Balaji Amines Limited (530999) Earnings Call Transcript & Summary

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Thank you, Janice, and good afternoon to all of you. On behalf of Edelweiss Professional Investor Research, I welcome you all to the Q1 FY '21 Earnings conference Call of Balaji Amines Limited. We have with us today Mr. Ram Reddy, Promoter and MD of Balaji Amines Limited. I would like to request Mr. Ram Reddy for his opening remarks, post which we will open the floor for Q&A. Over to you, sir.

Thank you, Swarna. Ladies and gentlemen, a very good evening to all of you, and welcome to the conference call to discuss the financial performance of the Q1 financial year 2021 update our company, Balaji Amines Limited. I hope you are all keeping well in this unprecedented and difficult times. I believe that you would have got a chance to go through the press release, the investor presentation and financial statements submitted to the stock exchange and uploaded on our website. Let me take you through the stand-alone financial and operational performance. We recorded a total revenue of INR 213 crores in Q1 FY '21 as against INR 234 crores in the corresponding quarter of previous year. The dip in revenue was on account of suboptimal capacity utilization at about 70% and 80% in the months of April and May, respectively, due to the COVID-19-led disruptions. However, since the beginning of June 2020, we are operating at pre-COVID levels. Total volumes stood at 18,306 metric tons for Q1 FY '21 as against 20,149 metric tons in Q1 FY '20. For Q1 FY '21, volumes of Balaji Amines stood at 4,153 metric tons. Amines derivatives volumes stood at 8,277 metric tons, and volumes of Specialty Chemicals stood at 5,876 metric tons. EBITDA came at INR 54 crores in Q1 FY '21, up by 36% as compared to INR 39 crores in the same period last year. We recorded EBITDA margin by 25% in the current quarter versus 70% -- 17% in Q1 FY '20. The increase in EBITDA margin was on account of better product mix and steady raw material prices. Profit after tax witnessed a growth of 74% at INR 35 crores in Q1 FY '21 as against INR 20 crores in the same quarter last year. Profit after-tax margin stood at 16% vis-à-vis 9% in Q1 FY '20. Diluted EPS for Q1 FY '21 stood at INR 10.70 per equity share. Coming to the performance of the subsidiary company, our sales were not affected, as we had sufficient finished inventory in the month of April and May and the operations have started at pre-COVID level since the first week of June 2020. The sales of the subsidiary company stood at INR 23 crores in Q1 FY '21 and recorded EBITDA of INR 2 crores. We are currently having a sales run rate of about INR 8 crores to INR 10 crores per month, and we expect a gradual ramp-up in volumes in coming quarters. We expect the operating margins to scale up once the operating leverage kicks in. It is important to note that the prices of finished products as well as raw material of the products manufactured by our subsidiary company have fallen. We have completed CapEx of about INR 80 crores in our 90-acre greenfield project out of the total cap of INR 150 crores and expect to commission the production of Ethylamines by the end of this financial year. Currently, there is a supply shortfall of Ethylamines of about 9,000 metric tons per annum in India, which is met by imports. It is expected that this supply gap is likely to increase to 15,000 tons per annum coming 2 years' time. We would be well positioned to address this opportunity of increase in domestic demand. We are currently manufacturing about 9 tons per day of Acetonitrile. We expect to undertake debottlenecking after 2 months once we resume the critical equipment, which were delayed due to COVID-19-led disruptions. Post debottlenecking we envisage to gradually ramp up our production to about 18 tons per day. We expect the demand for Acetonitrile to remain elevated as it has emerged as preferred solvent by various end user companies as compared to other solvents. Also Pharmaceuticals companies are preferring our Acetonitrile, which is produced via direct route of acetic acid and ammonia, as the quality of the product manufactured through this process is much superior to that produced by the indirect route, the byproduct of Acetonitrile. This prospect of Agrochemical sector have brightened as agriculture has emerged as a bright spot and a much dynamic with highest storage across reservoirs over the last 5 years, coupled with good monsoon rainfall, leading to more acreage under cultivation. Also demand for our certain products like Acetonitrile, DMF, NEP, DMA and DEA is likely to increase, as their intermediates for drugs required for COVID-19 treatment. We expect better volume uptick in the coming quarters, as the demand from end user industry is likely to remain robust. So that's all from our side. We now leave the floor open for question and answers.

[Operator Instructions] We take the first question from the line of Nilesh Ghuge from HDFC Securities.

Yes. Congratulations Ram, sir, for a good set of numbers. Yes. Sir, my first question, as you said in your opening remarks that there is a robust demand for Acetonitrile. And you are going ahead with the expansion, and it will be completed by end of this financial year. So can you just throw some light on the pricing scenario as of now? And what is the breakeven point for you as far as Acetonitrile is concerned?

