Ladies and gentlemen, good day and welcome to Alkyl Amines Chemicals Limited Q4 FY2025 Earnings Conference Call Hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing the star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kumar Saumya from Ambit Capital. Thank you, and over to you, sir. Thank you, Steve. Good afternoon, everyone. Welcome to Q4 Earnings Conference Call of Alkyl Amines Chemicals Limited. From the management, we have with us Mr. Udipt Agrawal, Chief Commercial Officer; Mr. Chintamani Thatte, General Manager and Company Secretary; Mrs. Kanchan Chinde, Chief Financial Officer. I'll now request the management for an opening remark, post which we'll open up the floor for Q&A. Thank you. Over to you, sir. Thank you, Kumar. This is Udipt Agrawal here. Good afternoon, everyone, for joining our call today for our Q4 and annual performance review. Let me begin by giving a few opening remarks about the year that has just gone by, and then we will open the conference for detailed question and answers. As you might have seen in our results, we had a modest growth in the top line, but there has been a significant growth in our volume numbers. Because of the price drops, we see the partial impact coming into our top line. The good thing is that parallelly, also, the prices of the raw materials are also going down, so that also has a carryover effect in our margins, as you see it. Overall results, mixed bag, I would say, although there is a volume growth, but at the same time, the pressure on prices continues. All our major projects are moving forward as planned, as we announced last year. All the projects, this new project that was the A site, is moving as planned. We expect mechanical completion to be over by December of this year or January next year. We will see the impact of that in our numbers in the next financial year. I think we will have more and more clarity, and we have more discussions, and I will open the floor for the question and answer now. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Devansh, an individual investor. Please go ahead. Wish you a very good afternoon, sir, and had a good result in Alkyl Amines. Hello. Yeah, good afternoon, Devash. Please go ahead with your question. Can you please throw some colors on related to anti-dumping duty on acetonitrile and something related to it? Thank you. Yeah, as we all know, the Ministry of Commerce, DGTR, Department of Trade Remedies, Director General of Trade Remedies, announced the imposition of the anti-dumping duty on product acetonitrile originating for certain regions and countries. This is just an announcement from the DGTR. After this, there is another process, which is with Ministry of Finance, and that is still to be completed. Ministry of Finance typically has a 90-100 days window after the DGTR recommendations. The impact of that is not there as yet on our business. You are right, there is an imposition of anti-dumping duty on acetonitrile. Anti-dumping duty is imposed or not? This isn't just investigation running on, or did you get the anti-dumping duty by government? The investigation was completed by DGTR, Director General of Trade Remedies. They made a recommendation, and the Ministry of Finance has to approve it now. Okay. Okay. Okay, Okay, sir. Thank you. Thank you. The next question is from the line of Rikin Shah from Boring EMC. Please go ahead. Hi Rikin. Thanks for taking my question. If we can help break down, what kind of pricing pressure have we seen and volume growth have we seen this quarter? This quarter, volumes are more or less stable, around 4% to 5% growth compared to previous quarter. Compared to corresponding previous year quarter, there is significant growth of around 15%. Prices now more or less remain stable. Compared to last year, prices have dropped, but compared to previous quarter, the prices are stable. Margins are also stable. You can see stable EBITDA margins of around 21%. Sure. So is the pricing pressure more to do with the dimethylamine component, or is it a broad basket-based pricing we're seeing the pressure? It is, I think, across. It is across. Some product groups more, some product groups less. Ethylamines and methylamines, because of the demand-supply situation, are more under pressure. Acetonitrile, because of the continued dumping from China. Okay. All right. That's also my side. Yeah. Thank you. The next question is from the line of Nilesh from HDFE Securities. Please go ahead. Yeah. Good afternoon, sir. See, sir, in our previous conference call, you mentioned that the volume growth was about 8% to 10% in first half of FY2025. Can you guide us how much was the volume growth for full year FY2025? Around 13-13%. Okay. Top line growth was 9. Pricing pressure, I can see that about 4% because of the value, right? Right. Where do you witness pricing pressures? Is it in your specialty product or the ethyl or methyl chain? It is more so in ethyl chain and methyl chain because of the demand-supply situation here. That is really driving the