Black Rose Industries Limited ($514183)

Good afternoon, ladies and gentlemen, and thank you for attending this virtual meeting. It's a pleasure to welcome you on behalf of Black Rose and SKP Securities to this Q4 FY '26 and FY '26 financial results. [Technical Difficulty] [Foreign Language] Hello. Can you hear me now?

Yes, again, yes.

Excellent. Okay. Let's start then. Good afternoon, ladies and gentlemen, and thank you for attending this virtual meeting. And I will say my apologies for the technical glitch resulting in this [indiscernible]. It's my pleasure to welcome you on behalf of Black Rose Industries and SKP Securities to this Q4 FY '26 and FY '26 financial results webinar. We have with us Mr. Ambarish Daga, Whole-Time and IR Officer; and Mr. Bhavesh Shah, General Manager, Sales. This webinar has been recorded for compliance reasons. And during the course of discussion, there may be proven forward-looking statements. These must be viewed in conjunction with the risk that the company faces. We'll have opening remarks and a presentation by Mr. Daga, followed by a Q&A session. Thank you, and over to you, Mr. Daga.

Thank you, Navin-ji, and a very warm welcome to all who have taken the time out to join us for this annual webinar revenue of Black Rose Industries. I guarantee [indiscernible] right now seems to tariff policy of Trump. So it's quite a difficult time. And I hope we are able to work on that and Navin-ji if you could start the presentation. As the presentation gets rolled in, just a word of caution that certain statements might be misleading, which obviously should be that in line with the risk that the company faces.

Just give me a second. Just getting it uploaded.

So while the [indiscernible] are uploaded, I will just introduced the Black Rose business presence. As you are aware, Black Rose started almost 3 decades ago as a chemical distribution company. And during the course of this journey, where we have strong relationships with some of the leading global chemical manufacturers, especially from Japan and Germany, China, et cetera. Black Rose has built its foundation on the strong relationships and being a leader in the products that it distributes in the Indian market. Business relationship that will have the opportunity to enter into chemical manufacturing, more than a decade ago when we started [indiscernible] secular liquid plant [ open and sh ] capacity of 10,000 metric tons per annum. This currently -- the capacity stands at 32,000 metric tons per annum out of which 20,000 we have marked for [ budget cars ] and the balance is for our greenhouse [ in]. Navin-ji, that will be for this slide. Navin-ji. We can't hear you, Navin-ji.

Let me check. Ambarish-ji, just 1 second.

Acrylamide liquid, the company started manufacturing the downstream products. And currently, we offer acrylamide solid capacity of 3,600 metric tons per annum and the material -- Navin-ji, is it visible now?

Yes, it is.

Which slide are you on?

Slide #3.

Apparently we are going to start with acrylamide liquid [indiscernible] acrylamide solid [indiscernible], which has a capacity of 4,000 metric tons per annum. And the polyacrylamide solid in the RNDA financing space. The other businesses of the company, which are the business and contributed to levering 1% of the company's image. Moving on to the next -- thanks. Yes. This is a snapshot of the financials of the company. As you can see in Q4, there was a very big jump in the performance, and our revenue grew by 38% and the EBITDA grew by about 90%. This was mainly due to the [ solar ] sales model with the company operation and in its distribution business as well as work in the manufacturing division. The company was able to override the license in being released, and we're working on much stronger as a reliable supplier of products to its [indiscernible]. As regard the overall EBITDA also grew significantly from our previous year, going up from 9.7% to 11% and also there was an improvement in the [indiscernible]. Overall, on a stand-alone basis, the revenue was a minor dip, which should be explained subsequently. Moving on to the next slide. The snapshot of the balance sheet. The company continues to remain debt-free in its operations. During the year, the inventories are reduced as the company was able to increase its market share and add new customers to reach more [indiscernible]. At the same time, the company based on its performance a dividend of 125% is recommending a dividen of 125% for the [indiscernible]. Now moving on to the next slide. This will be snapshot of the revenue for the company. When there was a significant volume growth in the domestic -- there really is a performance of the company, given mainly by the high [indiscernible] performance in the manufacturing statement. The volume, as I was mentioning in the distribution segment [indiscernible], which offset the correction for the year in the [indiscernible]. [indiscernible] we achieved this increase by expanding its customer base and the market or reach that we are able to service new geographies also. The profitability improved the operational efficiency [indiscernible] and also the product mix healthy. The impact of the war in Middle East towards the end of year [indiscernible], there was more impact on the Energy [indiscernible] becomes not dependent on [indiscernible]. While there was a small impact in some of the products in the distribution business. Next, moving on to the geographical mix. So in the manufacturing segment data, we see from the ever there was some marginal improvement in the product mix in terms of manufacturing versus distribution as almost 35% of the new for the period year came from the manufacturing segment and reparation distribution. In terms of exports, the export [indiscernible] export of some platform because of the different policy of the U.S. government in terms of tariffs which [indiscernible] a better range than from the U.S. oil gas sector reduced during the year, which is also a [indiscernible]. Now in the next slide, in the [indiscernible] distribution on that [indiscernible].

