Ladies and gentlemen, good day, and welcome to Q4 and FY 2026 earnings conference call of Alkyl Amines Chemicals Limited, hosted by Ambit Capital Private Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kumar Saumya from Ambit Capital. Thank you, and over to you, sir.
Thanks, Danish. Good afternoon, everyone. Welcome to 4Q and FY 2026 post-result conference call of Alkyl Amines Chemicals Limited. From the management, we have with us today Mr. Kirat Patel, Executive Director; Mr. Chintamani Thatte, General Manager (Legal) & Company Secretary; Mrs. Kanchan Shinde, Chief Financial Officer. I'll now request Kirat, sir, for an opening remark, post which we'll open the floor for Q&A. Over to you, sir.
Thank you, Kumar, and welcome everybody to the annual investor call. Thank you for the interest you've shown in the company. I shall just give a few opening remarks, and then we will open the line for questions. The year has been a little challenging. We did begin the year with a little bit of optimism, thinking that there will be some growth. However, as you can see from the results, both the top line and the bottom line have more or less remained flat, plus minus 1% of what it was last year. Within that, the concern has been that the markets have not grown as fast as we would have liked.
However, the good part is we have managed to retain and perhaps even slightly increase our market share in various markets that we operate in. Of course, the year could be split up into 11 months and another one month in March after the war has begun. As you would be aware, we had informed the stock exchange both about the issues we had with sourcing ammonia in March and subsequently how we have been able to manage to keep the plants running. We have had a few challenges in March in operations, but we have by and large overcome it. Of course, the future remains a little uncertain as soon as long as the war continues, which we hope will get resolved soon.
With these opening remarks, I will open the floor for questions on specific issues or specific questions you may have about our products, markets, investments, on the numbers which have been released yesterday. Please, Kumar, you can start the questions going. Thank you.
Thank you so much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Rohit Nagraj from 360 ONE Capital. Please go ahead.
Thanks for the opportunity. Just one question in terms of the demand dynamics that we have seen over the last couple of months, given that the raw material prices have increased and that must have been partially at least reflected in the higher product prices. How has been the user demand given the current context, and what do you expect in the near future? Will it have any kind of demand challenges, which will remain because if the higher pricing continues to stay for some time? Thank you.
Yes, it's You're right that the immediate impact of the war has been that the prices have risen, both of our raw materials and subsequently we have raised our finished good prices to protect our margins. It is a bit difficult to predict whether this will have an impact on the demand. At the moment, of course, we haven't seen it because it's too early. We have one thought process that in most of our customers' products, we are actually a very minor cost in their cost of material. It's what you might call a C item. They have bigger problems to worry about in their major items. The pressure on pricing may not be from the customers as much as from competition.
Competition is already facing the same constraints as we have. I suspect though the prices have risen, they will not go back to the pre-February prices very soon, you know. It'll take some time for them to readjust, and we think that it will continue for a little longer, this price hike, until everything, the supply chain is sorts itself out.
Sure. That's it from my side. Thank you so much, and all the very best.
Okay. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Thank you. Our next question comes from the line of Dhruv Muchhal from HDFC AMC. Please go ahead.
Yeah, sir. Thank you so much. Sir, if you can help us, what would be your volume growth for FY 2026 be?
It's been basically flat. Volume and value, ±1% either way in prices have dropped 1% and volume has probably dropped 1%.
Got it.
The combination is about 2% drop, you know.
Got it.
Within that, of course, between products there has been.
Little change. Yeah. Yeah.
You know.
On the RM availability, ammonia is a key element for you.
Yeah.
I'm just trying to understand the disruption that we see, and Middle East being a large producer. Curious to understand, I understand the prices are increased and at price probably some material is available. At a broader industry level, is ammonia easily available? I mean, for if the hypothesis is if it is available across the board for across the players, although at a higher price, the oversupply concern that to some degree which was there in the industry would remain and how do these spreads improve then? I'm just trying to do On the prices have improved, do the improvement in spreads happen or because the point is if it's available only to you or for probably a few players like you, then I can understand the spread improvement.
If it is available across, how does the spread improvement happen?
