PCBL Chemical Limited (PCBL) Earnings Call Transcript & Summary

Good morning.

Good morning, good morning.

Good morning. Sir, we can start, we have the forum with us.

Thank you. Good afternoon this is Sanjiv Goenka. We are holding the EGM by video conferencing. The quorum is present. I declare the EGM open, and welcome all of you to this EGM. In case there is any connectivity problem for me at any point, as for the decision of our Board of Directors, Mr. Kaushik Roy, Managing Director, will conduct the rest of the proceedings. I now request our Company Secretary, to brief you about some basic rules relating to the virtual EGM.

Thank you, sir, and good morning, everyone. As you are aware, the process of Remote e-Voting by the members has concluded yesterday at 5:00 p.m. Members who have not yet cast their votes electronically and who are participating in this meeting will have an opportunity to cast their votes during the meeting through the e-Voting system provided by NSDL. This facility will continue to be available for the next 30 minutes post-conclusion of the meeting. In this meeting, there will be no voting by show of hands, and there will not be any proposer/seconder for the resolutions. No result will be declared at the meeting. The Board of Directors have appointed Mr. Anjan Kumar Roy, Practicing Company Secretary, Membership No. FCS 5684, as a Scrutinizer to supervise the e-Voting process, and he has joined the meeting. Also, Mr. Vishal Sharma has joined the meeting as a Representative of Statutory Auditors, M/s. S.R. Batliboi & Co. LLP. The company has received requests from some members to pre-register themselves as speakers at the meeting. Accordingly, they will be invited to ask questions or express their views when their names are called up by the Chairman after all the 5 EGM resolutions are taken up. Members are requested to keep their questions suggestions brief. Thank you, sir.

Thank you, Kaushik. As the notice is already circulated to all the members, I take the notice convening the meeting as read. We convened this meeting for a special purpose. From time to time, we've been talking about the growth opportunities that are in front of us. And today, I think it's time for us to embark on a huge growth plan. Growth in carbon black, and more importantly, in new areas to future-proof our portfolio. Growth in chemicals, we've talked about this. And it is with this in mind that we've signed a share purchase agreement with a company called Aquapharm, based out of Pune, which is involved in specialty chemicals with high-end applications in detergents, oil and gas, water treatment polymers, textiles, and pharma, which expands our horizon from the carbon-based chemistry, which we have today, to phosphorus, benzyl, amino acid, and other chemistries. This is a big deal for us. It's a transformational leap for us. And it's the first but very significant step towards our move towards becoming a specialty chemicals company. Aquapharm had revenues of INR 2,045 crores, and an EBITDA of INR 417 crores last year. At gross margins of 31% and EBITDA margin just around 20%. With manufacturing facilities in India, U.S.A., and Saudi Arabia, it's debt-free. And Aquapharm has a presence in green chalets that's something extremely, extremely, extremely exciting. It's biodegradable, sustainable, green. It improves detergency, the green chelates. Global market is huge. Aquapharm has a small plant as it stands, but the scope for growth is enormous, and this could be a very strong area for growth at very high margins. So we will grow in our existing business. We will grow in specialty blacks business. We will grow in the chemicals business, and we will grow aggressively. We will grow profitably. We will grow with strong margins. This is what we wanted to share with you, and the resolutions that are proposed today are with this in mind. I now come to the formal items of the EGM notice. To approve increase in -- item #1 is to improve increase in borrowing limits under Section 180(1)(c) of the Companies Act. Item #2 of the EGM notice is a Special Resolution for approval of creation of mortgage or charge on the assets properties are undertaking the company under Section 180(1)(a) of the Companies Act 2013. Item 3 of the EGM notice is also a Special Resolution. Approval of investments, giving loans, guarantees/letter of comfort/letter of support and security under Section 186 of the Companies Act 2013. Item #4 of the EGM notice is also a Special Resolution for approval of advancement of any loan/financial assistance/giving guarantees/providing securities/letter of comfort/letter of support under Section 185 of the Companies Act 2013, where directors are interested. Item #5 of the EGM notice is a Special Resolution for approval of the Alteration of Articles of Association of the Company. I now will move to invite the pre-registered speakers.

First, [ Mr. Sujan Modak ].

Yes. So you can hear me?

Yes, Mr. [ Modak ].

Yes, we can.

Sanjiv sir [Foreign Language], how are you?

Very good. Thank you.