[indiscernible] digit revenue of our [indiscernible] of the year. We [indiscernible] healthy volume growth strongly driven by stronger demand and the additional [indiscernible] numerous across recent key segments. However, despite the improvement in the volumes, overall level decline due to sustained by the chemical pipeline from the [indiscernible]. Operational [indiscernible] proved to be very effective. If anybody has to shore unintended supply to our customers despite the geopolitical tension in the Middle East. [indiscernible] also supported our first quarter portfolio contributing positively towards revenue and margins. The year was also marked by some extra challenges, in particular, the [indiscernible] are qualities by the [indiscernible], which led to weaker uptake from the oil [indiscernible], which affected the overall exposure [indiscernible].

[indiscernible] again, we recorded significant volume growth in [indiscernible] business in margin. This decision was particularly aligning with our focus on standing upstream, acrylamide and exporting into higher applications across a more diversified agents are based. The strategic shift along with there is some [indiscernible] geographers, both in domestic and export markets continue to increase volumes in enablers. We were also able to improve our margins through better [ raw ] under management and operational efficiencies. Finally, our volumes remain stable despite consumer imports from China business reflecting the billions of our product portfolio. I will hand over for the remaining [indiscernible] thanks to [indiscernible].

Thank you. Looking at the right trend of [indiscernible] I trained our [indiscernible] with the acrylamide prices. So we see that the entire year [indiscernible] was more by market price trend makes a solid [indiscernible] decline in the [indiscernible]. Suddenly in the month of March with the [ consent ] of the war in the Middle East the price is shorter for [indiscernible]. However, we were able to have [indiscernible] addition throughout the year with our sales efforts as well as maintaining the raw material procurement in [indiscernible]. Going forward, the outlook for the coming quarters. We're starting to [indiscernible] a distribution. The Chemical Distribution business continues to be the [indiscernible] of our company, and we focus on new product additions during the year and also expanding our end customer base where we are already the market leaders in most of our distribution products. At the same time, the near-term demand in Q1 is likely to mean subdue due to the global uncertainties. However, the higher pricing overall to drive the revenue of course during this quarter. Budget expense, we are seeing strong order pipeline, and that should turning a healthy performance during this quarter. Moving on to the outlook for manufacturing. First about acrylamide liquid, we explore the tactical pickup in the second half for the current quarter and that alert our overall phase for acrylamide. The focus remains on export year down. On the back of our registration of [indiscernible] and preregistration of the [indiscernible] which is helping us along with participation in international exhibitions to drive further market penetration and growth. The secular acrylamide business continues to remain [indiscernible] in spite of all the competition from China. And overall, the profitability will be supported by the operational efficiencies [indiscernible]. Regarding [indiscernible] acrylamide, volumes are expected to remain stable. We continue -- will be the market in the only supplier to key customers in India as well as we have an expanding customer base for domestic and overseas. The focus remains on new customer additions to drive growth as [indiscernible] continues to be one of the goals for the company in the manufacturing segment. Next, we move on to the upcoming [indiscernible] projects. So we [indiscernible] project is launched [indiscernible], and we are moving -- progressing the project as planned. And we will also start to [indiscernible] activities given the course of this year. [indiscernible] the company also takes the R&D team [indiscernible] in huge upstream aramid products and we are on that we also will add put offerings we have in the manufacturing market in the future quarters. Specialty line project, which is being undertaken along with vacation company. That is also progressing a plan and we hope to -- they are resident on the project going forward during the current year. [indiscernible] is doing well, and there [indiscernible] new innovations and new opportunity which we get to our relationships. That is all, and I hand back to you, Navin [indiscernible].

Thank you, Ambarish-ji. Hence, we now open the floor for the Q&A session. [Operator Instructions]. We take the first question from [indiscernible]. [Operator Instructions] In the interim, may I ask you to please post your questions on the Q&A board at least we can take it from there. [Operator Instructions]. Yes. Question from [ Madurai ], the Q4 margins and EBITDA are these sustainable? Ambarish-ji, I'm just reading them on the Q&A board because there seems to be some -- some technical issue. So this is from [indiscernible], our Q4 margins and EBITDA sustainable?

Thank you, Mr. [indiscernible] for the question and sorry about the technical glitch. So the margins and EBITDA is [indiscernible] are good market scenario. So it is very difficult to predict the exact margins or EBITDA over the long-term period. Having said that, the company has been focusing on increasing the sales volume as well as the profitability and several initiatives have been taken in this regard. So the margins if we look at it, we have been very consistent in terms of our margins and EBITDA. And depending on how the market unfolds, how the whole cost scenario raise margins will be defined mainly by [indiscernible]. The EBITDA in terms of absolute numbers again, should be sustainable. However, in terms of margin percentage, as I mentioned, it is driven by [indiscernible]. The cemeteries have remained subdued for the long period and now we in [indiscernible] and we expected to remain normal for some years of time. So therefore mean that the margin revenue overall [indiscernible]. Navin-ji, any other questions?

