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HDFC Securities Report
Alkyl Amines Chemicals Ltd.’s Q1 Ebitda/adjusted profit after tax was 95%/2.2 times above estimates, owing to the lower-than-anticipated impact of Covid-19 on sales volumes and higher-than-anticipated margins.
Margins were largely driven by three products, viz. pharma grade-Acetonitrile, DimethylamineI Hydrochloride and Isopropyl amine.
Concall takeaways:
1. Capex guidance for FY21 is revised to Rs 1.5-1.8 billion from Rs 2.5 billion as commissioning of the Acetonitrile capacity has been pushed to Q2 FY22 (earlier, Q4 FY21).
The Amines derivatives plant should commission in H2 FY21. At peak utilisation, both plants put together should contribute Rs 4-5 billion to the topline at current prices.
2. Alkyl Amines has 40% of the domestic Acetonitrile market share, and the increased pharma demand has widened margins for the product.
Export market and increase in domestic demand would be met by the expanded capacity of 15 kilo tonne per annum.
3. Demand across products is back at pre-Covid levels from July.
4. DMA-HCL capacity to be doubled by December 2020, given the current pharma demand.
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