One is about the availability of ammonia. Yes, there was in March a week or two when we had grave concerns about availability, but the sourcing improved some. Most of our suppliers managed to source the ammonia for us fairly soon, and the disruption was very short, and our inventories took care of the gap, you know.
Going forward, yes. Like ammonia, as you said, we were in the region of about INR 50 a kg, and now we are over INR 100 a kg. Obviously the cost of production has risen and we have had to pass it on to customers. As I said earlier, the customers have been able to absorb the cost at the moment. Whether this will lead to some demand destruction is a question for the future. Currently, yes, we have been able to source it, and I suspect that most of our competitors have also been able to find their sources of ammonia. The marketplace has remained balanced, and the rise in margins may be just purely inventories.
You know, if you had inventories of the cheaper ammonia or the cheaper raw material and you produced it for a month or two, you will get an advantage. After that it will settle down to the regular competitive margins.
Okay. Yeah. Got it. Sure. When you say the availability is, I mean, ammonia availability is reasonable, does it mean you're able to operate the plant at the level you desire or I mean, is it at lower level also sufficient enough? I mean, just trying to understand the degree of availability.
Yeah. Our plants are running. We have a little bit of headroom. On an average, we must be having between 60% and 85% our capacity utilizations, and that we continue to get enough raw material to keep there. Yes, if the market grows suddenly to more, we will have to source more ammonia. You know the amount of ammonia the aliphatic industry requires is between 10,000-15,000 t a year, I mean, per month. It's a fraction of what the country needs.
It's fairly easy for the government to allocate 0.05%. It's a critical raw material going into agricultural inputs to drugs. They have taken into consideration that and they will definitely support what is required.
All right. Sure.
The alternative for them would be that, okay, if these industries cannot supply, then the worst-case scenario say they will have to import the material, you know, and that is not a great idea, you know.
They are making arrangements to make sure that.
I suspect over a period of time we will get the ammonia as we require.
Right.
Of course, it's not just the ammonia, but other raw materials, methanol and.
Other raw materials also. Yeah. Yeah.
Also raising prices.
It will take some time for the industry to sort the supply chain out, maybe another three months, maybe six months for it to stabilize, you know.
Hopefully by that time all this, Hormuz trade will be opened out and we will be able to manage a reasonable amount of material coming through, you know.
Sure, sir. Perfect. Sir, one another question was if any update on the project that you were implementing in, I think Kurkumbh?
Yes. That project was to be commissioned in this quarter, April to June. We are slightly delayed. It will probably be the beginning of the next quarter that the project will get commissioned. Mechanical completion is good.
The mechanical completion is going to be completed somewhere at the end of June, you know.
The economics remains broadly same.
Yes. The economics of the project have not been affected. Even though there has been a slight delay, the economics of the project has not been affected. Even though in that case also, the raw materials and the finished goods, both prices have risen in line with everything else, you know.
Sure. Perfect. Agreed. Thank you so much. I'll join the queue. Thank you.
Thank you.
Thank you. Our next question comes from the line of Pankaj Tibrewal from IKIGAI Asset. Please go ahead.
Yeah, good afternoon, sir.
Good afternoon, Pankaj.
Two questions. One, you know, last three years when I look at our performance, obviously we were impacted by the product pricing correcting significantly led by Chinese import. And Chinese were selling at a price which was at times below the cost of production, especially in aceto and ethylamines and methyl chain. How is the situation now? Can you give us a color? And, you know, the way we saw in the last three years, do you think that finally even if the prices revert, will it settle much above? Can the company now starts to deliver double-digit kind of a growth, which will be a combination of volume plus pricing? Just a color on across the chain and the import side will be quite helpful.
Okay. The first thing is the Chinese were not in the methylamines field where the competition was largely domestic.
Yeah. Yeah.
While acetonitrile, where we got the, in July, where we got the anti-dumping duty, it took a little time for it to materialize, and we only got the benefit of that anti-dumping duty towards the end of the year. Initially, there was a lot of inventory in the pipeline. In anticipation of the anti-dumping duty, people had imported more. After that, the Chinese themselves cut prices. Towards the end of the year, we did see some improvement in our pricing in acetonitrile, and therefore volumes started creeping up, and our market share started moving a little better.