Mr. Nilesh, it's not an expansion. I mentioned clearly it is a debottlenecking, adding some movement going from the 15 to 18 tons from the existing 9 tons per day. The prices, as of now, they are rolled at between INR 250 to INR 270.

Okay. And sir, in our press release and also in the opening remarks, you mentioned that we are able to get the good EBITDA margin because of change in product mix. So -- but if I look at the volumes, then you are -- the significant -- there is a significant drop in Specialty volume, if I look at the quarter-on-quarter numbers compared to other products, like amine solution and amine derivatives. So can you just throw some light on that why the EBITDA margin had gone up though you adjust your specialty volume, has gone obviously…

Major -- dear Nilesh, there was about 2,000 tons short in the volume, if you take I think, down total 18,000 tons all put together in this quarter volume basis. And during that period, when I mentioned 70, 80, probably in that 70, 80, only high-margin products might have a higher level capacity. So this short of 2,000 tons may not be those products, which are at high-margin products.

The next question is from the line of Amar Maurya from AlfAccurate Advisors.

Congratulations for a very good set of numbers even in this kind of tough environment. Sir, I have a first question, what would be, sir, ACN contribution in this particular quarter?

It's very difficult to say a particular product. But as I said that we were producing 9 tons per day, approximately.

Okay. Okay. And sir, this -- going from 9 tons to 18 tons, when -- sir, when you say end of the year, so basically, major revenue should come in the next year?

No. At the end of the last quarter, it should be -- there should be some contribution in the last quarter for this difference quantity.

Okay. Okay. And secondly, sir, expansion of projects like our Ethylamines project, which we are expecting to get finally commissioned in fourth quarter. That is on the track.

Yes. Definitely, by end of the year, we will see the production coming out for the Ethylamines.

Okay. And for DMC also?

It will take some time, maybe another 1 or 2 quarters will take, that we are taking up first, this product in the table. The next -- we may take another 6 months -- 3 to 6 months' time, maybe second quarter of next year.

Okay. Second quarter. So basically, DMC should come in the second half of next year?

Yes, approximately.

The next question is from the line of Pritesh Chheda from Lucky Investment.

Sir, there is a marked improvement in the -- per unit EBITDA, which we see sequentially on Y-o-Y. So just a couple of questions here. First, how would have been the Acetonitrile volumes increasing Q-o-Q? So is there a case where we see Acetonitrile volumes are increasing and you have reached full capacity in quarter 1 in terms of utilization? And second, these EBITDAs would have some benefit from lower ammonia and petrol prices also?

Yes. See, SCM, probably, you may be right to some extent. Because this quarter, I think, a full 9 tons their operating quarter-on-quarter. Last year may not be -- it was on and off operations. And it's not the lower, but it has a stable raw material prices. This time, what we could see the entire 2 quarters, we have seen the stable in the raw material prices like methanol and ammonia. It was playing between INR 16 to below INR 20 only. So that is also another reason. And because of the product mix, some of the products, which might have run full capacity even this -- during the COVID-19 disruptions, so that could be also some reasons.

Okay. My second question is on our existing setup, which we have in the stand-alone. What is the peak volumes possible on that setup with all products put together? So what we do at about 18,000 to 20,000 or 22,000 quarterly which we see?

It should go 100,000 tons.

100,000. And lastly, on your subsidiary side, this INR 8 crores to INR 10 crores per month revenue run rate, which you're talking about, here, what will be the peak revenue run rate and the margin that you would attain at the peak revenue run rate? And which of -- will it happen this year? Or do you think that is possible next year?

This will depend upon the raw material and finished product prices. With the present situation, it will…

You can take an ideal situation in.

Ideally, we -- RM prices and consumer product prices not -- depends on -- it depends upon the market. We cannot expect what is going to happen in the next quarter. So with the current situation, it should go to minimum of INR 15 crores -- INR 12 crores to INR 15 crores from the second half. After a quarter, it should go minimum INR 12 crores to INR 15 crores per month.

That's the peak?

Peak, see, when we originally planned that time the end product was about INR 150 to INR 160. If that prices we take suppose as a benchmark, then it will go definitely total around INR 400 crores annual turnover.

Okay. And the margin on that?

Margin is very difficult to say. That depends upon the competitor's play, how they play -- how they allow us to play.

And versus that realization originally thought realization, where are the realization today? Are they down 20, 30?

