Balaji Amines Limited ($530999)

Ladies and gentlemen, good day, and welcome to the Balaji Amines Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Gagan Dixit from Elara Securities. Thank you, and over to you, sir.

Yes. Thank you. A very warm welcome to everyone to discuss Balaji Amines Q4 FY '26 results. It is our pleasure to be able to bring to you the management of Balaji Amines Limited, led by Mr. D. Ram Reddy, who is Managing Director. We would also like this opportunity to congrats the management on its excellent set of numbers. So with these words, I would now hand over the conference to the Balaji Amines management. Over to you, sir.

Thank you, Gagan. Good evening, everyone, and a warm welcome to Balaji Amines Limited's Earnings Conference Call for the fourth quarter and the financial year ended March 31, 2026. I hope all of you have had an opportunity to go through our financial results, press release and investor presentation, which have been uploaded on the stock exchange and on our company website. Financial year 2026 was a year of steady performance for Balaji Amines. Despite certain external challenges during the year, the company was able to maintain operational stability, improve profitability and continue progress on strategic growth projects. The performance during the quarter was supported by stable demand across the key segments better operating performance, improved cost absorption and continued contribution from our integrated manufacturing model. Coming to the consolidated financial performance for the quarter, our total revenue for Q4 FY '26 stood at INR 403 crore as compared to INR 361 crore in Q4 FY '25, registering a year-on-year growth of around 12%. Our consolidated EBITDA for Q4 FY '26 stood at INR 102 crore as compared to INR 68 crore in Q4 FY '25. EBITDA margin for the quarter stood at 25% compared to 19% in Q4 FY '25 and 18% in Q3 FY '26. The improvement in margins was mainly supported by better operating leverage, stable raw material conditions, prudent inventory planning, improved cost efficiencies and a favorable product mix. Profit after tax for Q4 FY '26 stood at INR 65 crore compared to INR 40 crore in Q4 FY '25 and INR 31 crore in Q3 FY '26. Diluted EPS for the quarter stood at INR 19.99 per equity share compared to INR 9.49 per equity share in Q3 FY '26. On a stand-alone basis, Balaji Amines continues to remain a zero-debt company, which reflects our strong financial discipline and prudent approach towards capital management. Moving to the full year performance. Consolidated total revenue for FY '26 stood at INR 1,454 crore as compared to INR 1,430 crore in FY '25. Consolidated EBITDA for the year stood at INR 294 crore as compared to INR 265 crore in FY '25, registering a growth of around 11%. EBITDA margin improved to 20% in FY '26 from 19% in FY '25. Consolidated PAT for FY '26 stood INR 169 crore as compared to INR 159 crore in FY '25, reflecting a growth of around 7% PAT margin for the year stood at 12% as against 11% in FY '25. Our consolidated balance sheet continues to remain strong. As of March 2026, consolidated network stood at INR 2,152 crore as compared to INR 2,018 crore in March 2025. Consolidated debt stood at INR 133 crore, mainly on account of ongoing expansion related activities. During FY '26, the company generated INR 184 crore of net cash from operating activities. Cash flow from investing activities stood at negative INR 344 crore, reflecting investments towards ongoing growth projects. On the operational front, total consolidated sales volume for Q4 FY '26 stood at 27,341 MT as compared to 25,871 MT in Q4 FY '25. Within this amines volume stood at 7,746 metric tonnes. Amines derivatives value stood at 8,935 metric tonne and specialty chemicals volume stood at 10,660 metric tonnes. Overall volume remained stable, supported by consistent demand across key end user industries such as pharmacicals, agrochemicals, solvents and other specialty chemical applications. During the quarter, production was briefly impacted in March 2026 due to an external geopolitical situation. However, the company was able to manage the disruption effectively through prudent inventory planning and uninterrupted availability of raw materials. This enabled us to maintain supplies to customers and ensure that plant operations remained stable. This performance once again highlights the strength of our integrated manufacturing model, supply chain capabilities and execution discipline. Demand conditions across certain end user industries remained stable during the quarter. Our published amines derivatives and specialty chemical businesses continue to provide a stable operating base. Aside this, the company continued to make progress on its strategic priorities, including the ramp-up of electronic grade DMC, DMF and other products. These products are expected to strengthen our presence in high-value segments and remain an important part of our long-term growth strategy. Let me now provide an update on our 3 projects. The dimethyl ether, our DI plant at Unit 4 is expected to be commissioned during the first quarter of FY '27, DME has applications in the RO industry, and it can also be used as a replacement for LPG in industrial and commercial applications. Our N-Methyl Morpholine, our NMA project with a capacity of 5,000 TPA is currently under execution and is expected to be commissioned during FY '27. The improved process based acetonitrile or ACN plant is also under execution and is expected to be continued during the second quarter of FY '27. All these projects are progressing as planned and are being funded through inter-accruals. Coming to Balaji Specialty Chemicals Limited, the company is under a major expansion of around INR 750 crore in a phased manner. This investment is being made for a wide range of products, including hydrogen cyanide, sodium cyanide, EDT, DTH, 2A and other advanced chemical products. NFCL the Industrial Energy and Labor Department, Government of Maharastra has granted Megaprojects expansion under the Package Scheme of Incentives 2019. the brownfield project of DA-based value-added products, including data, peta, PIP, AWA and AEP is expected to be commissioned during the first half of FY '27. At Unit 2, which is the greenfield projects at MIDC, erection and installers currently in product. This project is proposed for the manufacturer of HCM, NCM, ADT and ADT and is expected to be commissioned during Q4 FY '27. These projects are strategically important for the company as they will expand our specialty chemicals portfolio, increase our presence in import subscription products and create a stronger platform for future growth. More importantly, they are aligned with our broader strategy of moving towards value-added products, improving integration and enhancing long-term profitability. Strategically, our focus remains on 3 broad areas: first, we'll continue to tendon our core amines and derivative business by improving capacity utilization, operating efficiency and product mix. Second, we are increasing our presence in high-value specialty chemicals and electronic grade products, which cater to industries such as pharmaceuticals, agrochemicals, water treatment, refineries EV battery chemicals, paints, dice and other industrial applications. Third, we remain focused on substitution and indigenous manufacturing technology, which has been important strength for Balaji Amines over the years. Looking ahead, we enter FY '27 with a positive, but measured outlook, our focus will be on improving utilization across clients completing ongoing projects on schedule, strengthening, operating leverage and scaling up new products in a disciplined manner. The commissioning of DME, NMM, ACN and the expansion projects of Balaji Specialty Chemicals will be important milestones over the coming quarters, while we remain watchful, our raw material prices, global demand conditions and geopolitical developments we believe Balaji Amines is well placed for gradual growth. This confidence is backed by our integrated manufacturing model, diversified product portfolio, strong customer relationships, expanding specialty chemicals platform and disciplined balance sheet approach. With this I would like to thank everyone for joining the call. We can now open the floor for questions.