Going forward, whether at these elevated prices, whether we'll be able to deliver growth on volume and obviously in terms of value it'll grow because the prices have got elevated. In terms of volume, one is not sure. We expect that the next year will be like a normal year, which is about 5%-10% growth rate. There is too many, too much uncertainty in the future.
On the aceto side, what will be the pricing now?
Today, I think we are at about what?
2, 200.
A bit over INR 200 now, per kg. Acetic acid has also risen considerably, you know.
Last year's average would be what?
INR 200 a kg, INR 200 odd a kg, I think.
No, last year's average for us.
Last year's average was, it came down to something like INR 140, INR 150.
Okay. It's gone up by almost 30%, 40% from there, that side.
Yeah. Has the raw materials, you know.
Yeah, yeah. Sure. Sure. Sure. On the ethyl and methyl chain also, the margins had come down to two decade low.
Yes.
How is it looking now from a spread perspective? Are you seeing improvement and plus the volume of it? Because we have a lot of capacity also.
Yes.
Can you give us some color on that side of the business, please?
In ethyl the market adjusted and the margins have improved. In methyl we find still that, though temporarily there will be some disruption because of ammonia. Now that we have four players in methylamine in the country, we expect there will be competition in methyl. Now Aarti has also commissioned their plant, and therefore, they expect to be some competition.
Ethyl, can you give us some color on the spread and, how is it behaving now?
ethyl's as, well, you know, ethyl has been only two of us, Balaji and us in the market.
Yeah.
There has been a somewhat stable market share, kind of, rationing or whatever. Prices have stabilized. In fact, they have also increased because alcohol has increased and margins have been protected, you know, there.
Okay, that's great. Just last question on aceto, can you give us color on the imports by Chinese? How is it behaving now?
In the last quarter, I think, there has been some improvement from us. I mean, in the sense that they have reduced their imports because they've raised their prices. More and more our market share has been increasing. That's only the last quarter. It took almost six months from July all the way till January, December, January for the pipeline and the aggressive behavior of the Chinese to change, you know.
That's great. That's great to hear that. From a demand perspective, last con call you all mentioned because of the tariff issues, the pharma and few of your clients had suffered, and that's why the volume had become a little lower. How is it the feedback from the clients right now? Because the tariff issue is now behind. What are the pharma guys, the API and the peptide guys are saying, how should we look at the pharma demand perspective?
I think the pharma has always been a little optimistic. They were exempt from most of these tariffs, you know. There was a danger in the oil and gas field where we were supplying, which had an impact. That was on one of the products which we used to sell. I think, and where the peptides is concerned, there is still a lot of optimism, I would say, a lot of talk about growth, most of it has to still materialize, you know. It's still early days. In just March they got their, I think, waiver of this thing. They've all launched somewhere in the last month only. Yes, we have supplied materials to all the players, we are waiting to see how that growth takes place.
Okay. Okay.
We are optimistic that in acetonitrile to peptides there will be some volume growth.
Have you been able to now assess the market for us for peptide on aceto?
Difficult because everybody is giving different optimistic figures, but I don't think that will all hold, you know. They're all very gung-ho about it, but it's not going to be that fantastic. As, you know, the acetonitrile market is about 30,000 t or so, and this will be maybe 10% of the whole, you know. There something will go up, something will go down. The total market is not disrupted by it, you know. It's not a disruption, but it's a great addition, you know.
I know the company is quite conservative in overall, you know, outlook always. When I look at the last three years, it's not been a very inspiring time for the company because of various reasons, from an outside perspective. The way we are standing now, and obviously things will change because it's an uncertain world, do you think that now probably we are on a growth path back again, and things should be materially better than what it has been in the last three years, where we suffered from all the fronts?
Short answer, yes. It's, I think, we look forward to what I would say cautious optimism. I think we will do better than what we have. We have seen the worst of times, I think. Of course, in life you never say that because something always comes along. Yes, I'm optimistic that we have, we are likely to see better times in the future.