Again, I'm telling the same thing. Original price when we have done the DPR, Detailed Project Report, we have taken INR 150 to INR 160 for the finished product -- some raw material prices were -- some main raw material that was somewhere INR 90, INR 95. Today, that raw material come down to INR 60 to INR 70 and finished product has come down to INR 110 to INR 120.

The next question is from the line of Sachin Kasera from Svan Investment.

Congrats for a good set of numbers. Just a follow-up on this question regarding subsidiary. So you said that because of the volatile prices, the turnover can go up and down. So you could give us some sense when you say INR 10 crores -- INR 8 crores to INR 10 crores per month visibility you're having, can you just transfer that in terms of tonnage so that could give us a better idea how the utilization is moving up?

See, current utilization was INR 8 crores to INR 10 crores to date with the current prices. It is about 25% of the utilization. I'm expecting by mid and after mid of the current financial year, we should cross 42%, 45% capacity.

By September, October, we should be between 40% to 50%.

40% to 50%. So that time, it should go beyond INR 15 crores -- INR 10 crores to INR 15 crores, assuming the current raw material prices and finished product prices.

Sure. And that 40%, 50% utilization, will you start to breakeven, sir?

Yes. Sure, if things goes like this.

Sure, sure. Secondly, sir, how do you see the volumes for the full year? This quarter, we had a net of 18,000 tons. But now that you are working at full capacity and the demand outlook is also good, so what is the type of volume as of now you sense that you can do for the full year?

Yes. We see -- as I mentioned, if we do the total 95% capacity utilization without interruption, we should do minimum 24,000 tons of volumes per quarter.

Okay. And at least for Q2, you see that type of visibility at least between 22,000, 24,000, we should be able to achieve it?

We should do minimum 22,000 tons.

Very good. Sir, one question regarding the segmental numbers. So we see a loss of around 1.5% in your CFL division. We had thought that you had almost winded up that operation. So…

See, what has happened in that, we are having -- if you see the early papers, we have a closing stock of the bulbs, almost INR 12 crores to INR 13 crores. So that -- you have seen some revenue also, INR 10 lakhs to INR 15 lakhs. We just started selling whatever possible. We are trying to encash these things. While encashing, the prices come down. So then we are forced to revalue that. So the difference of revaluation of the closing stock has come to that INR 1 crore less to be comparative. There's no any operations.

Okay. So basically, it's a revaluation of inventory that has caused this loss?

Yes. We have to complete this solvency whatever closing stock we have the bulbs.

So every quarter you revalue inventory as market are realizable and then also do that.

And second thing, we hope one positive thing I can tell you, maybe from the next quarter, we have given the warehouse from the multinational and then probably we'll get some revenue, 10 to 15 -- maybe INR 10 lakhs per month. We may get the revenue from the next quarter, maybe October, November onwards, we should get that revenue from that debt property, I can say.

Sir, how much inventory is now left as per the books? And is there possibly any further loss in that inventory? Or you think more or less you have booked all the possibilities?

See, that is only possible when we sell the entire thing. Inventory is starting at INR 12 crores, is there.

Okay. Okay. And sir, this CapEx, you think this year remaining, you'll able to fund internally? Or you will have to take some borrowings?

No. We will be doing internally. We've already made a provision. Maybe another INR 70 crores is required for this first phase. We have that inflow inside, internal inflows, we are already having. We don't need any finance, at least for this Phase 1.

Sure. And sir, last question, DMF. Can you update us how both -- basically, how your current market, you had last time mentioned it improved a little bit. And secondly, what is the movement on the antidumping side there?

Antidumping, I'm sorry, because there is no permanent officer placed on the particular post. So we are facing a lot of problems. You are well aware that we are fighting for the past 3 years for this, but I'm helpless and we cannot blame anybody. It is our bad luck, I can say. One side, we are talking, the government is talking after everybody knows what we are talking. But other side, we are facing these problems. But luckily, some positive in that. The prices are not that worse what we have seen earlier years. Presently, it is quoted somewhere INR 70, INR 75. So that is sustainable. Even if we don't get antidumping also, it is good. Something is adding to the bottom line.

And our breakeven is INR 60, INR 62, sir, currently also?

For DMF, you're talking?

Yes, sir.

Yes.

[Operator Instructions] The next question is from the line of Jatin Damania from Kotak Securities.

I just a follow-up on this DMF. Sir, I mean, if you have seen an improvement in the realization on the sequential basis, have you seen improvement in the overall capacity utilization also? Because in last year -- last quarter, we were working at 20%, 25% utilization in DMF. So what is the current run rate that we are doing now?