prices down. Acetonitrile, we did not see any change in terms of the prices. China continued to dump, and prices kind of remained very stable at a low level. Marginal difference, few rupees plus minus, that does not have any significant impact on the overall situation. And, sir— Sorry, sir. Go ahead. I was saying the acetonitrile prices remain more or less stable, however, at a very low level. Okay. Okay. Sir, as you mentioned that in methyl and ethyl amines, there are pressures. Is it because of the—particularly in methylamine space—is it because of the capacity addition in the domestic market, or is it because of the China dumping? Methylamines as a product do not like to travel so much. It is primarily because of the local situation we have here in India. Methylamines are not imported into India from China. What we get impacted on methylamines is because of the agrochemical demand. Some of the agrochemicals are being imported into India from China. Primarily, and some of the derivatives are also being imported into India from China. That is creating a little pressure on the stream on the base methylamines margin. Okay. How do you see FY 2026 in terms of prices for all three categories of your product basket? I think methylamines and ethylamines will continue to have a similar situation. We will see how the acetonitrile plays out post the imposition of the anti-dumping duty, the impact of which we expect that should be sometime in quarter—financial year quarter two. Yeah. Second Second half, second part of the quarter two. Okay. And just on the update on your CapEx, sir, how the CapEx is moving, the product launch, at what stage the CapEx, the ongoing CapEx plan or the plan is? As I mentioned in the beginning, the announced CapEx are moving forward as planned. There is no change in that. Last year, we announced a CapEx of about INR 110-120 crore for a new product at the A site. That is ongoing. Other than that, there are a few other projects which are in the pipeline, but we have not decided as yet on the timelines of those, and the amounts are still also being finalized. We will be announcing as and when we are ready at this moment. Okay. Okay. Okay. Just last bit, can you tell us about the ethylamine demand-supply in domestic market overall? Nilesh, as you know, you have been following our company. As you know, there are two major segments of the ethylamine demand, which one is the pharma, and the other is the agrochemicals. Pharma side demand seems to be a little bit stable. Agrochemicals, it's up and down. It's a mixed situation, but more or less, I would say, is that there is a very small marginal increase in the demand over the years. That's on the demand side. However, on the supply side, you know it that we had expanded our capacity with the new plant in the previous financial year, 2023-2024. We have a new plant with the capacity. Other competitors also had their existing capacity. At this moment, it's an oversupplied situation in India. Okay. Okay. In terms of, can you quantify how much is the demand as per your assessment, domestic demand? We see a demand which is somewhere—I mean, I can give you a range. It depends on how you look at it. Because there are a few derivatives also. We generally also do not comment on the capacities and demand numbers. Directionally speaking, since you have asked it, somewhere around, I would say, 25,000-30,000 tons. Are you? Yeah. Yeah. Thanks. Thanks a lot. Thanks a lot, sir, for patiently answering all my questions. You're welcome. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Parker from Ambit Asset Management. Please go ahead. Yeah. Good afternoon. I'm doing my consulting research for the opportunity. So my first question is that assuming that the DGTR recommendation goes through, is it correct to say that? Hello? Yeah. We are not able to hear you clearly. Can you hear me now, sir? Yeah. Better now. Thank you. Yeah. Yeah. So I'm saying that if the DGTR recommendation on acetonitrile anti-dumping duty goes through, then is it fair to assume that there could be an increase in realization range of around 15%-20%? Hard to say. Hard to say, honestly speaking. As you read the recommendations of DGTR, I think the lowest is $205 or $207 per metric ton. And highest— Yes. Yeah. Highest goes to $480 per ton. I think floor gets settled at the lower end, generally, in the commoditized or semi-specialties markets. We also have to see after this, once the Ministry of Finance accepts the recommendation, how is the approach of the other importers into India? I mean, primarily the Chinese. I mean, what is their philosophy around pricing? Okay? We will have to play, but we have to wait and watch how it will play around. Overall, it should help us to improve our position in the market, I would say so. What is the current pricing for us in acetonitrile, sir? Our current pricing is similar to what we had said at the last call, also around INR 140-INR 150. Okay. Okay. Thank you. Secondly, sir, we believe that this demand for GLP-1 