Thank you, and wish you all the best and the team also. Thank you.
Thank you very much.
Thank you. Our next question comes from the line of Parikshit Gujarati from Niveshaay Please go ahead.
Hello.
Hello. Yeah. Hello, Parikshit. How are you?
Yeah, thank you for this opportunity, sir. First of all, I would like to ask a similar question what Pankaj sir asked. All this China anti-involution policy, how big is the catalyst for us? They are cutting from the capacities on the chemical sector overall. How big is the benefit for us? I wanted to ask that.
Sorry, Parikshit, can you just repeat the question?
Parikshit, I'm sorry to interrupt you. Your voice is breaking. Make sure that you have a stable network. Thank you.
Hello. Hello. Am I audible now?
Yes, you are audible.
Yes.
Yes, sir. What happened from the past, three, four years that Chinese were dumping the chemicals into India and now in the anti-involution policy, they are trying to cut the capacities in their country. How will we benefit from this?
Yes. We have seen over the last quarter, reduction in the aggressiveness of the Chinese, this thing, and we hope it will continue. If that happens, then of course, not just us, all the Indian manufacturers will benefit in terms of reduced competition from the Chinese, some of it which was quite unfair, you know. We hope that will help us restore our margins to the levels which we were hoping, you know. Of course, this path that they have taken should be consistent, you know. It's not necessary that they are going to continue to cut capacities as they have promised, and in all sectors, you know.
Sir, on the margin side, what margins can we expect from now? Can we say that this is the bottom of margins and from now year on, what improvement can we expect?
As I said earlier, that yes, we are optimistic that we have seen probably the worst, and we hope to see better times in the future. With the proviso that there's always something which can happen. You know, nobody predicted the war and what can happen. At the moment, of course, the benefit of lower raw material and higher finished good prices temporarily has helped. How long it will continue, one doesn't know. We are optimistic that we will have better margins in the future. Though all the prices will, I don't think, come down to the old levels soon. You know, pre-February levels, I don't think we'll see very quickly because this is going to take some time for these prices to come down.
Okay. In the volume terms, you are guiding 5%-10% volume growth.
That is what we expect, that, the country will be growing anyway at 5%-7%, and we grow along with it, you know.
Okay. What I wanted to understand that, is this a very big catalyst or a medium-term, short-term catalyst? Is it China anti-pollution thing? Is it a very big catalyst for us or not?
A very big?
Catalyst.
Catalyst.
Catalyst for,
This China's policy.
No, no. It's not that significant. Yes, it does help because you can get maybe a 5% more selling price if the Chinese become less aggressive. They are still present, you know. It's not as if they have completely gone off the market. There will be some advantage if they will stop acting so aggressively because they themselves have to meet their own return on investments and all that, you know. But it will be a benefit, you know. Not a dramatic benefit, but some benefit, you know.
Okay. Got it. Got it.
Thank you. Our next question comes from the line of Gagan Dixit from Elara Securities. Please go ahead. Gagan Dixit has left the queue. We'll move forward to the next participant. Our next question comes from the line of Jai Rupani, an individual investor. Please go ahead.
Yes, sir. Thank you for the opportunity. Sir, in last con call, you had talked about there are some products in the R&D pipeline which you may think about in the next by Feb, March. Could you please update us when do you plan to launch new products from the R&D pipeline? On which side will it be?
Yeah. There are two things. One is, of course, the product which we are already launching, which will, as I said earlier, will probably come into the market in July, which is also from our R&D pipeline. There were a few other products which we are looking at. We have got them onto engineering stage, but we will take a final decision on whether to invest or not into this after this, you know, volatility in the market settles. Because some of them, the profitability, we need to have a slightly longer term vision on these products. When, you know, we start, it takes almost 4-5 years from conceptualization to come to the bench scale to engineering. In that time, a lot of commercials change.
Depending on how it goes, we have to take a slightly longer term view. Given the volatility just now, we are being a little cautious before going forward with anything major, whether it is INR 50, INR 20 crore or INR 50 crore investment or even INR 200 crore investment. We are being a little careful just now.
By next con call, we will have a better view?