[Operator Instructions] The first question is from the line of Priyansh Chheda from Vallum Capital.

So just a broader question, looking at your expansion plan. Sir, we are at a capacity as the stand-alone company at a INR 2.93 lakh tons -- metric tonnes. 3,000 metric tons. And then when we were to see the quarterly volumes, we roughly at a company level operate at 35%, 40% utilization. So just wanted to understand why would we continue further expansions despite remaining at such a low utilization? And which would be those products where the utilization will be furthermore low? And if you can highlight 2 products where the utilizations are higher than the company average.

Thank you, Priyansh. See, the new projects, they are not the same products, increasing the capacity. They are all new products like we are talking of the dimethyl ether, which is an alternate to the LPG. So this we planned about 4, 5 years back by contacting the ETIO. That product will be commissioning probably maybe in this month only. And other thing is acetonitrile which was -- that was the old technology. We have just improved the technology. And you are talking about the utilization, yes, only 1 or 2 clients are utilized very lower capacity like DMF and Motala Amines battery chemicals, DMC and all because the battery manufacturers are yet to tough. So there's a reason those clients. So we are gearing up and we are getting ready for the tomorrow's requirements.

Got it. And second question on, given the supply chain disruptions that are happening globally and then we are seeing those realization getting benefited for you in this quarter. And so would be also the profit margins that reflect the spreads improving on the EBITDA level. If you can just highlight what is the average price hikes that you would have taken in the current quarter? And what is the realization growth that we should think of it in the ongoing months and the quarter till the time the disruption remains globally? What would be the quantum of price hikes that you're looking at it?

