Detailed Narrative
Forward-Looking Growth and Margin Outlook
Accent Microcell is targeting a robust 15-20% CAGR for the company over the next 3-5 years. This growth is expected to be supported by an improved product mix, leading to a weighted average EBITDA margin of 20-22% going forward⏳, up from approximately 16% in FY25. The company anticipates a positive impact on MCC globally, with the market CAGR expected to increase by 1-1.5% from the current 5-6%.
Unit 3 Capacity Expansion and Product Strategy
The company's new Unit 3 is being developed in two phases. Phase 1, with a capacity of 2,400 MTPA for premium excipient products, is slated for commissioning by October/November 2025 and is expected to achieve 60% utilization in its first year. Phase 2, dedicated to MCC with a capacity of 12,000 MTPA, is targeted for commissioning by July 2026. The total future capacity across all units will be 24,000 MTPA, with 21,600 MTPA for MCC and 2,400 MTPA for premium excipients.
New Product Mix and Pricing
Unit 3 Phase 1 will focus on value-added products like CCS, CMC, and SSG, with CCS expected to comprise 70% of the mix, and CMC and SSG each 15%. The PAT margin for CCS on a standalone basis is projected at 25%. Premium products are expected to have a realization of approximately 3.5 times that of MCC, which currently sells at ₹230 per kg for exports and ₹180 per kg domestically.
Strategic Customer Acquisition and Market Dynamics
Accent Microcell has secured a significant new multinational customer for microsterized cellulose, with substantial volumes expected in the coming years. This win follows a 3-4 year approval exercise. The company also noted increased inquiries and business due to an unfortunate incident at a competitor's plant, particularly in the oral pharma segment. The global MCC market size is estimated at 250,000 metric tons, with India accounting for 50,000 metric tons.
Capital Expenditure and Funding
The total capital expenditure for Unit 3 (Phase 1 and Phase 2), excluding land, is estimated to be between ₹105-110 crores. Phase 2 alone accounts for approximately ₹55-60 crores. The company recently raised ₹40 crores through a rights issue, and management indicated that a nominal amount of debt could be considered for working capital requirements, though current debt levels are negligible.
Raw Material Sourcing and Supply Chain
Accent Microcell primarily imports 95% of its major raw materials from countries like the USA, South Africa, Sweden, and Indonesia. Ancillary products are sourced locally within India. Management does not anticipate any negative impact on sourcing due to geopolitical tensions, as their current import territories are stable.
Export Strategy and Debtor Days
The company's new products are expected to have a 70% export and 30% domestic supply mix. Current exports constitute around 61% of total turnover, with North and South America accounting for 55%, Europe 8-10%, Australia 5%, and Asia/Africa 30-35%. Debtor days have increased over the last two years, attributed to offering more liberal payment terms to Indian MNCs to gain a competitive edge in the domestic market.