I'm not sure. I hope so, because this volatility, I think this war will end. I'm sure we will be able to be a little more optimistic about the future, yeah, and be a little more understanding of where the prices are settling, you know, and who's still left standing in the field, you know.
Okay. My next question was on ACN. What do you think will be the capacity utilization in the coming year, and what was it this last year?
We've, you know, as you know, we have about 30,000 tons capacity between two plants, and we have enough capacity to last us for two years. We are not worried too much about the capacity utilization at the moment.
Okay. going forward, the capacity utilization of methylamines and ethylamines, could you guide us?
Methyl to be invested, I think, about three, four years ago in a very large plant, which could last us for maybe five or 10 years at that time. There is no question of methylamines. I mean, ethylamines, we have enough capacity for the next four to five years, assuming that the growth is natural in this 5% and 10% which we see. Though last year it was a little dull for growth, we think that we have enough ethylamines capacity, and between us and Balaji, the country has enough capacity for ethylamines. Methylamines, there is an overhang of capacity because a new player has come in. There's RCF, Balaji, Aarti, and us now.
There is a bit of overcapacity of methylamines, and that will take some time to fill up until the market to a level where all of us have underutilization of capacity there.
Yeah. My last question was on the raw material side. If there is any improvement in the availability of raw materials, do you think, and the prices go down, our finished product prices also go down by that percentage, or we can maintain the prices, current prices?
Yeah. What happens normally is that the prices come down. There is a phase lag, of course. When supply improves and prices come down, the finished good prices come down with a lag because that comes with competition, you know. There is a portion of time where your margins improve, but that is only temporary. I'm, my view is that I don't think the prices will come down to the old levels very soon, because the damage that has been done to the petrochemical industry is going to be difficult to repair in the short term. It is going to be repaired, of course, but it'll take a little time for it to come back on stream fully.
Thank you.
Thank you. Our next question comes from the line of Abhinav Mandowara from Aequitas Investments. Please go ahead.
Thank you so much for giving the opportunity. The first question is with the incremental ammonia price. I understand that in the March month, we could get the availability of the ammonia. Going forward with higher prices of ammonia, do we pass on the entire incremental price, A? B, how are our contracts placed? Like, is it long-term, short-term? What is the month and what is the quarter?
Well, at the moment, if you look at the We have been able to get ammonia even beyond March. At the elevated prices, the prices have not dropped. We have been able to pass on the increase. I mean, our customers are understanding, very understanding about the fact that, you know, with ammonia doubling, we are not able to supply them the material at the old prices.
They have absorbed it as I said because a lot of our chemicals are a C item in the whole this thing.
Going forward, I think, yes, if the prices come, supply improves and prices come down, the finished good prices will also adjust, maybe with a phase lag. Ultimately it's the competition, you know. We have any of our products, most of our products have either the Chinese or internal competition, which ultimately grabs, tries to grab market share, you know. It does, competition finally sets the price.
Right.
You do probably enjoy a temporary margin widening, but it's only temporary.
Got it. Secondly, wanted to understand the nature of our contracts.
Yes. The at the moment, the ammonia contracts are all short-term because prices are high and nobody is willing to commit, you know. They're all contracts are sort of, it's almost, well, it's not day to day, but it's fairly short compared to what we used to do earlier. Because nobody is willing to commit longer term.
Got it. Also, I just wanted a broad view on how are you seeing the user industry sectoral trend. Are you seeing a demand slowdown, particularly in agro, pharma? I think these two are your biggest segments.
Well, at the moment, we haven't seen anything. There is a little bit of concern that they could be affected. Not pharma as much as agro.
Got it.
They expect this monsoon also with the El Niño and all, there is some concern. I don't see the pharma industry being affected by that.
Got it. How much, perhaps, pharma would be as a user industry? Around 50%?
Maybe between 50% and 60% of our sales are to pharma, and another maybe 15%, 20% to agro.
Got it.
Total life sciences is about 70%-75%.
Got it. While you say that methylamines have got competition, et cetera, et cetera, when do you see the entire absorption of this incremental capacity which Aarti is also getting, and how do you see this panning out? Like, how has the cycle been earlier when a new competitor has arrived and the supply has increased? Like in this scenario, how difficult it would be to pass on the raw material price?