drugs is now rising. Is it fair to say that every ton of GLP-1 drug will require about 15 times acetonitrile? This is true that the demand for these kinds of molecules is rising. These kinds of applications in the pharmaceutical industry is rising. No doubt about it. More and more pharmaceutical companies are trying to enter into this market segment, which seems to be very lucrative. This is still early stages. People are talking about, or the customers of ours are talking about significantly higher volumes in this area. At this moment, we are also trying to assess whether it is really like this, as you described, I mean, multiple times, the demand. I also understand that let's be optimistic about it. At the same time, we also know that as the drugs go generic in nature, there is also a process engineering which happens. The prices of the finished goods also come down, resulting in the raw materials as well. The pressure comes onto the raw materials as well. Directionally, yes, your information is correct. There is a larger demand or upcoming demand in these kinds of applications. Basically, we are in touch with those customers as well, right? I mean, we are also, meaning once the opportunity for activized, we'll also be benefited. Yes. True. Okay. Does our name also feature in the filing for these so that there is some entry barrier or no? What do you mean? I mean, can you come again? I did not. Meaning these GLP drug manufacturers, do they have to sort of disclose to someone that they are buying acetonitrile from a particular company, or it does not work like that? Again, the answer is yes and no. If it's going for the innovator, producing it, the innovator, they probably might have to specify. But yeah. Sure. Sure. These are the key raw material suppliers or key solvent suppliers, which is generally there. I mean, when you file a Drug Master File, DMF, they call it. If you are included, you are included there. Then the name is there. Okay. Great, sir. Thank you very much. All the very best, sir. Thank you. Thank you. The next question is from the line of Rajiv Rupani, an individual investor. Please go ahead. Yes, sir. Thanks for the opportunity. Sir, I had a question. The U.S. has placed tariffs on China for many goods. I would like to understand, is there additional pressure or dumping by China to India for our products? Could you please clarify? The U.S. tariff situation is an evolving situation. What will happen in July, we do not know at this moment, right? To answer your question, the second part, which is more interesting and more relevant for us, is impact on us with respect to China dumping more into India. In our kind of product, we have not seen that as yet. It depends on what happens in the next couple of months in the U.S. At this moment, no. We have not seen that impact. It is speculation, but the theory is right. I mean, if China would be less and less competitive in the U.S. market, all those capacities need to find a new home. India, which has already been a dumping ground for the international producers, I expect the intensity to increase. That was helpful. My next question was, the products which you are going to introduce in the future, would we be the only producer in India for those products? There are other producers, but with smaller capacities. Okay. My last question is, this PLI scheme for pharma which the government has announced, when does that benefit accrue to us in the future? Not into the pharmaceutical industry. It is our customers who might get some benefit from it. Okay? We are a raw material supplier to the pharma industry. Okay. Thank you. As yet, I don't think there is any PLI scheme for the chemical or specialty chemical industries. It has been in the works for the last so many years. We have been hearing about it, but nothing concrete at this moment that we are aware of. Okay. Thank you. Thanks, Rajiv. The next question is from the line of Mehul from 40 Cents. Please go ahead. Hello, sir. Thank you so much for the opportunity. I have a question on the earlier question about new products. What are the products which we are going to manufacture, the new products? As a policy, we do not announce it. Of course, some of the customers where we have tested it know about it. As a policy, we do not announce it. When the product is ready and we start selling, we will be announcing. Okay. What are the timelines, sir, for the new products? As I said, the CapEx is going on, and we expect mechanical completion December this year or early January 2025. Post that we would be launching the products in the market. We will see some impact of that showing up in the next financial year. Right. Sir, in the earlier discussion, you mentioned about that the tariff situation is evolving, as we all know, but you also mentioned that we will know in July. Please pardon my ignorance, but can you just share what are you referring to when you say July? Yeah. July, because there was an announcement from US side that the window is for 90 days or 100 days, and