See, these prices, you are aware that because of the current geopolitical situation, most of the raw materials, sometimes it is double even 3x also 2.5x of it's regular prices. So with us of the -- some maybe -- some of the plants at shutdown because of this situation, we got the proper uptake from the customers for this current quarter. And because of the -- our proper inventory management we could be in a position to maintain these profit margins and would be guidance in coming quarters also because of the new plants or new products are coming up. I hope that the volume growth should be in the coming financial year. I mean this year, maybe partly were coming up, and I'm talking about the 2027 and there should be minimum 25% to 30% volume growth should be there from the current value. And the EBITDA should be sustainable between 22% to 23% on the total sales.

Got it. And one last question on methylamines. Sir, one of the large medcom customer manufacturers have acontegrated -- would it be possible to quantify what kind of risks do we run on this one large customer in terms of our capacity as a percentage?

See, it is for you, you are feeling it is a large manufacturer. But for us, what we have seen is their requirement of the dimethylformamide maybe about 15% to 20% of the total -- our outflow. And secondly, even today also, they are buying even this month also, they are buying from us. I don't know where from you got and maybe they have some problems or maybe our cost is later than their cost of production, even today also, they are buying from us.

The next question is from the line of Parikshit Gujarati from Neesha.

Am I audible?

Yes, sir, you are.

So just 2 questions. Earlier the management stated that they are targetting INR 2,000 crore by FY '28, in which major BaraSpecialty Chemicals will contribute and they will continue from that question in DME, we still have to get the approval from the government side. So there's a bit. So that is a policy is there. And on the Balaji speciality side, the end market demand is still growing in mid-single digit. So what is the reason that we are doing further big as -- and we announced this CapEx 2 years ago also, and we have an to be able to ramp up for these are the patients.

See, number one, this is regarding the dimethyl ether approvals. See, there is no -- I think it's pending for the manufacturing point of view. We are already having the permission for the manufacturing in for the transportation part of the approvals of late on the place. So the reason we are going ahead, plant is already fully constructed, just commissioning is going on, now the consenting activities are going on. And as regards the consumption of the PME country presently, it is importing almost 25% to 40% of from outside country. And we are talking about only 100,000 and that is 1 lakh tonnes capacity. We are putting up -- and we are -- as I said, we are targeting only aerosol and commercial establishments. You are aware that the government has increased almost INR 1,000 per cylinder recently supporting 10 days back only they've increase for the commercial cylinders. So definitely, we think that we should be in a position to continue this project on the very profitably. So one thing as regards to Balaji Specialty Chemicals, I don't know where from you got the figures. Like the new products, value-added products, which I have mentioned in my speech, that is data tape and twaep, these are all products having very good demand in the world market. The data nobody is making in the country. So there's a good demand. And like other products, like greenfield, I don't say signed. There's a good demand in the country as well as outside the country also.

So are you scale on -- so you are saying that we will be able to reach INR 3,000 crore revenue IFRS 8.

Definitely, you have not heard fully. I said the situation goes like this. We will be definitely reaching 304 in 2028.

Okay. And sir, on the DM side, I want to ask like that's the last question. so what will be the amount of volume of DME, which India will require? And is there import risk from China that China will dump at lower prices in India?

No. As of now, China has not come to the India because this being in the gas farm, I don't think there will be much competition from the outside country. And you asked about the what is the so I am saying when I say this is the alternate to the LPG. So wherever the increase is used there, we can use this like market that self is more than 40,000 to 50,000 tonnes currently using the other gases. So there, it is easy to target by giving this, and the same way, commercial establishment, there are many commercial establishments like baking ends, mall industry, ceramic industry, they're all depending on the Nigeria RB LPG, where we can replace this specifically in the current situation, there is a tremendous shortage of the LPG. So I don't think there should be any problem.

Okay. So you are saying that from the Q1 you will start applying the to the movement right?

The next question is from the line of Nilesh Ghuge from HDFC Securities.

Yes. Sir, my first question is on our consolidated numbers, there is a sharp reduction in other expenses in consolidated numbers? What are the steps or the efforts that we have taken that to use it? And what number we should for FY '27 segment in our -- for modeling purpose?

