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Motilal Oswal Report
Alkyl Amines Chemicals Ltd. reported a beat in revenue versus our estimate, with Ebitda being 15% above our estimate.
Gross margin contracted in line with our estimate at 44% in Q4FY22 – the lowest in the last 11 quarters. Hence, the downward trend in margin continues.
Raw material prices continue to rise along with an increase in other expenses that pose a challenge for Alkyl Amines to resurrect its margins. Energy costs shot up sharply, especially in H2 FY22, with coal and ammonia being the major drivers of this price rise. However, the company did manage to pass on some costs to the end-customers.
Ebitda margin was the lowest in the past 12 quarters at 17.3% in Q4 FY22. That being said, capacity expansion in Methyl and Ethyl Amines and capacity utilisation ramp up of the recently expanded Acetonitrile plant should drive better margins in FY23-24E for Alkyl Amines.
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