that period was ending in July. That's what the timeframe I was referring to. Right. Right. And one more question, follow-up question on the CapEx. Information, and which may change at any point in time. I mean, we heard about a new trade pact or new deal between China and the U.S. yesterday. The situation is evolving, as I said. Every day seems to be a new day. Yeah. Yeah. I mean, yeah, we are in a very dynamic world in terms of geopolitics. Sir, on the question on the CapEx for the new products, which site are you having the CapEx being done on, which site of Alkyl Amines? It's there in Dahej. Dahej. I'm just new to this company. How many sites do we have other than Dahej? We have three sites. The company started manufacturing products at a site called Patalganga, which is on the outskirts of Mumbai. The second site, which is probably the largest also, is in Kurkumbh. MIDC Kurkumbh. And the third one is in GIDC Dahej. Okay, sir. Thank you so much, and all the best. Thank you. The next question is from the line of Rithrak Shreja from IThought Financial Consulting. Please go ahead. Thank you for the opportunity, sir. I'm very new to the business, so please bear with me. What would be the capacity utilization across different plants? Average is around 60-70% across all the plants. Some are in the range of 80-85%, some are between 50% and 55%, but average is 60-70%. This is also a little bit could be different because if you're talking about at the finished goods level, it could be a little different because so many products which we also derivatize. For example, methylamines, we also derivatize. So their base utilization would be different. That's why Kanchan mentioned that at an average level, the utilization is in that range. Sir, on an average, at best, what would be our highest utilization level? Around 85%. Some plants 80%. Understood. Understood. Thank you. Thank you. The next question is from the line of Rajiv Rupani, an individual investor. Please go ahead. Yes, sir. I had a follow-up question on the new products. So could you just at least guide us the new products? Is it going to be on the specialty chemical side, or there are derivatives of amines? There's more on the specialty chemical side, Rajiv. Okay. Thank you. Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Kumar Saumya from Ambit Capital. Please go ahead. Hi, sir. A couple of questions from my side. This year, every quarter, we have been in the range of EBITDA margin has been in the range of 18-20%. Do we see the room for improvement in the next sector? EBITDA margin in the range of 20%. Yeah. EBITDA margin is 21%. Last year, it was around 19%. So our average, if you see in the past, it is around 20-21%. So we are now stabilized at that. Do we expect to improve to around 21% net in the next financial year? Difficult to say, but at present, we do not foresee any because pressure on prices continues to remain as in past years. Got it. And then about the CapEx, what is the total CapEx apart from that INR 100 crore Dahej CapEx? Do we have any more CapEx that we are planning to do justice to? It's around INR 150 crore. That is from carry forward projects from past year also and some new projects in current year. Around INR 150 crore we forecast for next year. This includes INR 100 crore at Dahej, right? Yes. Yes. Out of INR 100 crore, we have already spent something in last year also, no? Yeah. Yeah. All around. And then this year, what was the total exports that we have done? This year, what was? Total exports. Total exports. Exports, generally, it is around 20% of the total sales. 20, 18. Right. Generally, it has continued to remain. Okay. Okay. Thank you, ma'am. I'll come back and listen, ma'am. Thank you. Thank you. The next question is from the line of Devansh, an individual investor. Please go ahead. Hello. Yes, sir. Sir, just wanted to ask about its bottom for the cycle because I just noticed that Promoter Group Project Trading Company is buying their shares from open market. Because it's a good sign to add quantity at that price. Can you please share some thoughts on it? It's difficult to say. Now, in market, what is the bottom level? We never know. Sir, ma'am, sorry to say, but as you mentioned, sometimes you are getting anti-dumping duty, and this will directly impact your margins too and impact on volume growth too. We are optimistic about the volume growth and overall growth in the coming years. Okay. Thank you. Thank you. The next follow-up question is from the line of Varga from Ambit Asset Management. Please go ahead. Yes, I just wanted to know one thing. What is the probability that the Ministry of Finance may reject the DGTR recommendation? I mean, in your past instances, is there any case where it has happened? Yeah, it can happen. In our case also, when we had the sunset review for our product, monoisopropylamine, that time, Ministry of Finance, it did not go through the Ministry of Finance. There have been instances, but we also see that of late, quite a number of or most of