I didn't understand.

Sir, other expenses, fully consolidated...

Part of the specialty chemicals be -- the subsidiary is not working in full position because of the activities for the modification. It is working 10 days, working and 15 days is working for this modifications, repairs are going on, which goes into the expenses, which going for the modification definitely goes into the capitalization.

Okay. Okay. Okay. So this is the impact. So can we work out with the quarter 3 number as a normal number and the other expenses for FY '27?

If you have specific numbers you want in the -- other than the -- what we have presented...

Sure. Sure, sir. I will do.

Drop a mail to CS, we'll definitely try to give you your answer to your question.

Yes. Okay, sir. Okay. And sir, second question, in the subsidiary number, there is a growth at top line. However, at a gross level, the rising raw material cost is very steep. Any specific reason I mean in terms of triethylamine prices have increased or something like that?

Yes. There's an increase in the raw material prices. It's almost 3x than the normal.

Okay. And that's why our subsidiary, and gross margins are much, much lower. -- compared to quarter -- last quarter.

Yes, because we cannot consider these numbers. The reason is it's still hardly working 15 days, 20 days and even 10 days, it has worked, only after these modifications from the third quarter onwards, you can see the reserve this existed bank.

Okay. Okay. Okay. So meanwhile, we can take the annual number or maybe the 6-month number as a benchmark. Is that right understanding, sir, instead of quarterly numbers?

No. This is very difficult to compare because most almost the 9 to 12 months, it is on the modifications type is only happening -- you can have to consider it as a benchmark, right?

Okay. Okay, sir. And sir, the last question. As then, what are the prices of EDA data in Q4, particularly in the month of March? And what are the prices now?

It's 280 to 300 or even it went up to 400 also in the smaller quantities.

Okay. This is your talking about the Q4 number, average Q4 number?

Average Q4 numbers are about 300. And today, it is about INR 270 to 280.

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

My first question is how -- what is the arrangement for raw materials, especially in an ammonia the stand-alone side? And then on the ED side, how are we positioned on the raw material and continuation of manufacturing? That's the real question On the raw material, yes.

Raw materials, we are regularly market were really buying. For the ammonia, there's no problem. Only prices are up, but availability is no problem as of now. We are getting regularly means also, there is no problem only we think it's prices and volatility in the pricing. So one need to alert every time. See, earlier what we should do when we buy harder for the entire month, you should keep quite. But now we need to be alert every 3 days, 4 days, we are observing what is happening in the market, and we are buying in the shorter quantities for a shorter period.

So the availability of -- so there is sufficient arrangement to make sure that the plant which was running at 25,000 tonnes volume for all these large price of [ 20,000 ] per quarter. So you have necessary arrangement to make sure that at least plant turns at the run rate what you were always doing, right?

Yes, you are right.

Okay. My second question is, I did understand your 30% volume growth guidance. So what will drive that 30% volume growth? And are you prepared from the raw material side to deliver that 30% growth?

Yes, 20% to 30% volume growth, I said because considering the 3 new plants, one is acetonitrile, dimethyl ether and your NMM. These 3 new plants are coming up. Again, the industries, which is yet to start. We hope that in the current financial year, they will start and next financial, they will stable. So all these -- considering all these have taken a very conservative number of 30% capacity, 30% volume growth.

Okay. My next question is on the ethylamine portfolio side and the EDA portfolio side. If you could tell us the pricing that you experienced in March and the pricing that you're experiencing now or the spreads which you're experiencing in March spreads, which we're experiencing now, are they holding on? Are there any changes.

See there is a change. There was a change in the March also 3, 4 times. Even now also every 3, 4 days, there is a change. Even if I give you some numbers today, the price is going on this, that will not work for your calculation because there is a -- because of this current geopolitical situation, every 2 days, every 3 days, there's a change in the prices. Only thing is one need to be very alert both the sides, sales as well as from the procuring the raw material side. So then only we should be in a position to maintain the margins, what we have assured.

Okay. And my last question is on the 3 new products which you referred to, which is acetonitrile, and oen more other products us what is the pricing range that they are at, so they are at that 200-plus range or 300-plus-percent range, what is it?

