Vishnu Chemicals Limited (516072) Earnings Call Transcript & Summary

Well, you're already witnessing that. I mean, I could give you a guidance for this year. So the upwards of 30% on the volume as well as value, it's already witnessing. So that's where we are.

Once the debottlenecking and the capacity expansion for the chromium is done, what would be the expected revenue addition?

We are looking at an upwards of 35% on the revenue growth. And given that the backward integration is also picking up well, there will be a further improvement in the EBITDA looking at 200, 300 basis points of improvement from where we are today.

Chromium, but you have something in barium chemistry as well. Operating levels for expansion in barium is around 10%. You expect it to improve by end of this year. How much will you improve it by? And can you give us a split of how much of revenue is coming in from chromium, how much is coming from barium? And what kind of growth levels are you expecting? 50% on an average, how much from each segments?

In our barium facility, I think the second line has come online. Although the quarter 1, the operating levels were not up to the mark because certain postoperative technical glitch what we have faced, but we are very confident on the coming quarters. I mean, we are expecting 40% increase in the volumes on the barium. In terms of split, it's as per previous guidance of 75% of the revenues are coming from chromium chemistry and 25% is coming from barium.

Okay. And when you talk about margin expansion because of backward integration, how much of a margin expansion can you expect from there?

We're expecting a 300 to 400 basis points.

All right. What is the biggest risk according to you for your revenues and margins?

You see what's happening in Europe with this gas prices and availability of gas. We are hearing some slowdown from our customers in that part of the globe. However, we see some strong demand from the U.S. clients who are taking -- who are capitalizing on this situation where the gas prices and energy prices, U.S. are still relatively competitive over the Europe. So we are seeing more demand from the Americas. That's where our focus is at the moment.

So is competition also rising? In terms of your market positioning, who are your competitors? I just wanted to understand, are chromium and barium commodity chemicals? Are the prices very volatile? Because, yes, right now, things are looking on the upside. But as [indiscernible], what could the risks be? Is it higher raw material prices? Or do you expect this momentum to continue for a while now?

Yes. We expect this momentum to continue. Our peers are mainly in North America and Turkey and South Africa. I think there hasn't a lot of capacity expansion over the last few years. And the demand has remained rather resilient over the years. So I think we don't see a lot of change happening. And given our order book, also, we are very confident about the coming quarters.

What could FY '24 look like? We've been talking about FY '23 and how revenue growth will be close to about 50%. What about thereafter? Could you paint a little bit of a longer picture for us?

Yes. Well, we are looking at diversifying our barium portfolio. A new specialty, which is a paint filler is going to come online during the first half of FY '24. So we are working in the direction and very excited about this new product.

Okay. All right. Siddartha, it was a pleasure speaking with you. Thank you so much for joining us and giving us all those details. That's the word coming from Vishnu Chemicals, strong set of numbers. They expect a revenue growth of 50% with volume growth of 17% in FY '23. And once the backward integration in their Chromium segment actually kicks through, they will see a...