Himadri Speciality Chemical (500184) Q4 09/10 earnings summary

Executive summary

• FY09/10 net sales crossed Rs. 500 crore and net profit crossed Rs. 100 crore; growth reflected higher production, richer product mix and stronger realisations.

• Integrated operations expanded from coal tar pitch into carbon black, SNF, advanced carbon material and captive power, with new capacity commissioned during the year.

Financial highlights

• Net sales rose 34.74% YoY to Rs. 50,593.23 lacs; EBITDA increased 54.01% to Rs. 19,793.58 lacs.

• EBITDA margin increased 489 bps to 39.12% from 34.23%; PAT rose 129.47% to Rs. 10,733.98 lacs.

• Basic EPS increased 120% to Rs. 32.34 from Rs. 14.70; cash profits rose 127.57% to Rs. 17,326.44 lacs.

• Domestic net sales grew 32.38% to Rs. 40,677.89 lacs; export net sales rose 45.37% to Rs. 9,915.34 lacs, or 19.60% of total net sales.

Outlook and guidance

• Management expected attractive growth in FY10/11 and beyond, supported by capacity additions, value-added products and demand from downstream industries.

• First phase of a 300,000-TPA coal tar distillation expansion was underway, targeted for completion in 18 months; long-term India capacity goal was 1 million TPA.

• First phase of a 200,000-TPA SNF expansion was planned; phased advanced carbon material capacity increases and carbon black expansion were also intended.

• China coal tar pitch project construction was in progress; overseas opportunities were also being evaluated in other fast-growing regions.