the cases are also going through Ministry of Finance. Ministry of Finance generally accepts the DGTR recommendation. That is what I am trying to say. Okay. Great. Thank you. Thank you so much. We have to keep our fingers crossed till the time final notification from Ministry of Finance is out and available to everybody. Sir, does the pricing immediately improve, or there would be some low-cost inventory also in the system? Once that inventory gets absorbed, and then just to get some sense? I think there would be every time, there would be an inventory effect for sure, yes. Let's not forget that it will not only help us, it will also be the same conditions are also applicable for other producers of acetonitrile in India. No, no, sir. I was referring more to the Chinese dumping which they do. Is it that before this anti-dumping duty announcement, they would preempt it and flood the market, or from that perspective? I think there would be some inventory effect. Yeah. Okay. Okay. Understood. Thank you. Thank you very much, sir. Thank you. The next question is from the line of Westel Shah from Kingstone Capital Management. Please go ahead. Hi. Thank you for taking my question. I wanted to ask the split between amine, amine derivatives, and specialty chemicals from revenue point of view. Around 50% is from amine, and 30% is from derivatives, and around 18-20% from specialty chemicals. Okay. From what I understood was from amine and amine derivatives side, the problem is on the oversupply situation in local market, and specialty chemicals, the problem is for anti-dumping duties. Is that correct? In terms of amine derivatives, not the base amines, which is the methylamines and the ethylamines, there is an oversupply situation, yes. Specialty products, if you look at it, we say that there's a margin pressure because of dumping from China. At the same time, if you look at our revenue shift or revenue growth, it's also similar across all three segments. We are growing across all segments: amines, amine derivatives, and specialty products. Got it. Now, I was trying to gauge the situation more from the point of view of recovery. If there is an oversupply situation for amine and amine derivatives, how long will it persist? Yeah, the major oversupply situation is in the amines, which is the methylamines and ethylamines, base amines. There is a significant overcapacity. We also have to keep this in perspective that when we build these plants, these plants are built for the long term. Because these are large capacity process plants, it's difficult to put up smaller capacity plants every two years. Everybody who puts up these kind of plants, they plan it for the future, not for the short-term demand. From that perspective, I think it will take a while for the capacities to be absorbed in the domestic market. Got it. Can you also share the amine and amine derivatives industry growth rate? What is the current industry growth rate? Primarily, we find applications in pharmaceuticals and agrochemical applications, and you know how the bulk has been growing. I'm not talking about the formulations that grow late. So that's typically 6-8%. Got it. Volume-wise, we are looking for around 10% in the next two years? Yeah, we are looking at a double-digit volume growth. Okay. Marketing is yes. Got it. Okay. Thank you. Thank you. The next question is from the line of Rajiv Rupani. Please go ahead. Yes, sir. I had a follow-up question on ACN, acetonitrile. Sir, what I believe is our competitor is commissioning a 60 metric ton a day plant of ACN, which will be commissioned by FY 2025-2026. And the domestic demand is about 30,000-35,000 tons. What do you think will be the impact on the price of ACN when their plant comes up? Will we suffer some price damage, and capacity utilization will be less for us? It depends on the timing of the capacities which come into the picture. If you look at the basic rule of demand-supply, if there is an oversupply situation in the market, yes, then it has an impact on the overall profitability of all the industry players. It's not only us. That principle does not go away anywhere. As and when somebody expands or new capacities come on the stream, this kind of phenomenon is observed in the market. Thank you. Thank you. A reminder to all participants that you may press star and one to ask a question. The next question is a follow-up question. It's from the line of Westel Shah from Kingstone Capital Management. Please go ahead. Yeah. Thank you for the follow-up. There was news about RC Trucks backward integrating into some of your products. Is RC Trucks a significant customer of yours, or what will be the impact from them backward integrating into methylamines? There is a news which we are also following up. We are also tracking at what point in time they would be able to come in the marketplace. We will see as and when it happens. Methylamines may sound simple products, like it's a one-step reaction of alcohol plus ammonia. It is not so simple to produce. Of course, since they have invested into it, they will learn and come on the stream. Again, the same logic applies here as well. Whenever there is a new capacity and the market becomes oversupplied, there is a pressure on the margins. Got it. Are they a significant customer of us, or is it negligible? I would not say significant, but it's not negligible either. They have a decent demand, I would say. There are other customers who have a similar demand. Okay. Got it. