Apcotex Industries Limited Earnings Conference Call Summary
Financial Highlights
• Q1 FY25 Results:
• Operating income increased by 21% to Rs. 337 crore.
• EBITDA rose by 25% to Rs. 32 crore.
• Net profit after tax grew by 22% to Rs. 14.8 crore.
Operational Performance
• Volume Growth:
• Overall volume growth of 14%.
• Export volume increased by 12%.
• Segment Performance:
• Notable growth in paper, construction, and tyre cord sectors.
• Margin pressures primarily in the glove segment.
ApcoBuild Update
• Growth:
• ApcoBuild experienced 12% to 14% growth in the current quarter.
• Market Position:
• Focus on niche products despite competition in the construction chemical B2C segment.
Valia Project Insights
• Performance:
• Currently at 50%-60% capacity utilization; EBITDA neutral.
• Expected to reach 65% utilization in 1-2 quarters.
Capacity Utilization
• Taloja Plant:
• Currently at 70% capacity, projected to reach full capacity in 12-15 months.
Glove Industry Outlook
• Market Conditions:
• Recent improvements in selling prices and volumes.
• Challenges due to excess capacity, particularly from China.
U.S. Duties and Market Dynamics
• Impact of U.S. Duties:
• Expected to shift demand back to Southeast Asian suppliers by 2026.
• Chinese Capacity:
• No significant closures in China; newer plants remain operational.
Asset Turnover and Capital Investments
• Low Asset Turnover:
• Attributed to recent capital investments; expected to improve with increased capacity utilization.
• Flood Incident:
• Quick recovery from damage; insurance will cover losses.
Export and Import Challenges
• Export Delays:
• Caused by container availability and freight rates; expected to stabilize.
• Import Monitoring:
• Challenges noted, but the situation is being monitored.
Future Capacity Decisions
• Latex Production:
• Sufficient excess capacity in Taloja; decision on Valia latex capacity pending better margins in 3-6 months.
• Nitrile Latex Market:
• Accounts for about 10% of total sales; facing margin challenges due to competition.
Margin Outlook
• Gradual Improvement:
• Q1 showed slight margin improvement; expectations for Q2 to continue this trend.
• CAPEX Plans:
• Focus on reducing operating costs and maintenance, with significant R&D investments.
Conclusion
• Positive Growth Figures:
• Emphasis on increasing capacity and improving margins moving forward.

Apcotex Industries Limited Earnings Conference Call Summary
Announcement
• Date: May 9, 2024
• Transcript available from earnings call on May 7, 2024
• Discussion on Q4 FY24 and full fiscal year financial results
Financial Highlights
• Operating Income: Increased by 21% YoY to Rs. 311 crore
• EBITDA: Declined by 8% to Rs. 31 crore due to lower margins
• Net Profit After Tax (PAT): Rose 38% QoQ to Rs. 15 crore
• Total Revenue for FY24: Rs. 1125 crore, a 4% increase
• PAT for FY24: Fell 50% YoY due to rising costs
• Volume Growth: 34% YoY, with a 71% increase in exports
Business Challenges
• Nitrile Latex: Facing lower utilization rates and margin pressures
• Import Impact: Significant challenges for NBR, affecting pricing and market share
• Capacity Utilization: Taloja plant at 45% average, Valia plant at 30%
Management Insights
• Repurposing Capacity: Estimated 6-8 months and $2-3 million costs
• Debt: Net debt approximately Rs. 70 crore
• Volume Growth: Strong performance attributed to capacity expansion
Future Outlook
• Nitrile Latex Margins: Currently at historic lows, with no profits reported
• Capacity Utilization Goals: Aim for full capacity utilization as market conditions improve
• New Product Development: Focus on styrene butadiene and Nitrile Latex
ApcoBuild Segment
• Revenue Contribution: Minimal, in single digits, but growing at 18-20%
• Market Strategy: Focus on deeper penetration in existing states rather than new geographies
Conclusion
• Overall Performance: Strong volume and export growth despite challenges
• Focus Areas: Improving capacity utilization and margins in the upcoming fiscal year