Fine Organic Industries (FINEORG) Q4 17/18 earnings summary

Executive summary

• FY17-18 standalone revenue from operations, net of taxes, rose 9.56% YoY to ₹85,204.10 lakh; PAT increased 26.71% to ₹10,133.50 lakh.

• Consolidated revenue, net of taxes, grew 9.29% to ₹85,156.95 lakh; consolidated PAT rose 22.54% to ₹9,532.74 lakh.

• Growth plans target 67,000 TPA of added capacity over three years, with staged projects in India and Germany and a focus on export markets and new product categories.

• The IPO was an offer for sale of ₹600.17 crore; shares began trading on BSE and NSE on 2 July 2018.

Financial highlights

• Standalone revenue from operations, net of taxes, was ₹8,520.41 million, up 9.56% YoY; prior-year comparison is affected by GST treatment from 1 July 2017.

• Standalone operating EBITDA reached ₹1,639.76 million, up 11.79% YoY; EBITDA margin increased 39 bps to 19.25%.

• Standalone PAT rose 26.71% to ₹1,013.35 million; PAT margin increased 161 bps to 11.89%.

• Consolidated revenue from operations, net of taxes, was ₹85,156.95 lakh, up 9.29%; consolidated PAT was ₹9,532.74 lakh, up 22.54%.

• Standalone operating cash flow was ₹5,080.05 lakh versus ₹4,902.00 lakh; investing cash outflow increased to ₹5,202.49 lakh from ₹1,626.43 lakh.

Outlook and guidance

• Planned capacity additions total 67,000 TPA: Ambernath 5,000 TPA targeted Q2 FY19 and 32,000 TPA Q1 FY20; Patalganga 10,000 TPA targeted Q3 FY20.

• The Germany 10,000 TPA food-additives JV facility was expected on stream in Q1 FY21, subject to approvals; Zeelandia’s Patalganga premix facility was set up and trial runs had begun.

• New facilities are intended to support food, plastic, cosmetics and feed-nutrition additives, alongside higher-margin bakery and confectionery premixes and deeper global penetration.

• Management cited potential growth in domestic and overseas end markets, supported by product diversification, capacity expansion and in-house R&D; no quantified revenue or earnings guidance was stated.