Oriental Carbon and Chemicals (OCCL) Q4 18/19 earnings summary

Executive summary

• FY19 delivered profitable growth: revenue from operations rose 17% YoY, PAT increased 30%, and operating profit grew 25%; cost controls, capacity additions and stronger customer offtake supported results.

• Insoluble Sulphur remained the core business, with ~80% of revenue from customers of five years or more and exports contributing 58% of revenue; Duncan Engineering returned to profit after six years.

Financial highlights

• Standalone revenue from operations was ₹38,763.86 lakh, up 17% YoY; total revenue was ₹39,703.98 lakh versus ₹33,746.48 lakh.

• PBT was ₹10,257.48 lakh versus ₹7,963.31 lakh; PAT was ₹7,374.14 lakh versus ₹5,675.01 lakh, up 30% as reported.

• EBITDA was ₹12,941 lakh versus ₹10,383 lakh; reported margins benefited from attractive Sulphuric Acid realisations.

• Consolidated revenue was ₹43,200.77 lakh versus ₹37,376.09 lakh; PAT was ₹7,652.08 lakh, including ₹138.93 lakh attributable to non-controlling interests.

• Consolidated EPS was ₹73.45 from continuing operations; reported EPS including discontinued operations was also ₹73.45, versus ₹55.19 in FY18.

Outlook and guidance

• Dharuhera brownfield expansion approved for 11,000 MTPA of Insoluble Sulphur in two 5,500-MTPA phases, at estimated cost ₹216 crore; phase one targeted for Q3 FY21.

• Expansion plans also include increased Sulphuric Acid capacity, primarily to supply steam for expanded Insoluble Sulphur production.

• Growth expected from customer capacity programs, new approvals, US and Southeast Asian sales, and Indian tyre-maker expansions; the new Mundra line was expected to ramp fully in FY20.

• Acid contributions expected to face pressure as new North India capacity comes on stream; Oleum demand was described as stable.