Vinati Organics MD expects minimal benefits from anti-dumping duty on butylphenol
Summary
Vinati Saraf Mutreja, MD of Vinati Organics estimates the potential benefit to the company from the anti-dumping duty on imports, at around ₹4 crore.
Vinati Saraf Mutreja, Managing Director of Vinati Organics says the anti-dumping duty imposed by the government on imports of a key chemical compound is not likely to lead to any significant gains for the company.
The Ministry of Finance imposed an anti-dumping duty on imports of para-tertiary butyl-phenol (PTBP) last month.
“The impact of this duty is not very significant because PTBP product as a whole is not a very large product (less than 10% of overall revenue) in our portfolio,” she said.
The potential benefit of the duty would be around ₹4 crore, she said.
Mutreja said that the fourth quarter of the last financial year has been particularly strong.
The new financial year (FY25) is expected to outpace FY24 by 20-25% as the trend of destocking seems to be nearing its conclusion, she stated.
“We are seeing good recovery for most of the products, customers are sitting on very little or zero inventory and hence the reordering has picked up,” she said.
Most of the demand is coming from the export market and in “Domestic as well, we are seeing demand shaping up quite strongly.”
She believes that because of the Red Sea issue and bridge collapse in Baltimore, freight rates to the US and Europe have doubled from all-time lows.
“But we have seen many highs during COVID, so it has still not gone up to those levels, it is still 30% of that. It is being transferred and most customers are obeying that cost,” she said.
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The company is expanding and adding a new line for 2-Acrylamido 2 Methylpropane Sulfonic Acid (ATBS), which is about ₹300 crore investment and is expected to be completed by December 2024.
On March 11 this year, the company subscribed to an additional ₹499 crore fully paid-up equity shares of its wholly-owned subsidiary, Veeral Organics Private Limited (VOPL).
“We have almost commercialised and started trial production in VOPL, which is our subsidiary where we have new niche products like MEHQ, Guaiacol and a few others,” she explained.
The current market capitalisation of the company is ₹15,674.26 crore.
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