India Glycols : Transcript of Results Conference Call for Q2FY22

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					ISO 14001 ; ISO 45001 ,
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No. 2-8 , Sector -126, NOIDA-
	201304, Distt. Gautam Budh		120
Fax: +91	120 3090111,	3090211		Nagar, Uttar Pradesh, Tel. : +91	6860000, 3090100, 3090200
E-mail :
				[e-mail], Website: www.indiaglycols.com

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November,

2021

The Manager	(Listing)
BSE Limited		Ring,
1st	Floor, New Trading
Rotunda
	Building, P.J. Towers,
Dalal Street,
Mumbai - 400	001
Scrip Code: 500201

The Manager (Listing)

National Stock Exchange of India Limited

Exchange Plaza, C-1, Block G,

Bandra Kurla Complex,

Bandra (East)

Mumbai - 400 051

Symbol: INDIAGLYCO

Dear

Sirs,

Sub:

Disclosure under Regulation 30 of Disclosure Requirements) Regulations, Conference Call

the	SEBI	(Listing
2015	- Transcript

Obligations and of Q2FY22 Results

Further to our letters dated l 2 h and l 6 h	November, 2021	and
		1	1
Regu lation 30 of the Securities	and	Exchange Board of India (Listing
and Disclosure	Requirements )	Regulations,	2015,	the transcript	of
Conference Ca ll for Q2FY22 held on Tuesday, l 6 h	November,	2021	is
				1

pursuant to Obligations the Resu lts attached.

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Corporate Office : 3A, Shakespeare Sarani, Kolkata - 700071 , Phone: [phone] Registered Office : A-1, Industrial Area, Bazpur Road, Kashipur - 244713, Distt. Udham Singh Nagar (Uttarakhand) Phone : [phone] / 269500 Fax : [phone], 269535

CIN : L24111UR1983PLC009097

"India Glycols Limited Q2 FY-22 Earnings Conference

Call"

November 16, 2021

MANAGEMENT: MR. SUDHIR AGARWAL - EXECUTIVE DIRECTOR

MR. RUPARK SARSWAT - CHIEF EXECUTIVE OFFICER

MR. ANAND SINGHAL - CHIEF FINANCIAL OFFICER

MR. SANJEEV GURWARA - PRESIDENT - MARKETING

MR. SK SHUKLA - HEAD -LIQUORBUSINESS

PROF. DR. R.K. KHANDAL - PRESIDENT, R&D AND

BUSINESS DEVELOPMENT

MR. ANKUR JAIN - HEAD (LEGAL) AND COMPANY

SECRETARY

MODERATOR: MR. SANJAY JAIN - ICICI SECURITIES

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	India Glycols Limited
	November 16, 2021
Moderator:	Ladies and gentlemen, good day and welcome to India Glycols Limited Q2FY22 Earnings
	Conference Call hosted by ICICI Securities Limited.
	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 concludes. Should you need assistance
	during the conference calls, please signal the operator by pressing '*' then '0' on your touchtone
	phone. Please note that this conference is being recorded.
	I now hand the conference over to Mr. Sanjay Jain from ICICI Securities. Thank you. And over
	to you sir.
Sanjay Jain:	Good afternoon, everyone. Thank you for joining with us on Indian Glycols Limited Q2H1FY22
	results conference call. We have India Glycols management:
	Mr. Sudhir Agarwal - Executive Director
	Mr. Rupark Sarswat - Chief Executive Officer
	Mr. Anand Singhal - Chief Financial Officer
	Mr. Sanjeev Gurwara - President - Marketing
	Mr. SK Shukla - Head -Liquor Business
	Prof. Dr. R.K. Khandal - President, R&D and Business Development
	Mr. Ankur Jain - Head (Legal) and Company Secretary at India Glycols Limited
	I would like to invite Mr. Rupark to initiate the proceeding with his opening remarks, post which
	we will have Q&A session. Over to you Rupark Ji.
Rupark Sarswat:	Good afternoon to everybody here who has joined, thank you for joining this call. And I hope
	all of you are doing well. It is much better from a COVID perspective. And we all hope that it
	kind of remains that way.
	What I will do together with my colleagues is give you a brief overview of what we presented.
	Our apologies that you may not have got had enough time to go through the presentation, we
	had a slight technical glitch, and there was some delay in the presentation getting uploaded. I am
	told though it was available about 10 minutes ago on the exchanges as well.
	Coming to the performance of the quarter, it is important to note that in this quarter, we have
	undergone a transition and that is that in this quarter the EOD and the Formulation business is
	no more reported as a part of IGL, but is reported as under the Joint Venture. So to extent the

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India Glycols Limited

November 16, 2021

turnover and the numbers with respect to the EOD business for this quarter are not there and it is important to kind of keep that context.