Jatin, what we are doing is, DMA is also is consumed in big way. In this last 1 quarter, we have seen in big way. So when we are getting better realization in the DMF, we are preferring in DMA. If one thing is lesser than what we are getting in DMA and the DMF, we are strict to be choosy in the customers. If some -- if people are not giving the price what we are offering and we are not going for the capacity utilization of the DMF.

So is it true that DMF still operating at 30% only?

A little more.

And what will be the margin difference between DMF and DMA? Because as you said, that INR 60 to INR 70 will be a breakeven and if price of INR 70, INR 75 on the higher side, you will be doing a EBITDA per kilo of INR 13. But was it the same case for DMF?

DMF, sometimes, we are getting INR 80 also.

INR 80. So currently, it's around INR 80?

DMA, it's also, sometimes, we are getting INR 78 to INR 80. At that time, then it will be attractive. Rather than making DMF, selling the DMA will be attractive. So these are the level play we are doing time being.

What is the variable -- I mean, the breakeven of DMF -- for DMA?

Can you repeat?

Breakeven for DMA?

DMA, I cannot say that. It's a little confidential thing.

Okay. Okay. And sir, secondly, coming to your subsidiaries, now you are saying that you have sold an inventory in the first 2 quarters. So do we -- have we actually signed the contract with the agrochemical -- domestic agrochemical companies or we are yet to sign?

No. This is quantity, we have signed. We've got the assurance for the quantities. Pricing, we are to discuss in time to time basing on the raw material prices.

Okay. So what is the total quantity that we will be dispatching in this financial year?

This financial year, we have a minimum 12,000 to 15,000 tons. Right now we see this visible of 12,000 to 15,000 tons.

The next question is from the line of Kishan Gupta from CD Equisearch.

So I want to understand like how much of your annual revenues would come from new products over the next few years?

Which of the new products you're asking?

So I'm asking what is your new product pipeline for the next few years?

See, there isn't a new -- nothing new product. It's all product expansion only. The greenfield project, what we are the presently in the construction, which I'm talking about, will go for the production from the last quarter of the current year. We are adding 16,500 metric tons of Ethylamines. That depends upon how much we utilize, and the product price with the current quote at INR 120 per kg. So you can just calculate what will be the -- all those things. And second thing is maybe another quarter or 2 quarters' time, the second product is the DMC, which is, again, we'll be making about 10,000 tons capacity. And that is also quoted between INR 130 to INR 140 per kg.

And what is your monoethylamine capacity rate of utilization?

Right now, we are using 70%, 75%.

So if I see your Specialty Chemicals, I think, sir, your total capacity is some 80,000, if I'm not wrong?

I don't know. That depends which are the chemicals you are considering specialty and which I'm considering the different. Some of our products companies consider it as a solvent, and somebody as intermediates and somebody as a specialty. So as a whole, all the products together, we have 100,000 tons capacity currently without talking about this new expansion.

100, 000 tons. And do you have any sort of operational integration between your various divisions like Amines and Specialty Chemicals?

Yes, definitely. If you go through -- some of the amines are used for producing the Specialty Chemicals as raw material. Some of the Intermediates are produced by using the amines. So like that majority of the products we have in-house -- I think I can say backward and forward integration.

About raw material procurement also, do you have -- or the teams are separate or the teams are common of both the divisions?

We have separate.

Separate teams of both the divisions?

Yes.

The next question is from the line of Rahul Jain from Credence Wealth.

Hello? My questions have been answered. Thank you so much.

The next question is from the line of Pavan Pandit (sic) [ Kavan Pandit ] from Latin Manharlal Securities.

Congratulations on a very good set of margins, despite not at pre-COVID levels of capacity utilization. So my 2 questions I have. First one is on EDA. Sir, we use it to produce our mancozeb as well, which is in the banned list of the 27 chemicals by the government. So I just want to understand the breakup of the EDA, how much we supply to pharma and how much we supply to agro?

See, out of total 30,000 tons of import into the country, last year, we have seen 28,000, 29,000 tons. There's about 7,000 to 8,000 tons goes into polymer and oil drilling industry and rest is going for the agro industry. There are other new applications have started maybe 1,000 or 2,000 tons. So first of all, I want to say this ban, what you're talking, this -- I don't think this will happen because the country like India cannot afford to have such a important key agrochemicals almost 29 banning at a time, it's very difficult for the country to sustain. And these type of things happening every 3, 4 years, and the industry is going to the government after explaining, and again, they are extending like this happening. And in the current year also, government has already removed the ban for the export of Mancozeb. Today, it has already removed. Only the domestic, they say, but still there's a time to give the -- get back from the industry to the government. So probably, there -- it may come something. If it is not coming also, as I said, there's about 8,000 tons domestic industry is there for the polymer and the other industry. And for the Mancozeb export is also is there because India is the biggest manufacturing hub for the Mancozeb, and it has got very good export market. So it can go at least 30%, 40% minimum will go for the Mancozeb, the EDA and exports there on.