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one. The next question is from the line of Kumar Saumya from Ambit Capital. Please go ahead. Hi, sir. So just one question. During the quarter, how was the demand in particular for this quarter? Was it similar to what we saw in the last nine months, or some new development or some underlying demand trends were a little different that you observed? In this particular quarter, I would say the demand was slightly on the lower side, market demand. That is not because of any kind of fundamentals changing or any macro indicators. It was more because certain customers were down, and they were not able to produce, and/or availability of other raw materials from that standpoint, but not because of any fundamental change in the market, which can happen in any quarter. I would say the underlying still remained the same. No deterioration in the fundamentals. These customers that you are talking about, were they from pharma segment or agrochem segment? I would say more on the applications of the specialty chemicals segment. Okay. Got it. Are they back to normal, or are they still struggling some? No, I think they are back. Okay. That's why I said there's no change in the fundamentals of this. Got it. Got it. That was very helpful. Thank you. Thank you. The next question is from the line of Rajiv Rupani. Please go ahead. Yes, sir. I have a follow-up question. By when do you think this pricing pressure on ethylamines and methylamines goes away? Since you and your competitors have a good capacity, how much time do you think will it take for capacity utilization to improve and the prices to improve? A year or two or three years? Could you just guide us? It will be a little longer. I wish it happened sooner, but it all depends on the demand development. At this moment, if you look at the capacities, there is massive overcapacity. One of your participants in the call also mentioned the RT industry or RT trucks impact. The market is going to remain long in the next few years. Thank you. That was helpful. Thank you. The next question is from the line of Simpreet Singh. Please go ahead. Hello. Good afternoon. I have a younger child who is the TEPS-2 utilization person. Can you list what is the TEPS-2 utilization currently for our plants? To repeat your question, your voice was very clear. I think your question is more related to the capacity utilization of our plants, right? Yes, sir. Yeah. So it's around 60-70% average utilization. Okay. And one more question. Like recently, promoters are buying the stakes. So are both considered any buyback or any form of reward for the shareholders? No, we are not aware about any of this. Okay. Ma'am, one feedback. This time, I didn't see any investor presentation on the website or on the exchange. So that's the only way for us, for a small shareholder, to reach the management or see the presentation. Yeah. Tomorrow, maximum, the presentation will get updated. Okay. Okay. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thanks, everybody, once again, for joining the call, listening in, and spending the time with us. I hope we have been able to answer some of your queries, and we look forward to your continued support in the future as well. Sorry to interrupt, sir. There's a question. Yeah, please. It's from the line of Divinch. Please go ahead. Just wanted to ask any guidance regarding for this FY 2025, or maybe you can guide some volume expectations or your views on your demand and supply? We expected double-digit growth in next year, around 10-15%, which we have been achieving. On volume growth, it will remain. Prices, we will continue to have some pressure on prices, but let's see. It's too early to comment on how prices will move. Yeah. Got it. Got it. Thank you so much. All the best for your upcoming visit. Thank you. Yes, sir. There are no questions. You can carry on with your closing comments. I was saying just thanks to everyone for listening in. Looking forward to the continued support. And just now mentioned, we remain optimistic for the future, but at the same time, preparing ourselves for the challenges ahead. So cautiously optimistic approach as we move forward into the next year. The good part is that our customers are growing. The market demand is the market is not going anywhere. The opportunity in India is large enough for us to be able to drive the growth. And with this, again, thank you for listening in, and thank you, Ambit, for us. Thank you. Thank you, everyone. Thank you. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.