Key Highlights

Started 10 years back the journey and today among top 5 companies in the world. The company has moved from a commodity player and from inorganic to specialities and more of organics.

Pigment revenue accounted for around 60% 5 years back and now around 89% of total revenue.

Exports are around 57% of total consolidated sales. Middle East and Africa are largest export market for the company.

The company is into all types of organic chemicals, speciality and high performance pigments, cosmetics, personal care products, prints, agro chemicals etc. The company has products catering to low end markets, plastic coatings and print inks and to high end specialty products in Automotives, colours, cosmetics and plastics space.

Going forward the company will continue to increase global presence. During Sep'16 quarter, the Chinese subsidiary became fully operational and Mexico and Brazil subsidiaries where opened.

70% sales come from direct sales and rest from distributors sales.

The company has targeted to launch around 30-35 products in FY'17 and similar number for FY'18 as well.

Overall, specialty market would be around US $ 5.5 billion market size and the market size of company's products will be of around US $ 3.5 billion. Plastic and coatings will be 50% of this market. Indian market size of plastics and coatings will be of around Rs 1500 crore.

Dec quarter is usually the weakest quarter for the company. Generally, Mar quarter make up for the lower Dec quarter.

The company has incurred capex of around Rs 50 crore on up gradation of R&D technology and new products will be further launched in Jan'17. For FY'17, the company expects total capex of around Rs 150 crore to be incurred in FY'17.

Overall, the company aims to spend around Rs 200 crore per year for next 5 years. Rs 4000 crore turnover is expected from capex of around Rs 1000 crore in next 5 years. Additional Rs 800 crore is required for working capital. Management expects ROCE of 30% and Ebidta margins of 15% on this expected turnover.

Sep'16 quarter numbers were disappointing on sales front. Middle East market like Saudi is not doing well and business have dropped there, Egypt and Nigeria didn't do well, EU markets also saw some slowdown in Sep'16 quarter.

Ebidta margins have improved in Sep'16, due to sourcing efficiencies gain.

Expects working capital to improve and margins to sustain going forward

Demonetisation effect has some effect on rubber, coating industry, plastic industries and suppressed demand was seen from these segments. Globally also, Middle East, Nigeria, Brazil, Egypt continue to see some challenges however, management expects things to come back in Mar'17 quarter. Overall, management expects to recover all the loss of sales in FY'17, in next year ie FY'18.