSegmental Financial Review

Pigments Division

Revenue: PigmentsRevenue: Pigments

275.9359.1

0

100

200

300

400

500

600

1QFY05 1QFY06

Export and Domestic sales comprise 76.1% & 23.9% of 1Q pigment revenue

Export sales rose 18.5% due to higher sales of Pigment Green 7, Copper Phthalocynine Crude, Alpha Blue and Beta Blue

Domestic sales grew strongly by 89.4% due to expansion of customer base in India

Rs’m

+30.2%

Gross Profit: PigmentsGross Profit: Pigments

71.187.2

0

50

100

150

200

1QFY05 1QFY06

Rs’m

+22.6%

Margins 25.8% 24.3%

0%3000Hysol-P

600

3600

600

7200

1200

Installed Capacity

(MT per annum)

16%

82%

96%

127%*

83%

1QFY06

Pigment Additives and Pigment Blue 60

Beta Blue#

Alpha Blue

CPC Blue

PG 7

Capacity Capacity UtilisationUtilisation: Pigments: Pigments

*Usage of hysol-P capacity to manufacture the additional CPC blue orders

# Additional capacity of 600MTA begun commercial production from 1st April 2005

Segmental Financial ReviewSegmental Financial Review

Agrochemicals Division

314.0

486.6

0

100

200

300

400

500

600

1QFY05 1QFY06

Revenue: AgrochemicalsRevenue: Agrochemicals

Export and Domestic sales comprise 72.4% & 27.6% of 1Q agrochemical revenue

93.5% increase in export sales due to higher sales of Acephate Technical, Cypermethrin Technical, Chlorpyriphos Technical, Permethrin and Alphamethrin in new markets with more registrations

1.7% rise in domestic sales due to higher sales of Chlorphyriphos and MPB in India

+55%

Gross Profit: AgrochemicalsGross Profit: Agrochemicals

72.3

106.5

0

50

100

150

200

1QFY05 1QFY06

Rs’m

+47%

Margins 23% 21.9%

1 January 20061000CMAC*

67%

240%

39%^

112%

166%

87%

96%

1QFY06 Additional Capacity (MT per annum)

Agro II unit : Ankleshwar

Agro I unit : Chharodi

1500#Chlorpyriphos

60Alpha Cypermethrin

1000Permethrin

900Cypermethrin

1200Acephate

750CMAC/CMA*

750 MPB / MPBA*

Date of commercial production

Installed Capacity(MT per annum)

^ Part of production capacity used to manufacture Acephate

# Includes additional capacity of 700MT per annum following completion of trial production in Nov 2004. First full-year contribution expected to have positive financial impact in FY2006

*Intermediates used as captive consumption to manufacture value-added products such as Cypermethrin, Permethrin etc….

Capacity Capacity UtilisationUtilisation: Agrochemicals: Agrochemicals

Outlook & Business StrategiesOutlook & Business Strategies

Meghmani Organics Limited

Industry Prospects: PigmentsIndustry Prospects: Pigments

Global demand likely to increase 6.4% per year to US$5.5 billion by 2006

Continual expansion of key user markets – printing ink and coatings which account for about 80% of total demand

Trend in printing ink and coatings markets towards products thatfeature higher pigment loadings

Increasing outsourcing opportunities in India

India as an important source of direct supplies to the US, Europe, Central and South America and Japan

Industry Prospects: AgrochemicalsIndustry Prospects: Agrochemicals

Robust agrochemicals growth with sales up by 12.6% to US$32.2 billion in 2004

Growing demand for Organophosphorous, Synthetic pyrethroid & neonicotinoid insecticides compounds

Positive long term outlook for Indian market with continued expansion of economy

Increasing outsourcing opportunities in India

Outlook for FY2006Outlook for FY2006

Raw materials prices: Crude Oil and Metal

Sharp oil price increases > impact on derivatives such as Phathlic, Ortho Nitro Toluene and solvents