[indiscernible], can you try to unmute yourself [indiscernible], I see some settings. Okay. We'll just continue with the Q&A Board. [indiscernible] had a follow-up question. Will we be able to maintain the INR 13 crore EBITDA per quarter going forward? Was it inventory gain or operating income? Two questions. Ambarish-ji, you're on mute.

So I was saying, there are multiple factors which go into the EBITDA. It is not just about fixed cost, but we always do maintain sufficient [indiscernible] in order to make the customer requirements. So the margin overall will depend on how the market plays out and how long it to -- it is -- there is no single [indiscernible] which you determine the overall margin or EBITDA for the next 4 quarters. We are adding new products and we are having to chase volume continuously. Our motivation is also on increasing of our export sales, which typically have better profitability. So we are quite positive in being able to have a sustained approach and group margin or made. In terms of the question on Q4, whether it was operational gain or just inventory gain, so I would say it is make sure to look at it from what I mentioned even in the presentation, we have been increasing our values for our key products during the course of the year. And there is also indeed in the overall growth. The Q4 again, there was only a small 15-day period, which was, I would say, impacted by 4. So it is not test about [indiscernible] gain on a onetime basis there going to such statements as well as in the event.

[indiscernible], hope that answers your question. The next question is from [indiscernible]. What's the impact of permanent revocation of the closure directions of the company's plant?

Thank you, Mr. [indiscernible] for the question. Basically, the pharma relocation in that the closure notice was received in permanently revoked. In the sense, we can -- the operation can continue without any interruption. So that chapter is now behind us, and we are going to continue operations as [indiscernible].

Thank you, [indiscernible]. [indiscernible], in case you are able to self -- unmute yourself, please go ahead and ask, and I'll read out your questions. Some of the participants just mentioned that they are able to unmute themselves. Anyway. There's a question, I'll just read it out. As for outlook commentary, more products will be added during the year. I would like to understand its effect on the top line.

Thank you, [indiscernible]. In terms of new products being at least, like I mentioned, the products have been added both in distribution as well as manufacturing. So overall, we see -- we are targeting an increase in top line of, say, between 15% to 20% from the previous years as maybe not mark. And of course, there will depend on how the markets play around [indiscernible] how much your market penetration we are able to achieve as long as it impact is [indiscernible]. But as a [indiscernible], I would say, we've been continue to we should be able to achieve from the new production.

Thank you [indiscernible]. [indiscernible] has a follow-up question. Will we be able to do INR 50 crores EBITDA in FY '27?

Thank you for the question, but it looks like the same [indiscernible], it is difficult to put down any number as an alone because there is not hold much value -- there are too many different factors that's [indiscernible] to a number. So I would rather stay away from giving you any numbers. We enable [indiscernible] our business in both the distribution as well as manufacturing. And we would be happy to achieve the best possible number that we can hit as our approach [indiscernible] had a follow-up question, oleate how much capacity can be increased and thus revenue growth in FY '27 and FY '28. So we changed both these things, the relocation and because equity expansion are not related to each other. So very sad we hope to achieve the maximum possible utilization for the manufactured products for [ 4 ] years. And at the same time, like I mentioned, there are projects in the pipeline, which also once commercialized will add due to [indiscernible]. So rather than saying, giving out any specific note, I would see with the addition of each product to our manufacturing portfolio and to our distribution portfolio they will be adding definitely will be at volume [indiscernible].

[Operator Instructions]. Presently, I don't see any more questions on the chat. So I'll hand over the webinar to you for the closing remarks.

Thank you, Navin-ji, and thank you, everyone, for taking the time out. We sincerely apologize for the technical glitch due to which [indiscernible] we don't have more interactive session. But you can already [indiscernible] to us either directly or to Navin-ji and we will be happy to [indiscernible] in future. I would just like to sum up saying that we have made good progress in most of our [indiscernible], whether it is distribution on manufacturing, [indiscernible] innovation [indiscernible] last year. And we are starting to do even better in the upcoming [indiscernible]. With that I would like to end this on a positive note, and thank you all for being everyone for joining.

Thank you. On behalf of SKP Securities, thank you, Mr. Daga. Thank you, Mr. [indiscernible]. Thank you to have for taking your time to interact with the investors. And friends, if you have any unanswered questions, request you to please follow that to me or [indiscernible], and we'll take it up with the management. Thank you very much for attending today's webinar and we look forward to hosting you once again in the future. Thank you, and have a wonderful day.