Privi Speciality Chemicals Limited Q1 FY25 Earnings Conference Call Summary
Overview
• Date of Call: July 30, 2024
• Submission Date: August 2, 2024
• Key Management: President R.S. Rajan, CFO Narayan Iyer
• Focus: Strong performance in aroma chemicals sector
Financial Performance
• Total Income: INR 467 crores (13% YoY growth)
• Volume: 10,672 metric tons (up from 7,541 metric tons)
• Revenue Contributions:
• Pine-based chemicals: 59%
• Musk and specialty chemicals: 24%
• Citral-based aroma chemicals: 9%
• Exports: 68% of sales
• EBITDA Margin: 20.8% (up from 14.6% last year)
• PAT: INR 31 crores (up from INR 5 crores)
Growth and Expansion
• Greenfield expansion project with Givaudan expected by Q3 FY25
• Focus on sustainable growth through operational efficiencies and new product development
• Projected volume growth: 20-25% for FY25
Pricing and Margins
• Year-over-year pricing decline noted, but margins remain historically high
• Stable raw material arrangements support margins
• Operational efficiencies contributing to better margins
Value-Added Products
• Contribution to EBITDA increased from 1% to 4%
• Specialty products account for approximately 25% of revenue
Cost Management
• Significant reduction in other expenses per ton (from INR 70,000 to INR 50,000)
• Improved efficiency and cost control measures, including solar power usage
• Successful negotiations with freight forwarders to mitigate logistics costs
Regional Performance
• Growth in India and Asia, with slight growth in Latin America
• Focus on increasing sales in Latin America due to improved dollar availability
Acquisition and Integration
• Integration plans for Privi Fine acquisition underway, pending shareholder approval
• Expected return on capital from menthol project projected to increase by 200-300 basis points
Capacity and Demand
• Current utilization rates above 85%
• Revenue split: 65% from long-term contracts
• Focus on process innovation to enhance capacity for flagship products
Future Outlook
• Anticipated volume growth of 20-25% by end of FY25
• Stable or slightly improving margins expected as volume increases
• Ongoing innovations to optimize raw material usage and processing efficiency
Closing Remarks
• Commitment to growth and quality emphasized by management
• Gratitude expressed to team and stakeholders

Meeting Overview
• Date: July 1, 2024
• Submission: Transcript provided to National Stock Exchange of India and BSE on July 4, 2024.
• Leadership: Led by Chairman Mahesh Babani and President R.S. Rajan.
• Focus: Proposed strategic investment to acquire up to 50.95% of Privi Fine Sciences Pvt. Ltd. for INR 298 crores.
Acquisition Details
• Target Company: Privi Fine Sciences, specializing in specialty chemicals and aroma chemicals from renewable feedstocks.
• Backward Integration: Utilizes crude sulphated turpentine (CST) from pulp and paper mills.
• Investment Goals:
• Diversify renewable feedstock sources.
• Enhance manufacturing capabilities.
• Secure feedstock diversification.
Financial Projections
• Unit 1: Operational, expected to generate INR 109 crores in revenue for FY '25.
• Unit 2: Under development, focusing on converting corn cob into renewable chemicals, requiring INR 500 crores in capex over two years.
• EBITDA Margin: Projected at 20%, with an anticipated project IRR of around 25%.
Capital Expenditure and Funding
• Unit 2 Capex: Confirmed at INR 500 crores over two years, with an expected asset turn of 2x.
• Funding: QIP of up to INR 1,000 crores approved for various projects.
Product Development and Market Strategy
• Product Approvals: Ongoing communication with customers; confident in securing necessary approvals.
• Market Focus: Primarily on import substitution with exploration of export opportunities.
• Unique Products: First to produce Cyclopentanone and Furfural from renewable sources.
Technology and Innovation
• Bio-refinery Technology: Unique approach with few global competitors.
• Ethanol Byproduct: Margins lower, but overall ROI for bio-refinery is significantly higher.
Addressable Market
• Target Market: Includes both import substitution and global opportunities.
• Furfural Market: Valued at $950 million, with additional opportunities from derivatives.
Conclusion
• Commitment to Sustainability: Emphasis on sustainable practices and investment in new product pipeline.
• Future Operations: Unit 2 expected to begin operations in FY 2026-27.
• Gratitude: Acknowledgment of participants' involvement in the call.

