Apcotex Industries Limited — Investor Meet, 31-01-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Apcotex Industries reported record operating income of Rs. 355 crore for the quarter, marking a year-on-year increase of 38.2%. EBITDA rose to Rs. 27 crore, reflecting a 6.7% growth, with an EBITDA margin of 7.63%. The profit after tax was Rs. 12 crore, a 4.5% year-on-year growth. Volume and export figures also reached new highs, growing 23% and 30% respectively. Despite achieving record revenues, margins were somewhat constrained by a significant raw material price fall mid-quarter.

**Future Outlook and Growth Drivers:** Management is optimistic about market opportunities, particularly in the nitrile latex segment, driven by increased capacity utilization and positive demand dynamics. The expectation is that margins will recover in the fourth quarter, aided by rebounding raw material prices and a higher focus on specialty products.

**Order Book and Operational Updates:** The company is currently utilizing 75% of its Nitrile Latex plant capacity and 62-65% for new SBR capacity. They anticipate achieving peak revenue guidance of Rs. 1,800 to Rs. 1,900 crore, contingent on sustained demand and effective capacity management.

**Analyst Q&A Insights:** Analysts raised key concerns regarding revenue sustainability and profitability, particularly in the nitrile latex segment, where margins have been challenged. Management highlighted the importance of competitive positioning and improving capacity utilization to regain margin strength. The company is also addressing challenges posed by raw material costs and pricing pressures from competition.

**Market or Regulatory Updates:** The management noted the impact of U.S. tariffs on nitrile gloves, which may indirectly benefit Apcotex's product positioning, though they acknowledged potential risks related to potential dumping from China.

**Strategic Focus Areas:** The company is committed to enhancing product mix and pursuing growth in both domestic and export markets. There is a consistent focus on cost control and operational efficiency to navigate current market pressures.

**Investor Insight:** Given Apcotex's solid revenue growth, improving operational metrics, and potential for margin recovery in the upcoming quarters, the current financial health and strategic direction could be viewed favorably, indicating a 'buy' position for retail investors, alongside awareness of competitive risks and market dynamics.