All right. Sir, just a follow-up. Sir, would it be safe to assume that we have been in talks with clients for both polymers and exports for Mancozeb?

No, we're already doing, dear. We are already catering to those people.

All right, all right, all right.

And we are exporting also. For your information, last quarter, we exported to China also through this EDA.

Okay. So could you quantify it, if possible?

Maybe 100 tons we might have exported.

Okay. And sir, next would be, you gave a guidance of around 22,000 tons for the next quarter. And I know it's not exactly like-to-like extrapolate, but could we see a INR 250 crores to INR 260 crores of revenue in the next quarter?

Again, my dear that is, again, depends upon the finished product prices and raw material prices. So it's very difficult to say that what it will be this time. Volumes, yes, we can say that. Value is very difficult to say.

Just a flavor according to the current trend? Any idea…

It may go, yes.

In similar margins?

That is again -- that depends upon the competitors, how they will allow us to play.

The next question is from the line of Swarnabha Mukherjee from Edelweiss Professional Investor Research.

So just to understand on the volume side in the stand-alone business for the quarter, so this quarter, you have done around 18,000 metric tons and next quarter, the guidance is around 22,000 metric tons. And if things -- sorry, sir, 22,000 right?

20,000 to 22,000, yes.

Yes. If things go all like there is no further COVID-related disruptions or anything, are we looking at somewhere close to 80,000 to 90,000 tons for the whole considering another 24,000 metric tons each for the last 2 quarters of the year, would that be a correct assumption, sir?

Should. If everything goes well, there should not be any problem for the going 88,000 to 90,000 tons. But again, I can say that this first quarter, we already short of 5,000, 6,000 tons, right?

Yes. Yes. But on a normalized scenario, if things go like this, then for the second half…

There shouldn't be any problem with '20.

Okay. Okay. Super, sir. And on the margin front, sir, you mentioned that margins were higher and one of the factors were -- was product mix? And I also noticed that your per ton realization has also gone up this quarter. So I was just trying to understand, if you can give any color, at least from the realization front for which product you might have seen, is it Acetonitrile, DMF or any particular product? And if that mix that help the margin sustainable?

Swarna, it is difficult to say that's because plants like Balaji where we have a lot of integration, suppose if I sell the good price for the DMA, then the tonnage will come different. If I sell, DMF with a price, so the DMF is good, I may consume more DMA into the DMF, more consume into the DMAC, DMAE, DMA HCL. So like that, it's very difficult to understand. But yes, this time the product mix was very good, like the higher-margin products were on the peak in the quarter. So if the things go like this, it should be better. It should be good.

Okay. On a normalized basis, sir, are we sticking with our earlier margin guidance?

Yes. 2022 EBITDA's, there shouldn't be any problem.

Okay. Okay. Sounds good, sir. And sir, last 2 things. Earlier, you had given us a split of amines amine derivatives and specialty on a revenue basis. It would be great if you could share that for this quarter.

You can send the mail specifically, then somebody will definitely answer for your -- this thing. Volatility in the pricing, it was not giving proper return. That's the reason we've given in the tonnage basis, volume basis.

Okay. Okay. Okay. And sir, any update on the hotel, sir? What is the status right now?

Hotel, just the last 10 days, we have started. We -- actually, we can say this is very bad days for the hotel industry, not only with us, all over the country. The more affected is the hotel business. First closed down is the hotel and then last opening of the hotel. That is the situation today. Even today also, we are not allowed the opening the restaurants. We have opened only for the lodging and the parcel service to be opened. Probably if things improves, we may cover the expenses, if not, profit for the coming month.

Okay. Okay. Okay. So you'll be able to cover the expenses that you will be working.

Next month onwards.

Okay. Okay. Sir, any color you can give on what you see the occupancy level can be in the short term?

Currently, 15 rooms. They're are going, even today I can say 14, 15 rooms are there. If it goes beyond 20, 30, probably because we have reduced all the cost like employee cost, power cost. On a number of stages, we have reduced cost. So with this reduced expenses, even if we run with the 30, 35 rooms also, I think we should cover all our expenses because the interest is not there.

Okay. Okay. Okay. That's great, sir. And the total number of rooms, sir, if you could just remind in the hotel.

129.

The next question is from the line of Kunal Mehta from Vallum Capital.

