OVERVIEW
Aksharchem (India) Limited is one of the leading chemicals manufacturing company based
in India with a focus on exports to over 20 countries. The Company has also re-directed
its focus on the domestic market as one of the future growth drivers. Our product
offerings fall into two categories organic chemicals and inorganic chemicals, which
further diversified into Vinyl Sulphone, H Acid, CPC Green in organic chemicals and
Precipitated Silica in inorganic chemicals. Out of which organic chemicals have multiple
applications in textile, inks, plastics and paints industries and inorganic chemicals have
applications in tyre, rubber, agrochemical and animal feed industries. We are one of the
key manufacturers in the chemical markets for these products and have been recognised as
Two Star Export House by the Government of India. We believe that we have built strong
reputation in various markets, over 30 years of experience that has translated to a
customer base.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Our manufacturing facility is located in Gujarat, with installed manufacturing capacity
of 23,400 MTPA, as of March 31, 2023. Our facility is fully integrated and equipped to
manage products from the stage of chemical treatment to dispatch, lending us competitive
advantages such as cost effectiveness and maintenance of quality standards. Our facility
includes automated and cost-efficient systems and quality control and quality assurance
laboratories, among others. The plants of the Company are situated at Chhatral and Dahej
Locations.
As far as concerned with the Industry, multiple basic and specialty chemical
manufacturers are staring at weak prospects in the near term, led by weak global demand
and destocking of inventory. Declining chemical prices and increased competition from
China post opening of the Chinese economy are putting pressure on their margins. The only
solace for now comes from some decline in raw material prices. Nevertheless, there are
multiple factors that led to a cautious near-term outlook for many companies even as
analysts maintain a structurally positive view on the sector looking at long-term
prospects.
OPPORTUNITIES AND THREATS
The Company has successfully penetrated in catering precipitated silica needs of major
tyre and rubber manufacturers of India. Company has committed forexpansions for various
types of precipitated silica. Product mixes available for consideration are conventional
precipitated silica, micro pearl silica and highly dispersible silica. The Company has
identified domestic market as one of the future growth driver. The Company is committed to
increase its market share by increasing domestic sale of all the products.
The Company has witnessed major slowdown in the demand which has forced the partial
stoppage of the plant operations, resulting into minimum operating margin and ultimately
not able to cover all the fixed overheads which is necessary for the positive bottom line.
However, the demand started improving after prolonged sluggishness of the chemical sector.
We believe that there would be some challenges in the next financial year too but we hope
for the positive uptrend also.
OUTLOOK AND STRATEGY
The Company has successfully completed the capex for shifting of CPC Green Production
line to the new building facility. The Company has entered in the new geography namely
Turkey, Vietnam, Srilanka etc. The Company is regularly conducting Sales & Operations
Planning Meeting for identifying the issues and resolving them in an efficient and timely
manner. During the year the Operating Cash flow of the Company has improved by effective
utilization of working capital.
The Company is ensuring sustainable performance even though there remains high
vulnerability in raw material prices. We believe that our performance will be back on
track, once the situation of geopolitical instability and global economy start improving.
Further, with increased capacity utilization, company is reaching out to all markets in
tire and rubber industry with parallel efforts for increased capacity creation during the
year. New products requirements as per various demands of customers are being studied to
expand product portfolio in coming years.
RISKS AND CONCERNS
The major risk for the company is the China price mechanism, which is still worrisome
for the Company. Dumping/selling at lower rate by China in the current scenario makes it
difficult for the Company to improve margins. Company along with other players of the same
industry contemplating on this issue and hopeful for resolution of the matter with
concerned authorities.
Costs control measures, enhanced productivity, improved efficiency and expansion are
key parameters to maintain competitiveness and these are being pursued by the Management
of the company. Customer satisfaction is the key focus area for the
Company. Frequent visits to customers, customer engagements, encouraging customers to
visit our plant, creating local contact network to attend to daily needs of customers,
customers rating of our product and service etc. help us to achieve set targets through
creation of trust in product and service quality.
FINANCIAL AND OPERATIONAL PERFORMANCE
During the year 2022-23, the volume was 14,813 MTPA and our current capacity
utilization blended basis stands at 64%. Net revenue from operations for FY2022-23 is Rs.
33,467.86 Lakhs as compared to Rs. 38,034.44 Lakhs for FY2021-22, de-growth of 12%. And as
far as concerned with the profitability, the financial performance of the year 2022-23 was
quite subdued. This is mainly on account of sluggishness prevailing in the both sectors.
i.e. Dye Intermediates and Pigments throughout the second half of the year.
