Alkyl Amines Q4 Results Review - Volume Guidance Remains Strong: Motilal Oswal

Motilal Oswal Report

Alkyl Amines Chemicals Ltd.’s Q4 FY24 revenue declined 14% YoY to Rs 3.6 billion, with agrochemicals seeing destocking and pharma witnessing demand stabilisation. Sales volumes increased from the pharma sector.

Gross margin expanded 270 bp YoY to 49.2%, while Ebitdam expanded 50 bp to 19.3% in Q4. Profit after tax declined 21% YoY to Rs 385 million (our estimate Rs 314 million).

The management noted that H2 FY24 was weaker than H1 FY24, with average utilization of 55% across plants in H2. Volumes were subdued mainly due to Acetonitrile and Mono Isopropyl amine. However, product prices were stable in Q4. Raw material prices also declined, with sequential margin gains.

A new Ethylamines plant was commissioned in FY24, which saw utilization of 60% in H2.

Alkyl Amines has a larger market share than competition, and with steady growth in demand (5-7% every year) and improved margin, the management is confident to maintain its market share despite capacity expansion by competition.

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