Balaji Amines In Final Stages of Negotiation With Lithium Battery Manufacturer: Managing Director

Balaji Amines Ltd. is on the verge of closing a supply deal with a lithium battery manufacturer. The company is also undergoing extensive expansion, which will increase revenue and margin in the upcoming quarters, according to Managing Director Dundurapu Ram Reddy.

"We have been waiting for lithium battery manufacturers for the last one or two years and are having constant meetings with them," he told NDTV Profit on Thursday. "We hope that by the end of this FY, at least one company should come on board with lithium battery, where our raw material has been approved."

Reddy highlighted that the supply order deal for dimethyl carbonate, a raw material used in the making, could result in better financial performance for the specialty chemicals manufacturer in the current financial year. "With all these going on, we see an opportunity in NMP (N-methyl pyrrolidone) and other products."

In fiscal 2022, Balaji Amines commissioned a DMC and propylene glycol plant as part of its greenfield project, which makes it the sole manufacturer in India of these products, he said. "We are at the final stages of commission discussions."

Next month or in the first week of October, the methylamine plant will be commissioned. Before the end of this fiscal, the company will commission the dimethyl ether plant, according to the managing director.

Earlier this year, Balaji Speciality Chemicals Ltd., a subsidiary of Balaji Amines, received a mega-project status from the Maharashtra government for its unit in Solapur. The company plans to invest Rs 750 crore in this unit for expansion.

"In the first phase, the investment will be Rs 300 to Rs 400 crore, which we will start spending from this month onwards. Construction has already started and there we have very exciting products like hydrogen cyanide and sodium cyanide, which are all import-substitute value-addition products," Reddy said, adding that it would give a boost to the subsidiaries.

The top executive sees revenue increment and margin improvement coming in from this capital expenditure because whatever expansions that the company was doing, it was not borrowing anything. "Looking into these, there will definitely be good margins."

Balaji Amines reported a muted performance in the June quarter, with net profit slipping 33% to Rs 45.6 crore and missing the Street's expectations. Revenue was down 17% to Rs 385 crore. Operating income, or earnings before interest and tax depreciation and amortisation, dropped 33% to Rs 66 crore.