Yes, sir. Good afternoon. Respected Chairman, other Board of Directors, I am [ Sujan Modak ]. Sir, I'm attending this meeting from my residence in Kolkata, sir. Sir, in this EGM, we have 5 agendas, and that is mainly for the purpose of acquisition of this Aquapharm Chemical Private Limited. This is what I understand, this is a very, very significant approach of our company, sir. Sir, I have only 2 questions, sir. What is the timeline for completion of this acquisition if you can please tell us? And what is the projected growth we expect in the top line and bottom line after complete acquisition of this ACPL in next 2 to 3 years? These are the 2 questions, sir. And I support all the agendas. Done already voting. And before I finish, I'd like to definitely thank our company Secretary, Mr. Kaushik Mukherjee, and his whole team for being a very, very nice investor services to the investors community, sir. Thank you very much, sir. Today, it's a very auspicious day, it is the National Youth Day, and 162 birthday of Swami Vivekananda. So it is a very nice day you have chosen, for that I really thank our management. Sir, over to you. I don't want to take more time, over to you for further proceedings. Thank you.

Thank you. [ Mr. Ashith Kumar Pathak ].

Am I audible, sir?

Yes, Mr. Pathak.

Good afternoon, respected Chairman, MD, Board of Directors, [indiscernible], Company Secretary, fellow members joining at EGM of PCBL Limited. My name is [ Ashith Kumar Pathak ] joining from Kolkata. My esteem gratitude to our company Secretary, Mr. Kaushik Mukherjee, and entire leadership teams for sending me the notice of the EGM by email very well in advanced and allow me to speak. Sir, I have already casted for the 5 resolutions mentioned in the notice by Remote e-Voting. Sir, I have 3 brief views, which I like to share. My first view is, sir, do we have any plans in mind to list ACPL? My second question is, can you please name some of competitors of Aquapharm? And my third question is, which is the margin that we are looking forward to form these acquisitions. Nothing to say more, I pray to God mostly for your good health and everybody associated to PCBL.

Thank you. [ Mr. Bimal Krishnaa Sarkar ].

Hello. Am I audible, sir?

Yes, yes, Mr. Sarkar.

Very good morning, sir. I am [ Bimal Krishnaa Sarkar ], Equity Shareholder of the company. [Foreign Language]. Sir, my second question. [Foreign Language]

[ Mr. Gautam Nandi ].

Am I audible, sir?

Yes, [ Nandi ].

Thank you, sir. Good morning, and happy New Year, sir, happy and prosperous New Year. Sir, respected Chairman, Board of Directors, my online fellow shareholders. Myself [ Gautam Nandi ] for Kolkata, Kankurgachi, very old equity shareholder of your company. Sir firstly, I'd like to give thanks to your secretarial department for sending me the EGM notice, and necessary joining link through email in advance. So special thanks to our respected company secretary. [Foreign Language] Sir, you are organizing your EGM through video conference, and I find it is a grand success. [Foreign Language] Thank you, sir. Thank you.

Thank you. I will try and respond to the questions raised. Questions pertained by and large to Aquapharm. There's a question on the financial impact. It's going to be bottom line accretive. That is all I can say in short, it's a debt-free company, which had an EBITDA of INR 417 crores last year. So all said and done, it will be bottom line accretive. Aquapharm is amongst the world leaders in the areas in which it operates. So the biggest competitor comes from an Italian firm. Mr. Modak asked about the timeline for the acquisition to get consummated. So without giving a specific timeline, let me just say that I expect, hope that in the next few weeks, and we would hope that within the month of January, it gets concluded. And the growth prospects of Aquapharm. So as I said, each of its lines are in very high-growth sectors, but particularly green chelates, I think it offers a huge opportunity, and margins are very significant, and the scope is significant and established demand is significant. So this is something that definitely gives a very big opportunity. But having said that, we have -- our knowledge of the company today is that of an outsider based on research, based on due diligence, based on some interactions. But once we get in, we should hopefully be able to share many more details and have a more precise idea of the specific expansion that one can do. So I think all in all, it seems to be a very good opportunity. It's our entry into the chemical sector. It's our entry into a very high-margin sector. And there was a question on EV chemicals. I take this point very strongly on board, and pray along with us that very soon, we'll have something in that space as well. The voting results, along with the scrutinizer's report will be made available within 2 working days from the conclusion of the EGM and will be posted on the company's website at www.pcblltd.com, and on the website of NSDL. Such results will also be displayed on the notice board at the registered office and shall be available at NSE and BSE Limited. Thank you so much for your participation and support.

Thank you.

Thank you.

Thank you.

Thank you very much, and thanks to everyone from the Board also who's attended this. Thank you so much.

Thank you, sir. Bye-bye.