Alkyl Amines Q4 Results Review - Long-Term Volume Guidance Remains Intact: Motilal Oswal

Motilal Oswal Report

Alkyl Amines Chemicals Ltd. reported in-line revenue in Q4 FY23. Gross margin contracted to 46.4%. Ebitda was also in line at Rs 769 million with Ebitdam at 18.7% (up 80 basis point QoQ).

Operating expenses were higher due to elevated coal prices even as the company was able to maintain its market share in FY23.

The pharma industry outlook appears positive after a couple of years of drag post-Covid due to de-stocking on account of inventory buildup during the pandemic. That being said, the management focus and long-term guidance of 10-15% volume growth remained intact.

The average utilisation of both the acetonitrile plants was 60-65% in FY23 with current realisations being Rs 150/kg. In USD terms, it is one of the lowest s right now due to a glut in the market but the management expects the prices of acetonitrile to rebound in FY24.

Capacity expansion of Ethyl Amines in Kurkumbh (100 tonnes per day capacity) is on track and is expected to be commissioned by July 2023. Capex envisaged for the same is Rs 4 billion.

Alkyl Amines had also commissioned Di-Ethyl Ketone in February 2023, the plant of which has now stabilised with other four products set to be commissioned in the next 24 months.

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