This new competitor in methylamines has not happened for 30 years, 35 years, if I'm not right. There is no comparative kind of scenario, and this is the first time we are seeing such a thing. Yes, earlier, the three of us, Balaji, RCF, and us, have had capacity expansions regularly every few years. All of us have spare capacity now. For all of it to be absorbed, it'll take a lot of time. Because it's a bit of a mystery why Aarti went into this industry.
Sure
overcapacity. There was enough capacity, and then they put another new plant, so we have had even more overcapacity.
Got it. For ethylamines, what is your view on that?
Ethylamines, I think there is no issue. It'll continue to grow, and we have actually a plant which is fairly large size, and we can even debottleneck it. We don't see any problem in capacity for ethylamines. We are probably either the largest or the second-largest producer of ethylamines in the world already.
Got it. What will be your capacity utilization for both the products, like, and what are the products?
We don't talk about individual products, but as I said earlier, that, most of our plants are between 60% to 85% capacity utilizations.
Okay.
We have enough for the next few years without having to invest anything more in the existing product capacities.
Got it. Thank you so much. That's it from my end.
Thank you. Our next question comes from the line of Gagan Dixit from Elara Securities. Please go ahead.
Yeah, thanks for taking my question, sir. Sir, what is the plant CapEx for FY 2027 and FY 2028, sir?
Plant, sorry, what CapEx?
Yeah, what is the CapEx plan?
Yeah.
Yeah. There is no major business project. The current new product plant which is going at Dahej is so bit of what is left over that we will incur in next year, few of the engineering projects. Around it will be around INR 80 crores- INR 90 crores.
Okay. There are no any new product.
Right now, no.
project which is-
It can come up in between. Right now, nothing.
Okay. Okay, okay. About the raw material side, sir, given this situation of the raw material availability, are you evaluating any alternate ammonia or methanol sourcing or any long-term contract for alternate routes, just for the long-term purpose to avoid the similar shutdown risk in future, sir?
Yeah, interesting question. You know, there's a lot of talk about green ammonia going around, and we are waiting to see if the prices of green ammonia offered can even come close to what the petrochem ammonia is. If that happens, that's a great thing for not just the country, for the world, because that would make a big difference. I think it'll happen. It'll take a little time. It'll be three to five years before anything breakthroughs happen. Anyway, I think that's a alternative which will come up in the future.
Yeah. I think the coal gasification also government is focusing where methanol is the, I think, by-product for it.
Yeah. Methanol is a by-product in coal gas. They are pushing. They should have. In fact, China did it 15 years ago. We should have also stepped in. We ignored it, you know. We have only, I think, two or three coal gasification plant, and both of them are, I think, in the steel industry.
Yeah, yeah. Yeah, that's from my side, sir. Thanks. Thanks for this.
Thank you.
Thank you. Our next question comes from the line of Mitul Mehta from Lucky Investment. Please go ahead.
Yeah. Hi, sir. good evening to the entire team. Sir, I just wanted to understand your current spreads, you know, with raw material prices going up, going down. How are the current spreads behaving for each of your products? I mean, you know, you could just tell me about methyl ethyl acetonitrile and few other, the larger ones.
Yeah. You know, in March, as I had mentioned earlier, we did get a little advantage because we had raw material stocks which were of the old prices, while the finished good prices moved up. This kind of thing we will not be able to sustain. Yes, the margins initially improve, and then they settle down because of competition. Whether they will settle down to the old pre-February or a little higher, we'll have to see. We are optimistic that I think we have seen the bottom. Probably the margins going forward will be a little better than what we have experienced in the first 11 months of this year. Of last year, sorry.
Fair to assume that every year we can anticipate a margin increase from now on in terms of EBITDA margins, about 100 to 100-
Every year, it's difficult to say, but definitely I think we do foresee some improvement in our margins in the next year. Will it continue growing? That's a separate question altogether. It's difficult to say.
Also from the sales standpoint of view, is it also fair to assume that our growth will be between, you know, between 10% and 15% going ahead?
