Chemcrux Enterprises suffered only a 7% revenue drop and 17% EBITDA drop in FY21, despite losing over 23% of productive days due to plant closure, and Covid related production constraints in FY21.
Highlights of the FY21 results:
- FY21 full year sales came in at Rs 533m, 7% drop over sales in FY20. Revenue in H2 FY21 was down 17% on a y-o-y basis. This was due to a 77-day closure of Chemcrux’s plant in H2, taking away around 40% of productive days of H2 FY21.
- Combined with a 9-day closure in H1, Chemcrux lost around 23% of productive days in FY21. Besides the company also had to operate at less-than-optimal capacity utilisation in April and May’20 due to lockdown in the first phase of Covid.
- Revenue drop is in single digits in FY21 despite production constraints faced due to better pricing environment for Chemcrux’s products.
- Operating EBITDA came in at Rs 126m, a drop of 17% over FY20, a reflection of lower sales.
- Balance Sheet position improved further in FY21. Cash and equivalents were Rs 113m as on 31 Mar’21, as compared to Rs 93m as on 31 Mar’20. Net cash (subtracting total debt) increased to Rs 109m as on 31 Mar’21, as compared to Rs 83m as on 31 Mar’20. This is despite a Rs 50m capex spend in FY21.
For the stock there can be drivers for FY22. If there are no production disruptions, Chemcrux should be report a 20% topline growth to cross Rs 60 crore in revenue and recover its EBITDA margins to over 25%. The other driver can be any positive development on its expansion plan. The company was not been able to get environmental clearance in FY21 from Gujarat Pollution Control Board (GPCB). In case, it is able to get it in FY22 for its existing site, it would be a positive development. If GPCB declines approval for the current site, then the company will have to find a greenfield site, which could push back its expansion plans further.
PS: Chemcrux Enterprises is a Specialty Chemical company listed on the BSE SME platform. It makes import-substitute chemicals that go into manufacture of pharma APIs and pigments. Some of its key products are variants of Chloro Benzoic Acids and Nitro Benzoic Acid. Wisdomsmith’s Investor Relations team (WISDOM IR) advises Chemcrux on Investor Relations.