Congratulations for a very strong -- very good result, sir. And sir, I just have one question. Now when you track the methanol price, we have seen very good volumes of methanol coming from Saudi. And the Saudi methanol is that in line or cheaper than the methanol which used to come from Iran? And secondly, sir, this even methanol prices have gone down in the last 1 year, if I compare Y-o-Y. Sir, is there a good benefit from methanol, sir, can you expect your next 2, 3 quarters?

No. See, Mr. Kunal, it is very difficult what will happen after next 2, 3 quarters. But for your first question that, definitely, it is not cheap. It is costly when you compare it to the Iranian material. But you say that Saudi, it is not correct. We are getting more material from the Qatar, Oman and other countries also comparatively. Saudi is also coming, but it's not bigger quantities. Comparatively, the Qatar material is coming in and Oman material is also coming in. On prices, yes, these are the very much favorable prices what we see between INR 16 to INR 18, INR 18.50 is a very good sustainable prices for the Indian industry.

Understood, sir. And sir, Iran -- material from Iran is coming or are there also problem, sir?

No, no. It's not coming. If that comes, then definitely there will be advantages stage because Iran material definitely will be cheaper than the any other country.

Understood, understood. And sir, any problem with any supply, sir?

Which supply?

Any -- monoethylamine for Balaji Specialty?

There is no problem. We are getting sufficient.

The next question is from the line of Amandeep Singh from AMBIT Capital.

Dundurapu Reddy, sir, press release indicates that Ethylamines shortage is expected to increase from 9,000 tons per annum to 15,000 tons per annum by FY '23. Sir, is it because the industry size is expected to grow by 6,000 tons per annum over 2 years? If not, how much industry growth are you expecting? And what's the spare domestic capacity in the industry?

See, Mr. Amandeep, I'm also like you people. You are all collecting the data. I could see the data for past 4 months. There is an import of Ethylamines coming almost 9 tons -- 900 tons per month, 800 to 900 tons per month coming from the outside country. So with that calculation, and plus there's new applications that are coming like what we have seen in the new molecules coming up. In that also, consumptions have gone up. So we are -- normal growth, we have taken 5% to 7% only. With that calculation, see, we have calculated, but it should go to 15,000 tons up to -- maybe up to 2020 to 2023.

So sir, that's helpful. And sir, recent API production and incentive scheme announced by the government includes products like metformin, where DMA HCL is used as an intermediary. Can you help us with your thoughts on it? And is this scheme in any way benefit your company and other amine manufacturers in India?

I don't think -- the benefit what we can see is the more consumption and more raw material goes, that's what I can say. But the government announced the benefit is not very clear. They say that if you go to a new location, I don't think anybody will like to go for metformin. We're manufacturing at a new facility because everybody is having the additional capacities. So I don't think anybody will get -- avail this benefit at least for the metformin.

And any other products which could benefit amine players, like yourself?

Maybe see, there are many new trucks are coming up. And their people are talking up these new intermediates to produce in the country. Earlier, like alternatively the China and import substitute. People are talking. There are many -- like if not everything that are solvents like Acetonitrile DMF, DMAC, these are used as a solvent in the many intermediates. If somebody is producing an intermediate, then definitely this will go on that. And like, as we said earlier, the amines, like methyl, ethyl, these are basic chemicals. If you take 4 products, definitely for the APIs, if you take, definitely, there are 2 APIs will consume one of these amines. So any new molecule is coming, we expect that there will be amines consumption will be increased.

Sure, sir, that's helpful. And sir, lastly, are you witnessing any reduction in pricing for Acetonitrile or do you hear any capacity additions globally for Acetonitrile?

That I have not seen precisely. But yes, prices have been [ higher ] earlier. Sometimes it went up to INR 300, INR 400, which is not sustainable. What we have seen this INR 250, INR 260 current price, I think it should sustain for some time.

The next question is from the line of A.M. Lodha from Sanmati Consultants.

Good evening, Mr. Reddy. Hello?

Yes. Good evening, good evening. Go ahead.

Sir, congratulations on good set of numbers during the [indiscernible]. I have 2 questions sir. One, what is the total debt in consolidated level? And what is the cash for cash equivalent in the stand-alone books?

See, in stand-alone, I think nothing is there. If you see the Balaji Amines, as on today, we don't have any term loan as a debt free stand-alone. And only working capital is there, that is also because we are not including working capital maybe INR 3 crores to INR 5 crores must be outstanding because the funds earmarked for the expansion. That is upcoming expense, INR 70 crores, we have to spend from the coming months, that is in the system. So that's the reason we are not using the working capital leverage today. So in another way, I can say that, today, stand-alone is totally debt-free, long term and short term.