5% to 10%.
Well, between 5% and 10% volume growth. As I said, the prices just now have gone 30%, 40% higher than what they were in February. The, in terms of top line, obviously there will be a lot of increase, but in volume growth, it will be between 5% and 10%.
Okay. Typically, you know, the higher inflationary sort of selling price has always been helpful to us even in the past, or generally the raw material prices also sort of move up in the similar fashion, but, and our conversion sort of, you know, remains flat?
You're right. At the beginning at every cycle we gain because there is always that we quickly react to current raw material prices and change our finished good prices while we do have contracts of the old or inventory of raw material with us. There is a widening of margins in the initial stage. It settles down. Hopefully it will settle down to a better level than what it was before February. If the prices start going down again, which may happen after six months, one year, whatever, you know, the time it takes for the supply chain to sort itself out, then we do have some view that raw materials come down faster than our finished goods. Again, we do get a little benefit sometimes.
There are two opportunities, and in between there is a kind of a flattening of margins. Given that there has been a boost in the prices, I do not think the prices will come down dramatically back to the February levels very soon. There will be a margin increase going forward.
Right. On your current selling prices across products, I mean, methyl, ethyl, acetyl.
Sorry?
Current selling prices across your product basket, you know, methyl, ethyl, acetonitrile.
They are very, very different because in each of these, ethyl has three products, methyl has three products. Some are long, some are short. Acetonitrile itself is having a volatility. They are very different trends, you know. Methyl is almost half the price of ethylamines, you know. They do go from, methyl would be, say, INR 100-INR 110 and ethyl would be INR 200, you know, plus. Acetonitrile would be INR 200+ . Today, you know.
Overall tonnage, how much we produced this year? Is it, I mean, is it possible for you to give that information?
Yeah, I think we have produced overall, I think about 2% more, 1%?
1%.
1% more than last year, about.
Tonnage-wise, can you sort of?
No, we don't actually reveal tonnages of various products or even the global.
Basically, from 2 lakh tons, we are currently at about 1 lakh, 10,000 tons. Would that be?
2 lakh ton capacity, yes. Yeah, if you look at our capacity utilization and all, you'll be able to work out it's in that range. Because one-third of that is, as you know, we self-consume a lot of our productions, you know. They're derivatives made from our amines. Almost 1/3 of it is used, reused by us.
Over the next 24 months, we don't see any major CapEx also?
No, we don't see it for the existing products. As Kanchan pointed out, that in case some of these R&D products work out, then we may suddenly come up with a requirement for CapEx. Otherwise, the CapEx we're looking at is just completing this project and maintenance CapEx. There's always some maintenance CapEx, you know, INR 20 crores, INR 30 crores, something like that.
Just to, you know, get some more understanding about these new products. I mean, which are these products actually? Are they, is there a completely new set of products and catering to new industries or?
Look, I think, we have a policy and which we have mentioned earlier, that we do not talk about our R&D products till the product is in the market. That means after the plant is commissioned and we announce it to the market. I don't want to discuss any R&D product. Globally, yes, we are in the specialty chemical market. By and large, we look at products which have at least two customers for the product.
Yeah.
In the areas which, we know, you know, the life sciences. We have a wide range of customers, from rubber chemicals to water treatment to electronic chemicals, drugs and agro. It's normally in this area.
How many, I mean, in terms of number of projects that you would be currently working in your R&D, would it be possible for you to share that number?
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Hello, team. Hello?
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Ladies and gentlemen, the management line has been disconnected. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, the management line has been connected again. Over to you, sir.
Connect. Connect. Thank you.
Hello. Hello. Sorry, we got.
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Yes.
Okay. My question was actually.
Repeat the question because we got disconnected in between.
My question to you was that how many products or how many projects would you be working at this time in your R&D?
At any point in time, we have probably over a dozen projects working on it, probably more. At various stages, you know. Some are right at the preliminary research stage, I mean, in desk research. Some are at, you know, final, what we call R&D Bible, meaning they're just finishing off all the data which the engineering requires. There are some in the engineering stage, which is not R&D, but the project people, you know, technology transfer people. Maybe a dozen products we'll be looking at at any point in time, you know. As you said, you know, Out of which actual when they come to a stage where financial decision has to be made.