Below are the Financial Figures for the financial year 2022-23.
| Particulars |
2022-23 |
2021-22 |
| Revenue from operations |
33,467.86 |
38,034.44 |
| Other Income |
15.17 |
65.34 |
| Total Income |
33,483.03 |
38,099.78 |
| Profit for the year before Finance Costs, Depreciation, Exceptional Items and Tax
Expenses |
1,556.44 |
3,237.01 |
| Less: Finance Costs |
321.50 |
220.55 |
| Profit for the year before Depreciation, Exceptional Items and Tax Expenses |
1,234.94 |
3,016.46 |
| Less: Depreciation |
1,284.84 |
1,221.78 |
| Profit for the year before Exceptional Items and Tax Expenses |
(49.90) |
1,794.68 |
| Add/(Less): Exceptional Items |
Nil |
Nil |
| Profit for the year before Tax Expenses |
(49.90) |
1,794.68 |
| Less: Current Tax |
0.00 |
202.00 |
| Less: Deferred Tax |
44.31 |
136.55 |
| Less: Adjustment of tax for earlier years (Net) |
0.00 |
(135.35) |
| Net Profit for the year |
(94.21) |
1,591.48 |
IMPORTANT RATIOS (Changes with respect to the Previous Year)
| Ratio |
2022-23 |
2021-22 |
| Debtors Turnover Ratio (Days) |
49 |
39 |
| Inventory Turnover Ratio (Days) |
72 |
63 |
| Interest Coverage Ratio (Times)* |
0.82 |
12 |
| Current Ratio@ |
2.25 |
1.78 |
| Debt Equity Ratio* |
0.09 |
0.18 |
| Operating Margin Ratio (%) |
14 |
17 |
| Net Profit Margin PBT (%)# |
(0.10) |
5 |
| Return on Net Worth (%)" |
(0.34) |
6 |
Interest Coverage Ratio has reduced due to decrease in EBIT. @Current Ratio improved
due to decrease in current liability.
*Debt Equity Ratio decreased due to lower utilization of borrowings. #Net Profit Margin
reduced due to decrease in operating margin. "Return on Net Worth has decreased due
to net profit after tax.
CERTIFICATIONS
The certification of ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 is a testimony to
the Companys commitment towards quality, sustainable environment friendly approach and
occupation, health & safety.
Further, The Company is having the certificate for registration of trademark from the
Registrar of Trade Marks, Trade Marks Registry, Gujarat for its logo i.e. Aksharchem and
its products Pigment Green 7 and Precipitated Silica i.e. Asaflow and Aksil respectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Board has adopted policies and procedures to ensure the orderly and efficient
conduct of its business, including but not limited to the prevention and detection of
frauds and errors, the safeguarding of its assets, the accuracy and completeness of the
accounting records, adherence to the companys policies, periodical review of financial
performance of Company and review of the accounts every quarter by Statutory Auditors.
HUMAN RESOURCES DEVELOPMENT
Engaged employees are more motivated, productive, and committed to their work, leading
to improved outcomes. Here are some common employee engagement initiatives undertaken by
companies in the HE sector: Companies establish effective communication channels to ensure
transparent and open lines of communication between management and employees, which
includes motivational programs that are arranged on a quarterly basis. We offer
opportunities for career advancement, skill-building and cross-functional experiences. We
value employee feedback and often conduct internal meetups to assess employee
satisfaction, engagement and overall organizational climate. We implement recognition and
reward programs to acknowledge and appreciate the efforts and achievements of the
employees.
The Management of the Company mainly focus on Learning and development by following and
maintaining certain specifications such as encouraging professional development by
involving employees on a daily interaction by team meetings in group as well as one to one
so each employee can express and we as an organization can develop them by the conclusions
we come up with in such interactions, and by maintaining training schedules as per marking
their growth and work quality inputs which we register from the specific department. And
the management strongly believes in maximum knowledge sharing through discussions,
presentations, and weekly tasks.
The attrition rate of the Company is lower as comparted to peers in the industry.
Further, the Company has also started recruiting new employees in the field of operations
and administration in its new plant situated at Dahej. During the year under review Thirty
Three (33) employees were appointed by the Company. The Company has 169 employees as on
March 31, 2023. The Board of Directors had admired the efforts put in by all employees to
achieve good performance and looks forward to its continuation.
+91-9892691696
