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    20 Microns

    20MICRONS
    Metals & Mining·27 May 2025
    Management Summary

    20 Microns delivered a robust performance in Q4 and full year FY25, achieving ₹912.7 crores in annual revenue, marking a 17.4% YoY growth. The company demonstrated improved profitability with Q4 EBITDA margins at 12.7% and maintained FY25 EBITDA margins at 12.8% amidst market and geopolitical challenges. Strategic initiatives included a Malaysian acquisition, significant CapEx in the Nano subsidiary, and a continued focus on value-added products, while managing increased working capital requirements driven by strategic inventory build-up for imported raw materials.

    Highlights

    8

    • Annual revenue for FY25 reached ₹912.7 crores.

    • Annual revenue growth for FY25 was 17.4%.

    • Q4 FY25 revenue grew 6% over Q3 FY25 and Q4 FY24.

    • Q4 FY25 EBITDA margin improved to 12.7%, compared to 12.2% in Q3 FY25 and 12.5% in Q4 FY24.

    • FY25 EBITDA margins were maintained at 12.8%.

    • Q4 FY25 bottom line (PAT) augmented to 6.7%, up from 6% in Q3 FY25 and 6.4% in Q4 FY24.

    • Dividends were declared at 25%.

    • Borrowings increased from ₹121 crores to ₹165 crores in FY25, primarily for working capital due to inventory build-up.

    Concerns

    1

    • Dependency on imported raw materials (36-37% of total usage) and supply chain disruptions

    Key financials

    Metrics

    6

    Periods

    5

    Headline

    1
    • Annual Revenue
      ₹912.7 Cr
      YoY+17.4%

    Q4

    1
    • Revenue Growth
      6%

    Q4 FY25

    2
    • EBITDA Margin
      12.7%
    • Bottom Line Margin
      6.7%

    FY25

    1
    • EBITDA Margin
      12.8%

    FY25 end

    1
    • Borrowings
      ₹165 Cr

    Segment breakdown

    Paint Sector
    48% Revenue Share
    Polymers
    25% Revenue Share
    Rubber, Paper, Ceramics & Other
    5% Revenue Share9% Revenue Share (Upper Range)
    Exports
    13% Revenue Share
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Gross ₹165 crores

    M&A

    GTLQ and IQ (marbles) (Malaysian subsidiaries)

    acquisition · Other

    Liquidity

    Liquidity disclosed

    Cash accruals (Net proceeds of long term borrowing) from consolidated balance sheets were ₹9.79 crores.

    Guidance & targets

    2
    CategoryTargetPriority
    Revenue
    Annual Revenue Growth
    15-18%
    		Medium
    Revenue
    Value-added segment revenue growth
    18-20%
    		Medium

    Finalization and disclosure of Malaysian subsidiary acquisition cost

    next quarter
    CurrentOngoing discussion, amount not finalized
    TargetSpecific acquisition cost disclosed

    Why it matters

    Provides transparency on the financial impact of a key M&A event and completes the acquisition narrative.

    Yeah, we will disclose it sooner when the amount gets finalized. But it would not exceed a significant value than what we currently have negotiated with.

    How to verify

    capital_allocation.m_and_a[0].consideration.amount

    Risks & concerns

    3
    RiskSeverity

    Market and geopolitical scenario, raw material imports, freight cost, and forex volatility

    Despite these challenges, the company maintained its EBITDA margins at 12.8% in FY25 through operational excellence. — Management acknowledged

    medium

    Global economic situations impacting supply chains and stress in the paint sector

    These factors create uncertainty and make trends vague, influencing the company's growth outlook. — Management acknowledged

    medium

    Dependency on imported raw materials (36-37% of total usage) and supply chain disruptions

    This dependency necessitates building up inventory due to freight factors and vessel availability, impacting working capital. — Management acknowledged

    high

    Q&A highlights

    8

    “So in IQ (marbles) we have 86.68% ownership of the company and in GTLQ we have about 90% ownership of the company and 10% is with the minor stakeholders. And the process is ongoing to get the remaining shares... we will disclose it sooner when the amount gets finalized. But it would not exceed a significant value than what we currently have negotiated with.”

    Clarifies current ownership structure of the acquired Malaysian subsidiaries and indicates future disclosure on the full acquisition cost, which is a key M&A event.

    asked by Arjun Shah

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 FY25 and Full Year Performance Highlights

    20 Microns reported a strong close to FY25, with annual revenue reaching ₹912.7 crores, reflecting a 17.4% year-on-year growth. Q4 FY25 revenue saw a 6% increase compared to both Q3 FY25 and Q4 FY24. Profitability also improved, with Q4 FY25 EBITDA margins at 12.7%, up from 12.2% in the previous quarter, and the full-year EBITDA margins maintained at 12.8%.

    02

    Strategic Product Portfolio and Market Reach

    The company's diversified product portfolio includes non-metallic industrial minerals like Calcium carbonate, Talc, Kaolin, and specialty chemicals. The paint sector remains the largest contributor at 48% of revenue, followed by polymers at 25%. Exports contributed 13% to the total revenue. 20 Microns operates across 65 countries with over 200 clients, supported by 9 manufacturing locations and 15 warehouses across India.

    03

    Malaysian Acquisition and International Strategy

    20 Microns successfully completed a Malaysian acquisition, including GTLQ and IQ (marbles), where it holds 90% and 86.68% ownership respectively. The process to acquire the remaining minority shares is ongoing, with management indicating that the final amount will be disclosed once finalized and is not expected to be significantly higher than current negotiations. Mining operations in Malaysia are expected to commence within the next two months, which will reduce dependency on external suppliers and potentially enhance margins.

    04

    Capital Allocation and Debt Management

    The company's borrowings increased from ₹121 crores to ₹165 crores in FY25. This increase was primarily driven by the need for working capital to support additional inventory build-up, a strategic move to mitigate supply chain risks associated with imported raw materials. Management emphasized a strategy of reserving cash accruals for CapEx, which is expected to be significant this year for capacity expansion and mine acquisitions, rather than using it for working capital.

    05

    R&D and Competitive Edge

    20 Microns highlights its competitive advantage through a comprehensive product basket, ranging from traditional minerals to advanced nano minerals. The company's strong focus on research and development, supported by well-equipped R&D facilities and application centers, enables it to innovate and offer import substitutes. Recent recognition from DSIR (Government of India) further validates its R&D capabilities, offering benefits like discounts on machinery imports and enhanced credibility with customers.

    06

    Outlook and Industry Dynamics

    For FY26, 20 Microns targets a 15-18% year-on-year revenue growth, acknowledging the vague trends in the market and stress in sectors like paint. The value-added segments are expected to grow at an 18-20% rate over the next 2-3 years. The company anticipates increased demand for paints in India due to urbanization and low per capita consumption compared to Western markets, despite current industry conditioning.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.