Ladies and gentlemen, the management line has been disconnected. Please stay connected while we reconnect them. Ladies and gentlemen, the management line has been disconnected. Over to you, has been reconnected. Over to you, sir.
Good afternoon. I am sorry. I think we are having a little trouble with the network today. Can you just repeat the question you were asking? Sorry.
Actually discussing about the new product.
Yeah. As I was saying, that they have about 12 products at any point in time at various stages of development, from desk research all the way to engineering, you know. Most of the time, I mean, we have a policy that we will not talk about our products. Of course, our end customers probably know it earlier than anybody else because we do send them samples and discuss with them what they want, because specifications and stuff like that. A lot of these products come from them, you know, because they need this. Their approach of saying that, "Can you make this?
We need it in year two or three or whatever, you know, and we need so much quantity at approximately this price. A lot of this, the customers, are the first people, of course, to know about the products. We to the investors, we announce it when we actually have the product in the market. Out of these dozen, maybe one or two may survive, you know, to commercialization.
Okay, great, sir. Thank you very much for answering all those.
Thank you. Sorry about that interruption.
Thank you, and wish you all the best, sir.
Thank you. I think we have time for one more question.
Sure, sir. Thank you. The next question comes from the line of [Nihar Modi] from Millennium Money Finance. Please go ahead.
Hello. Thank you for the opportunity, sir. Sir, I wanted to ask that you mentioned about green ammonia, but sir, that is a different future perspective that can be planned on. Is the company under any talks as of now to diversify its ammonia suppliers or, you know, maybe build a more aggressive inventory so something like this situation does not occur again?
Two questions, whether we can diversify our sources of ammonia. We are already dealing You see, ammonia is a very large commodity, and we are only a very minor user of the total quantity. We depend on distributors and suppliers of this who are mainly connected to the fertilizer plants and import this thing, importers. We don't have a direct connection with, say, the manufacturer, except for one or two cases. But we have a diversified because there are so many fertilizer plants in this country, you know, most of them in the western region. That is well supplied. This shortage of gas is something which is unique, never happened before. That kind of situation can happen. As far as the green ammonia is concerned, we've been watching the development, but nobody is yet offering the ammonia in future yet.
I suspect that they'll come to a stage very soon where they will be able to offer this material to us. Of course, we are not the major users. They're probably planning to offer it to other end users. It could benefit us.
Okay, sir. That's it. Thank you very much.
Thank you. Do we have time for any one more question?
Sure. Give me one minute. Let me check, sir. Thank you.
Is there anybody else?
Sure. We'll take Jai Rupani as the last question. The next question from Jai Rupani, an individual investor. Please go ahead.
Yes, sir. Thank you for the opportunity once again. My question is, sir, our competitor, Balaji, is executing a large plant for ACN, which is coming up in the current year. 18,000 tons. What do you think will be impact on the prices and our capacity utilization? My next question is the methylamine. We are facing a lot of competition. Any new derivative products planned for methylamine so that our margins increase? Thank you.
Two questions. One is, Balaji putting up a new acetonitrile plant. Yes, of course, it can happen, and he will ultimately make the competitive material. That's in the future. When it happens, we will see, because there is already two or three other people who are making acetonitrile, but we seem to have an edge on the costing and the efficiencies. That's where the catch comes. You have to have the ability to manufacturing at a low cost, and we suspect that we will be the lowest cost manufacturer in this product for some time to come. Of course, it will have an impact on the market. It's not just Balaji, it's the Chinese also, you know. As far as methylamines derivatives are concerned, we are always looking out for new products.
I said, we will not talk about our end, new products which we make. Some of these new products are derivatives of our amines. Some methylamine derivatives will be in the R&D pipeline, which we are always looking at. Nothing we can announce just now.
Thank you.
Okay. Thank you very much. Thank you for coming on to this annual call for investors. I wish you all the best for the next year. Thank you.
Thank you.
Thank you so much. Ladies and gentlemen, on behalf of Alkyl Amines Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.