Earnings Call Overview
• Date: May 3, 2024
• Key Executives: R.S. Rajan (President), Narayan S. Iyer (CFO)
• Focus: Financial results and industry outlook
Financial Performance
• Q4 FY24 Results:
• Record consolidated turnover: Rs 492 crores (22.4% YoY growth)
• Annual income: Rs 1,779 crores (9.2% increase)
• EBITDA: Rs 355 crores (71.1% increase)
• Profit after tax: Rs 95 crores (recovery from previous loss)
Industry Challenges and Opportunities
• Challenges:
• Slow demand and rising freight costs in the chemical industry
• Opportunities:
• Robust demand for aroma chemicals from FMCG and fragrance brands
• Commitment to sustainability and recent EcoVadis Gold rating
Growth Strategies
• Plans for production capacity expansion and improved product mix
• Projected growth:
• Volume: 15%-18%
• Value: 10%-12%
Raw Material Pricing and Sales Growth
• Rising raw material prices not the primary factor affecting sales
• 60-65% of revenue from fixed contracts with FMCG clients
• Potential price increases in spot markets due to supply shortages
Competitive Positioning
• Shift towards value-added products driven by innovation
• Strong R&D capabilities to enhance margins
Capital Expenditure and Financial Guidance
• Capex plans for high-value projects (menthol, peppermint oil)
• Target debt-to-equity ratio: ~1:1
• Projected EBITDA margins: 18%-20%
Market Insights
• Key export markets: Europe and the US, with growth potential in Africa and the Middle East
• Ongoing plans for capacity expansion based on customer demand
Employee Efficiency and Future Outlook
• Employee costs decreased by nearly 9% despite a 28% increase in volumes
• Stable EBITDA per ton despite growth in value-added products
• Commitment to growth and innovation in the aroma chemicals sector
Conclusion
• Executives expressed gratitude to stakeholders and reaffirmed commitment to future strategies and market leadership.

Privi Speciality Chemicals Limited Q3 FY24 Earnings Conference Call Summary
Conference Call Overview
• Date: February 16, 2024
• Participants:
• President R.S. Rajan
• CFO Narayan Iyer
• Moderator: Kamlesh Kotak (Asian Markets Securities Limited)
• Key Themes: Safety, sustainability, stakeholder satisfaction
Company Performance
• Revenue Growth:
• Year-over-year growth of 17%
• Slight quarterly dip noted
• Profit Margins:
• Improved margins due to cost control measures
• Anticipated stable margins moving forward
Challenges and Outlook
• Supply Chain Issues: Acknowledged challenges but optimistic about future growth
• Growth Projections:
• 25% volume growth and 10% value growth expected for FY24
• New product sales and established contracts as growth drivers
Investor Q&A Highlights
• Investor Presentation Request:
• Acknowledged by CFO Iyer; commitment to reinstating presentations
• Concerns Raised:
• Expansion, increasing borrowings, and declining return on equity (ROE)
• Iyer projected a turnaround despite recent challenges
Export and Market Conditions
• Export Exposure:
• 70% of business from exports
• 70-75% of order book secured for the year
• Market Preparedness:
• Optimism about navigating market uncertainties
Product Updates
• New Products:
• Capacity utilization expected at 75-80% for Galaxmusk, Camphor, and Prionyl
• Joint Ventures:
• Givaudan project expected to be 60-70% commissioned by mid-2024
Financial Metrics
• Debt and Inventory:
• Consolidated debt reduced to around 950 crores
• Inventory down to 690 crores
• Solar Energy Initiatives:
• Expected annual savings of 6 to 6.5 crores from solar installations
Future Growth and CAPEX
• Capital Expenditures:
• New investments required for sustainable growth
• Current capacity limits growth to around 10% from existing products
• Revenue Potential from Expansion:
• 400 crores spent on enhancing capacity for key products
Customer and Product Insights
• Pharma Application Approval:
• Positive responses for new application with planned capacity of 2400 metric tonnes
• Margin Profiles:
• Prionyl expected to have the highest margins, followed by Galaxmusk and Camphor
Conclusion
• Commitment to Excellence:
• Rajan expressed gratitude to stakeholders and reaffirmed commitment to industry leadership
• Transparency and Improvement:
• Iyer emphasized the importance of feedback and engagement with investors