See, one is this is about INR 100-plus, INR 100 INR 120 dimethyl ether what we are thinking at around INR 100 basing on the current situation. And acetonitrile is about INR 240, today's situation. And NMM is also about INR 250 to INR 300.

The next question is from the line of Bhagat from Prosperity Wealth Management Private Limited.

My question is regarding the dimethyl plant. Could you please comment on the expected utilization of the plant in line with the potential revenue and EBITDA margins for current year and next year, please?

This is a very difficult question answer, Bhagvat. Utilization, I can say, the situation goes like this, we can utilize fully only thing is we are waiting for the permission on the transportation, road transport we are applied to the government, and we are following up. We expect that in a month's time, that will come. And production, yes, we continue to be in production we have the storage will be our storages. And margins, it is very difficult to say. Only we can say today's margins are okay with the line of other chemicals is there. But tomorrow, it is very difficult to predict what will happen on the raw material front.

So if you get the road transportation position, so since the time we can utilize the plant fully or...

Current financial year maybe about 30% to 40%, we should be in able to utilize because there will be some teething problems in the production even it's and also using the new product is being the first time in the country. We are also adjusting the product also will take some time. By end of the year, we should reach to 50% to 60% capacity. And the coming years, it will go to 80% to 90%.

Okay. And 100% utilized, what is the potential revenue?

I'm telling you today's prices, even if you take a conservative INR 80, INR 90 also, our capacity is about 100,000 tonnes. That is even if you take 80% to 80,000 tonnes, you can calculate.

Okay. Okay. Okay. Okay. And the margin that you mentioned is similar to the other chemical margin, that's around [ 23% to 25% ] approximately.

Today's situation.

Today's situation. Okay. That's around 22%?

EBITDA's 22.

The next question is from the line of Anil Shah from Insightful Investment.

Just wanted to know what would be your CapEx that is still remaining in the stack alone for these 3 products that is DME, NMM and ACN for this year?

I think hardly INR 20 crores must be there. We already spent almost all the money. We paid the advance of the equipment. There on the way. The balance is maybe INR 20 crores.

For all 3 products combined, you're saying about INR 20 crores is balance, right?

Correct.

And from a subsidiary perspective, what is the likely CapEx this year that we will be doing, Balaji specialty?

Its total INR 750 crores in first phase, we'll be spending about INR 350 crores to INR 400 crores.

Okay. Out of which how much will be this year?

This year, it's about -- we already spent more than INR 100 crores, INR 110 crores. We'll be spending about another INR 200 crores, INR 250 crores this current year.

Okay. So basically, we've got -- we are looking at anywhere between INR 250 crores to INR 275 crores of CapEx combined on a consolidated basis this year.

Yes INR 275 crores to INR 290 crores.

INR 275 crores to INR 290 crores. Just to touch upon in terms of the DME, obviously, while we await the road transport permission, have you already been approached by prospective buyers? Is there a volume understanding agreement which has been signed? Or is it all going to go on spot? Or how does this work? If you could just explain a bit.

We approached almost all the customers to equivalent to our capacity. The only thing is this being a gas -- we cannot provide them the sample. People are asking for example. Now we had about 100 cylinders of 500 each. Those will be sending one, one cylinder customer, even though they are the bulk consumers, we'll be testing with 500 kgs. And after that testing, when the trials are done successfully, then they will be placing the bulk requirement. Of course, after receipt of the transport permission.

Great. So more likely than not, we should see the actual book revenues only probably in the second half of the fiscal?

Yes.

Because the permission, you said not is...

I have not considered anything if you heard my earlier answer to the question, I told them that there will be 20% to 30% value in the next financial year, considering all these products.

I thought you said 30% to 40% utilization for DME in FY '27 itself, right? 30% to 40% utilization.

Yes. But conservatively, I said, these -- all the 3 products like acetonitrile, partly we are selling, but when that comes, that sales will increase. And these 2 products are new. One is NMM and methyl morpholine. Also, obviously, any product when you go first time in the country, there are 2 types of the eating products. One is our side to get the quality of the customer specifications. Number two, they accent for the product being manufactured first time in the country when we talk about the alternate to the product one they're using already. So there also, they will take some time. Concerning all the things this year, it will be very marginal. But next financial, we'll definitely see 60%, 70% of the utilization should be there for this product.

