Vinati Organics Limited ($524200)

I think let's move across -- move on to the next management. Vinati Organics reported a mixed set of fourth quarter numbers. Revenues and EBITDA were under pressure. We have Vinati Saraf Mutreja, Managing Director at the company joining in. Vinati, good to have you with us here, good morning. Thanks for being here.

Revenue growth has been flat, Vinati. Can you give us a breakup of the performance category-wise, ATBS, IBB, IB, et cetera.

Yes, absolutely. A couple of reasons for the flat revenue growth. Starting with ATBS, we did complete the expansion this year in October. However, from the demand side, there was a bit of a slowdown starting October itself, which fortunately has picked up in April. Hence, on ATBS volumes as per projections, maybe we were down by just about 5% or 10%. Again, I'm going to insist on volumes because a bit of the reason, a small reason also why revenues are flattish is because overall this year, the RMC cost was lower than last year. The raw material price per kg. That also means our realization was slightly lower, even though there was volume growth coming to products like antioxidants, where we saw a 25% volume growth. IB was flat. IBB was also flat. We were expecting some revenue from the subsidiary where we have realized that since we went for a new process, we are going to have to reengineer that process and that will take another 6 months. So we lost about 5% of expected revenue on that regard also.

Thank you very much, Vinati, for joining in. So for FY '26, could you tell us what was the volume growth? What was the impact on account of lower realizations? And for FY '27, what is your own expectations for volume growth across the various products?

Sure. For FY '27, now that the ATBS expansion is ready and also the demand is picking up, I expect about at least 20% volume growth in ATBS itself. I expect revenues coming from the subsidiary starting October '26. Also, antioxidants, the market is looking good. I'm expecting another 15% of revenue growth there. Yes, IBB and IB, butyl phenols, they are already running at full capacity. Net-net, this should result in a 15% volume growth for the FY '27.

Okay. And margins for you. You've pretty much said over the 3 years, the 26% to 27% kind of margin band is what you're looking to sustain. Now in Q4, you did better at 29%. Would you look to raise your margin guidance at least for FY '27?

No. Again, this margin is a misnomer because when the RMC prices are low and my price falls, the margin looks better because it's a percentage of the revenue, right? And that is why you're seeing the 3 basis point increase from 26% to 29%. I don't know what the RMC is going to look like over the next 1 year. I don't know what the rupee is going to look like over the next 1 year. So I will stick to 26% to 27% EBITDA margin.

And generally, when crude prices are higher, ATBS does -- I mean, what is the impact? Directionally, if you could help us in there. Has there been any impact on account of the West Asia crisis? And if you could quantify that?

Well, generally, as a broad thumb rule, yes, when crude prices are higher, ATBS demand goes up, and we are seeing very positive signs for the demand starting April, which also means that when crude prices are high, my input prices rise. But thankfully I'm in a position where I can pass on that price increase in most of my products.

Okay. We leave the conversation here. Vinati, thank you very much for joining in.