Overall performance if you see our gross turnover is at Rs. 1695 crores which is up 10% our net turnover at Rs. 780 crores which is up 7%. And as many of you already know, there's a big difference in the gross turnover and the net turnover for IGL it is because there is a very heavy Excise duty for the liquor business that we have which is of the order of 600% to 700%. ROCE is Rs. 75 crores which is up 16%. The EBITDA margin is at 9.55% and the PAT at Rs. 37 crores is up 40% for this quarter as reported.

As I mentioned in these numbers, it is without the EOD business being part of IGL and considering that you would see that this has been a very good comeback and a strong performance for the business in the 2nd Quarter. You would see that the margins are at 9.55%.

Another point I would like to make for is that whilst the EOD sales are no more part of IGL's reporting, one of the key raw materials or the key raw materials for the EOD business which is ethylene oxide is still supplied by IGL and therefore, that sales has come as a part of IGL sales. However, it is also important to note that we make relatively nominal margins on the transferred ethylene oxide that is how the agreement is structured. So, in order to see the real value of the chemicals business to us, you need to kind of in your mind, add back the ethylene oxide EBITDA profit to the business, which I have not done here. To that extent the reported margins are somewhat suppressed, and you will see the benefit coming more in terms of the PAT.

And now looking at the performance for continued businesses, you will see that the gross turnover is up 24%. And the net turnover is up 39% at Rs. 780 crores. As I said it is up 39%, because now, for the purpose of looking at continued businesses we have removed EOD business from both the quarters, that is quarter for the last year as well as quarter for this year. And the PAT of course is at Rs. 37 crores up 87%.

Looking at the half yearly performance as you would have the slide the gross turnover at Rs. 3561 crores is up 46%. The net turnover at Rs. 1644 crores is up 48%. EBITDA at Rs. 152 crores is up 5% and the EBITDA margin at 9.87%. The PAT reported is Rs. 249 crores up 707%. But such a huge jump in PAT is mainly because it also includes the slump sale profit that arose because of the JV formation.

So all in all, good two quarters and a good first half for our businesses and I will talk a little bit about what has driven the performance. In terms of key highlights for the quarter the Joint Venture with Clariant has been established successfully and very smoothly without any disruption to the business. Of course, there was a couple of weeks of postponement for some orders, but really no loss of business or any major disruption, which is a very good thing.

As we had updated you, we had sanction projects for putting up grain-based distillery projects in our Kashipur and Gorakhpur plant. Those projects are ongoing, and we expect the plants to

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India Glycols Limited

November 16, 2021

be commissioned by March and April 2022 respectively. We are also happy to share as you may know that the company's long-term rating has been upgraded to 'A' with a stable outlook.

The performance for this quarter actually, to a large extent in the first half has been led by an excellent performance by bio-based specialties and performance chemicals, both in terms of sales as well as EBITDA as you would see. As has not been a surprise, sharp escalation in feedstocks, freight prices, packaging and energy has been a bit of a dampener and they have posed some headwinds, which have to some extent compressed our margins. But given all of that, it's a reasonably good performance that we have to report in this quarter.

Let me spend a little bit of time explaining to you certain macro factors that have been impacting our industry. Now, these macro factors are not only important from the point of view of tactical planning and strategy, but even longer-term strategic actions that companies like us will take.

So, there are six factors which are important, which I will very quickly cover. The first three are more fundamental and the next three are to some extent related or are also an outcome.

One is the significant demand surge that the world saw in various parts, including India, post- pandemic and the world was therefore not prepared in many ways whilst it presented an opportunity, but you saw that there were issues with respect to supply chains getting disrupted, as well as supplies of coal, etc. which impacted us. There has also been visibly, a number of areas where climatic changes are visible, which has impacted and will continue to impact several things. Now, for example, in India, in the Central and Eastern part of India, you saw probably the worst rains in the last 127 years, which impacted our coal situation and therefore the coal crisis in India.

You may know that Europe actually has a significant renewable energy consumption. And a lot of that energy comes from wind and hydro energy. And both of these were pretty much low in their generation. So that also added up to the global energy crisis. You may also know that the same thing was happening in Latin America where there's a lot of hydro energy and there was a drought and therefore that energy came down which all is not only impacting our energy prices, but I am also talking about a driving factor for businesses, particularly the ones which have positioned themselves based on sustainable ingredients.

And the other of course, is the big push for sustainability and green transition. This has provided opportunities, but it has also created hiccups. So, as you know in India, there is a push for increased blending of ethanol in petrol. Similarly, other countries in the world are going through this transition and sometimes it has been a choppy ride where you people have pushed in renewable resources and Germany, for example, has said that they would not go to nuclear energy, but we are probably not as ready to completely depend on renewable or sustainable energy. So that sustainable transition also created some hiccups.

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