Earnings Call Overview
• Date: February 5, 2024
• Executives Present: Akshat Goenka (Joint Managing Director), Anurag Jain (CFO)
• Key Issues: Decline in revenues, reduced demand, increased competition
Financial Highlights
• Q3 FY24 Total Income: INR 88.6 crores (down from INR 102.9 crores in Q3 FY23)
• Profit After Tax: INR 6.1 crores (down from INR 10.4 crores)
• Nine-month Total Income: INR 293.4 crores (down from INR 363.8 crores)
Industry Outlook
• Positive long-term outlook driven by:
• Growth in the automotive sector
• Demand for high-quality tires
• Challenges: Regional demand weaknesses, particularly in Europe and Asia
Sustainability Initiatives
• Investment in solar power to reduce energy costs
Management Insights
• Product Mix Strategy: Projected 5% growth for insoluble sulfur
• Current low margins for sulfuric acid due to subsidy issues
• Demerger process nearing completion, focusing on insoluble sulfur and sulfuric acid segments
Market Conditions
• Oversupply from China affecting pricing
• Stable prices for sulfur expected in the near term
• Anticipated improved performance in Q4 despite volume decline
Customer and Market Strategy
• New business secured but below expectations
• Concerns about "China Plus One" strategy and market share
• No viable substitutes for insoluble sulfur currently emerging
Financial Management
• Long-term debt: INR 73 crores
• Discussions on potential share buybacks and returning excess funds to shareholders
Future Plans Post-Demerger
• Goal: Unlock value for shareholders through distinct business entities
• Investment business to operate independently without fund diversion
Additional Inquiries
• Handling of promoter's stake in Duncan Engineering post-demerger
• Low fixed asset turnover ratio attributed to low capacity utilization
• Most sales made directly to customers
Conclusion
• Call concluded with an invitation for further inquiries from participants.