In the last quarter, we are hearing with some reinvestment of INR 45 crores.

Where is it?

In March -- you were having the investment of some INR 45 crores in liquid or some [ mutual fund ] limits.

Yes. That is for short term because there was a delay in spending this money. Because now we have started spending the money that has now come into the system.

Okay. What is the consolidated level there, sir?

Consolidated level see, in the Balaji Speciality, there is a term loan of 3 -- we have 3 term loans, all put together around INR 130 crores is the total term loan as on today, which INR 150 crores, it has come down to INR 130 crores. And working capital, we have only INR 3 crores -- as on today, outstanding only INR 2 crores. INR 3 crores.

In Specialty Chemicals?

Yes, Speciality.

Okay. Sir, can you just give me a broad idea, how much production we have lost during the low capacity utilization of and 80% in the month of April and May production in tonnage approximately?

It is visible. You can see, March, we have done 21,000 tons March quarter. And this quarter, we have done 18,000 tons. That means 2,000, 2,500 tons we lost. Even if you take the normal capacities, also, if you take, about 2,000 to 2,500 tons we have lost last in those April and May. And come to the normal level. And even now it -- all the plants are in the normal level.

The next question is from the line of [ Rajeev Repani ], individual investor.

Yes, Mr. Reddy, congratulations on good set of numbers. Sir, my -- I have a follow-up question on Acetonitrile. Sir, much earlier, I think in May 2019 con-call, you had informed us that we have environmental clearance for 19,000 tons of Acetonitrile. By doing INR 1 crores to INR 2 crores investment, we can increase the capacity. So I'm slightly disappointed, if the prices of Acetonitrile have fallen since more than a year, why didn't we ramp up and make more Acetonitrile? Or why the delay in increasing the capacity?

See, a very good question, [ Rajeev ]. Even we dreamed, what you said, we dreamed, we should do that. But see, originally, we thought that 19,000 tons what you said is, it's a licensed capacity, I can say. We have a license to go up to 19,000 tons per year. And when we have originally planned that we -- some of the -- I explained earlier also, some of the commercial plan that we should produce 25 tons per day. But while doing it practical manufacturing that we come across some of the capacities came into shop. Like some distillation, you can do up to 25, 30 days -- 30 tons per day even today also. And some reactor capacity has come down because of the product nature because when we entered first time any product, when you do the practical only, you'll understand. So what to be concluded that by adding some debottlenecking, like small reactor section and some other equipment, then we should be in a position to go to 9 tons per day, we can do it, 15 to 18 tons. I was talking last quarter also, we may go in next 2, 3 months. Because of this COVID-19, those equipments which we ordered are getting delayed, and we are expecting to come those in line, maybe October, November. Even I don't think even if it comes today, we don't want to do immediately because we need to stop the plant for 2, 3 weeks for that purpose, which market is not allowing today situation.

Okay, okay.

And let me finish. This will be -- maybe by last quarter, we will -- you will see the 18, 19 tons, whatever I'm talking. Then once we go in practical, then we will understand. It may around 18 tons, maybe it may go to 20 tons also, it may go to 15 tons also. After that, if situation goes, as I said earlier, we are thinking of separate, which will be multipurpose, either you can make THF or you can make Acetonitrile. Again, I'm not fully depending on the Acetonitrile. If something goes wrong with the Acetonitrile, everybody is increasing and if the prices comes down, then we should not land in a problem by investing the money in a separate plant. That's the reason we are thinking of going for a multi-plant.

Got it. Sir, just for further clarification, THF, we would be the only one producing THF in India?

Yes. As in today, we are only, nobody there. Everything is coming from outside the country. Almost 10,000 to 12,000 tons consumption is there in the country. Again, that is also as a one of the sophisticated solvent, I can say. It's both in the API manufacturing.

Great. And sir, one -- a follow-up question on DMF. If we were to get the antidumping duty, what would be the capacity utilization there?

We are doing more than that. Earlier, we used to do 20%. Now -- this year, I'm expecting it should grow more than 30% with this pricing. If the prices goes down, then, again, we will have to choose in selling the DMA rather than going for the DMF.

Okay. And sir, DMA-HCL, do we have approval for additional 7,500 tons? So when do we plan to start making it?

That we will see. If market demands, definitely, we'll go for that. There also, we have little additional equipment only because we have the -- majority of the equipment is already there in the line. So we add some equipment because, presently, we are already doing 22,000 to 23,000 tons capacity we are having on our annual capacity.

