Balaji Amines

Balaji Amines demonstrated a strong rebound in Q4 FY24, with consolidated revenue from operations increasing to INR 423 crores, marking a 7.9% QoQ growth. Consolidated EBITDA for the quarter stood at INR 106 crores, achieving a 25% margin, which represents a 400 bps expansion QoQ. Consolidated PAT also saw a significant increase of 28.6% QoQ, reaching INR 72 crores. For the full fiscal year 2024, consolidated revenue was INR 1,671 crores, a 29.5% YoY decline from FY23's INR 2,371 crores, with EBITDA at INR 353 crores (down 43.4% YoY) and a margin of 21%.

The company is actively pursuing several key expansion projects. Production of n-butylamines has successfully commenced at Unit IV, adding an annual installed capacity of 15,000 metric tons. The methylamines project is progressing well and is expected to be commissioned by the end of December 2024. Additionally, an Electronic Grade DMC plant, with a robust installed capacity of 15,000 MT per annum, is set for commissioning in FY25, targeting the promising India EV battery market. A Dimethyl Ether (DME) manufacturing project at Unit IV, a substitute for LPG, is slated for launch by March 2025, with a capacity of 100,000 tons.

Balaji Specialty Chemicals (BSC) Unit II, the company's subsidiary, is undergoing significant development with a total estimated CAPEX of Rs. 750 crores. The first phase of this expansion, focusing on products like sodium cyanide, triethyl orthoformate, and EDTA derivatives, will require an investment of Rs. 300-400 crores, which will be entirely funded through internal accruals. The subsequent second phase, requiring an additional Rs. 350 crores, may involve borrowing Rs. 50-100 crores. Once fully operational, BSC Unit II is projected to generate a minimum of INR 1,000 crores in revenue.

Balaji Amines is committed to enhancing its operational sustainability through renewable energy. The company plans to establish a 20-megawatt solar power plant with a total investment of approximately Rs. 120 crores. The first phase, an 8-megawatt capacity, is expected to be operational by December 2024. This initial phase is projected to cover 60-70% of the company's power bill, with the full 20-megawatt capacity intended to meet 100% of the company's power requirements after all planned expansions.

Management observed an improvement in demand, with Q4 FY24 volumes showing an 8.25% year-on-year improvement, and anticipates this positive momentum to continue into the next quarters. For FY25, the company has guided for a minimum 10% standalone volume growth, excluding new expansions, and expects to maintain an EBITDA margin in the range of 21% to 24%. While challenges from recycled material impacting specialty chemical margins were acknowledged, the company foresees increased NMP consumption driven by the growth of lithium battery companies.

The new methylamine plant, with a 40,000-ton capacity, is set to be fully operational by December 2024, with its entire output designated for captive consumption. This will enable the DMF plant to operate at over 70% utilization from the current quarter onwards. Piperazine capacity is targeted for a significant expansion from its current 150 tons/month to an estimated 400-500 tons/month, aiming to meet the country's consumption. The n-butylamines plant, with a 15,000-ton capacity, is expected to operate at 30-40% utilization in FY25, with potential for 70-80% utilization if domestic demand (8,000 tons) is considered.