So for this particular year, then what kind of volume growth and what kind of revenue growth -- more important is volume because value growth is obviously subject to a lot of raw material prices moving up and down. So what kind of volume growth for this year as a company that we should be looking at? Because I appreciate the fact that DME, ACN and NMM will take its time and you are not factoring in too much for this year and that's understandable.

But if I assume it will be 10% to 15% volume growth should be there.

10% to 15% volume growth, and this is for a consolidated part, right?

Yes.

Consolidated.

Yes.

Okay. And in terms of the last question, sir, in terms of the unit, how much would we have spent -- and is that unit been commercially operation in terms of -- or it's still not -- we are not showing it as commercially operating.

It is -- it's already started the production, but not for the battery chemicals, they are giving to the other sectors also, there is some condition like agro and pharma, so it is running 20% to 25% capacity production is going on. All these battery people, I don't know everybody is talking this month, next month, somebody shared that from the April onwards will come into the full swing. So we'll have to wait when they start build and then we will be in a volition to utilize our capacity.

Yes. I understand that, sorry, I'm just extending the same question. It's not a new question. But has our product been approved by the respective battery manufacturers. And in terms of the trial runs, in terms of samples, all the -- all that part has been done. It's just the fact that they need to start commercial orders to be placed. Is that correct?

Yes. They have placed -- some of the people place the commercial also, 100 tonnes like that, some of the people they placed. That this is not exactly I'll tell you 2 things. One is the battery based chemicals and other is the electrolytes. Product was in chemical electrolytes. People who are buying from us presently who bought about 100, 150 tonnes. They said that Indian companies are not ready. We are selling this outside country. We bought our chemicals, they made an electrolyte and they sold it. They are selling it outside the country.

Got it. Got it. And We are hoping from better utilization in that particular segment.

Yes, yes. Definitely.

The next question is from the line of Rajiv Rupani, an individual investor.

Yes, sir. Congratulations on a good set of numbers. Sir, my first question is regarding increase of stake in BSE from 51% to a higher level. So I would appreciate -- I have been asking this question since last few con calls. So if we can increase our stake in BSE from 51% to a higher level, it would be good, could you update us please.

See, [Foreign Language]. There are boards are involved, both the shareholders are involved. So they will take it appropriate time, both the boards will take the decisions and will take place.

So are we going for an IPO? Or are we going to increase the stake? Any hint can you give us.

It's too early. It's too early, Rajiv, to discuss. But why the IPO is postponed with us, we want to come with the -- all the products into the market, then we will talk about what action to be taken.

Okay. And sir, my next question was this -- the greenfield and brownfield CapEx, I had come to you and we had -- there's a plant visit in June. So now it's been 3 years, not even the phase 1 of the greenfield CapEx has started. So is there a delay of more than a year in this?

No. The things what we said in [ 2020, ] we're already the production like ethylamine, the DMC and all those products are already in production. Now we modifications, we have taken last year only the modification decision for the Balaji Specialty Chemicals one, which is going up. You yourself saying that you did not visit from 2020, how can you say what is happening at the level once you visit, you will understand our quantum of is involved, what type of machinery is involved once you visit probably by this month and our next month mid we will be inviting the investor stakeholders for the visit of the -- witness the expansions going on.

POkay. My next question was on antidumping duty on DMS and ADA. Any update on that?

DMF, we are not yet applied that, that old case is still there. It was at final stage. But because of this geopolitical situation, government has retired many products, they're very duty-free, for regularity antidumping. So we will have to wait until end of June because those orders given by the Government of India or exemption of certain products is up to, I think, the end of June. Probably after, we will come to know of all these cases.

We take this as the last question. I now hand the conference over to Mr. Gagan sir. Thank you, and over to you.

Please thanks to the Balaji management for sharing their views on the company's fourth quarter fiscal year 2026. We take then this opportunity to thank Mr. Ram Reddy to speak once again. Would you like to give closing comment, sir?

Yes. Thank you. Thank you, Gagan. I would like to thank you all the participants, all the stakeholders either shareholders to showing interest on our company. Definitely, we will not let you down, I once again assure you all. And as I said, we'll be inviting whoever is interested to witness the expansions going on. So thank you once again. Thank you.

Thank you. On behalf of Elara Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.