So if that goes full…

See, 1 month, we cannot see Mr. Rajeev, everybody thinks that this month is very good, why you are not doing. For every product, as an industry, as an investment, what we will see is at least 6 to 9 months table, even 1 year also. Then we understand this is a natural growth, then we go for an investment for that particular product. So here also DMA-HCL is the same thing. We have not seen that continuous -- this quarter, if I say 23 this month, if I say, more than 2,300 tons, next month, it is going on 1,700 tons, 1,800 tons. So that is not good with this thing -- natural growth.

[Operator Instructions] Next question is from the line of Anupam Agarwal from Lucky Investment.

Congratulations on great set of numbers. I just had one question on the volumes. In this quarter, we've done about 18,300 tons. I just wanted to understand if -- are there any spillover volumes from the last quarter or in the last week of March?

No. Last week, there may be 3, 4 days. We might have lost because March -- end of March, the lockdown have started. But actual lockdown was April, May, we were facing some problems in the -- not exactly with the plant and the production, there was indirect problems like logistics, truck movement, finished product movement and the raw material movement was restricted during these 2 periods like April and May. That was the reason that was -- we could utilize only 70% to 80% those 2 months.

Right. So basically, there is no spillover volumes from last quarter. This is full this quarter volumes?

Yes.

The next question is from the line Amar Maurya from AlfAccurate Advisors.

Sir, as you indicated that this year -- this quarter also, you were followed to buy almost around 2,000 metric tons. So -- and given that now the supply issues from the global players, largely for the import, do you see some improvement in the pricing also, along with the volume growth?

No. It has already improved. Price, what we have seen this quarter, prices are in a very much improved situation only. I don't think that we need any other improvement. Now the thing is capacity utilization only.

Okay. Okay. So sir, then, in that case, basically, on a full year basis, even if we do 90,000 metric tons also, then what would be the kind of revenue growth we'll be landing with something like a single-digit kind of a growth?

Again, I will tell you because that depends upon the raw material prices and the finished product prices.

Okay. Okay.

That's the reason we are talking about the volume, not value, right?

Yes. Because what I understand here is that at max, we can do 90,000 metric tons, right? And only 1 quarter has gone by. So basically, the single-digit kind of a volume growth, so ideally, the prices has to go up for us to deliver the revenue growth. So that is the reason I'm asking. Do you see that from here on?

See, for the year 80,000 to 90,000, we are talking the volumes. And second thing, wherever your thinking new thing will come because new expansion, it is in the construction, which is coming in the next year.

Yes, yes, yes.

The thing is what we are having that has to come, whatever we have done, that will come only. Nothing new thing. If the prices -- raw material prices goes up, Acetonitrile goes up, then definitely, revenue will be up.

We take the next question from the line of Sachin Kasera from Svan Investment.

Yes. Sir, just one question. You mentioned regarding Acetonitrile that once this debottlenecking is stabilized, you will go for a flexible plant. So how much amount we need to spend? And what much time it will take to commission that new plant?

There's 2 things of that. Again, I will tell you, Mr. Sachin, once we understand the prices will be stable like this, then only the new thing will take in place. So it will not take more than 7 to 8 months' time for us because of the experience with the existing client.

And how much amount we have to spend, sir, for that? And what will be the capacity?

Maybe INR 40 crores, INR 50 crores. INR 50, INR 60 crores maximum.

And it 18 tons per day, we'll be able to achieve with that or it has to be more?

Should be, should be. Because that other thing when we will understand that second plant definitely will be much better positioned because, here, we will understand what are the lacunas, what are the debottlenecks in the first year. So all those things will happen. We'll think once this we'll complete this debottlenecking, then we will understand how much we'll get here and what we are going to do there.

Sure, sir. Secondly, on this new greenfield projects, sir, currently, what is your sense next year. You should be able to put us at least 10,000, 12,000 tons from this new greenfield?

We should, minimum.

And based on the last 3, 4 quarters of experience that you run the subsidiary company, now is there more confidence that next year we should be able to produce at 75%, 80% utilization FY '22?

Definitely, definitely.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for their closing comments.

Thank you. At Balaji Amines, we have created a sound hedged portfolio of products for the years. Balaji Amines, we have systematically made investments in more specialized products by capitalizing on technological innovation and drive organic growth. Much of the organic growth has come from our focus on specialty derivatives of existing products. We are continuously striving to better our product portfolio to compete effectively and effectively in the end markets. In FY '21, we expect significant contribution to flow in from the subsidiary company. We are very focused on next level of growth and upscale for Balaji Amines over the next 3, 4 years. Thank you very much. Thank you again.

Thank you. On behalf of Edelweiss Professional Investor Research, that concludes this conference. Thank you for joining. You may now disconnect.