Rise in prices of copper & aluminium

Stabilisation of Chlorine gas and Caustic

Market prices

Recovering sales price of certain pigment & agro products

Outlook for FY2006Outlook for FY2006

Measures to protect profit margins

Continuous price negotiation efforts to pass on increase in raw material costs to customers :

a market-dependent processdifficult to predict price adjustment period

Improve management of raw materials

Manage currency exposure to retain benefits of increase in our product selling prices

Growth Strategies: PigmentsGrowth Strategies: Pigments

Continue to expand production capacity Shifting from blue crude supplier to a high margin and technology oriented pigments like alpha blue or beta blue

Raised production capacity of Beta Blue by 600MT per annum to 3600MT per annum in 1Q

Additional capacity operational from 1 April and expected to have a financial impact in FY2006

Continue to expand product range Hysol-P CPC Blue samples approved by overseas customers and undergoing commercial discussion

Started production of Activated Blue Crude at Hysol-P facility

New production line for Pigment Additives commenced in 1Q FY2006.

Growth Strategies: AgrochemicalsGrowth Strategies: Agrochemicals

Continue to expand production capacityAnkleshwar plant:

Increased production capacity of ChlorpyriphosIncrease total production of CMAC by 1,000 MT per annum (Commercial production expected to commence in January 2006)

Registration of agrochemical products in overseas marketsObtained a total of 13 registrations for agrochemical products in the first quarter of 2005 in 8 countries including China

Has a total of 43 registrations worldwide and 89 CIB registrations in India till date.

226 registrations are under process at various stages in 61 countries

Continue to expand product range Develop manufacturing processes for off-patent generic pesticides

Continue building our global sales and distribution network

ConclusionConclusion

Meghmani achieved a record set of results in 1QFY2006

Impressive top and bottomline growth

Revenue up 42.4% to Rs 864.8 m

Net profit up 56.1% to Rs 77.0 m

Healthy profit margins despite continued cost pressures

Gross margin 22.7% and net margin 8.9%

Strong sales in July

Thank YouThank You

Question and Answer Session

38.00 38.00 40.00 40.56 40.67 37.93 25.97 Ortho Nitro Toluene

2,750.00 2,750.00 2,500.00 2,240.48 1,828.35 1,492.40 788.64 Ammonia Molybdate

122.00 120.00 120.00 127.35 130.14 142.17 114.62 Cuprous Chloride

14.00 14.00 14.00 14.49 13.18 11.31 8.93 Urea

42.00 42.00 48.00 44.67 46.83 40.25 33.71 PhthalicAnhydride

162.00 156.00 142.00 138.24 129.13 129.48 120.86 Copper Scrap

Price/KgPrice/KgPrice/KgPrice/KgPrice/KgPrice/KgPrice/KgParticulars

Jun- 05Apr- 05Mar- 05Dec- 04Nov- 04Oct- 04Apr- 04

Pigments Division Pigments Division ––Raw Material PricesRaw Material Prices

Price trend of primary raw materials used at Panoli Plant

Agrochemicals Division Agrochemicals Division ––Raw Material PricesRaw Material Prices

436.50 46.00 37.00 660.92 -1,200.00 1,757.00 Jul- 05

436.50 46.00 37.00 --1,200.00 1,768.00 Jun- 05

472.50 53.55 40.00 650.00 1,715.00 918.75 1,995.00 Apr- 05

472.50 47.25 31.85 -1,811.00 918.75 2,002.87 Jan- 05

472.50 -30.72 -1,806.00 918.75 1,911.00 Oct- 04

472.50 60.11 28.90 -1,837.50 908.25 1,963.50 Jul- 04

472.50 37.80 28.70 511.35 1,764.00 908.00 1,985.00 Apr- 04

($/MT)(RS/KG)(RS/KG)($/MT)($/MT)($/MT)($/MT)

ThionylCloride

Acetic Anhydride

Carbon TetrachlorideC-9

Di-ethyl Thiophosphoryl

Chloride

IsoButylene

DimethylPhosphoro

Amido ThioicAcid

Paw Material / Month-Yr

InorganicPetroluem Base

meghmani organics limited · 2016-11-28 · meghmani organics limited 1q fy2006 results briefing 26...

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