Announcement under Regulation 30 (LODR)-Investor Presentation

Asahi Songwon Colors Limited has submitted to the Exchange Investor Presentation on the Company's Financial Performance of Q1 FY23, pursuant to Regulation 30(6) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015.

about 1 month ago

INVESTOR PRESENTATION

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Sentiments detected

Positive 32
  • Us 06 – Strengthening Business Model 07

  • 04 Corporate Portrait Asahi Songwon Colors Limited is one of the leading 2 Manufacturing 3 decades of manufacturers of blue (Phthalocyanine) pigments facilities manufacturing expertise for ink, plastics, paint, textile and paper industry Exporting to Team strength of with globally benchmarked 20+ 580+ manufacturing capabilities.

  • Strong technical Manufacturing capacities – 14,400 MTPA Blue pigments pigments.

  • ASPIRATIONS SUBDUED FINANCIAL GROWTH | READY FOR THE NEXT LEG TO BECOME A GLOBAL LEADER IN STRENGTHENING BUSINESS OF GROWTH PIGMENT INDUSTRY MODEL 1993 - - - - - -0 2014 2016 - - - - -0 2018 2019 - - - - ------10

  • - Setup 2,400 TPA Azo pigment capacity equally - 2007 – Entered into a technical collaboration - 2018 – Enhanced Beta Blue capacity to distributed between Red and Yellow Pigment 3,600 TPA and supply agreement with DIC Japan - Necessary infrastructure in place to enhance - 2007 – The company went public and READ MORE –NEXT SLIDE this capacity to 10,000 TPA successfully raised ₹33.50 crores from IPO.

  • Plans to enhance Alpha Blue capacity to 840 TPA - 2008 – Enhanced capacities of CPC blue crude from 3,000 TPA to 7,000 TPA and setup - Working on high value complex pigments in new capacity of 1,200 TPA for Beta blue Azo category as forward integration - Acquisition of Atlas Life Sciences to enter into - 2010 – Enhanced Beta Blue capacity from 1,200 API business and create a new growth lever TPA to 2,040 TPA - 2014 – Demerged the green pigment segment Asahi Songwon Colors Limited

  • Strengthening Business Model 2005 -2015 0 2015 -2020

  • Added 2 new Added 3 new products products and entered new Continuous investments made product category towards making the business of AZO pigments sustainable 2015 0 2021 Served 19 Serving more than Reducing costs customers 40+ customers and Ramping up operations currently

  • We are well on our 16 years way to becoming one of the largest pigment players by enhancing our product

  • Phthalic Anhydrite & market is expected to grow at mid single digits.

  • A STRONG TAILWIND entered into a joint venture

  • A JV WELL POSITIONED TO CAPTURE HUGE MARKET OPPORTUNITY.

  • Company has entered into JV Agreement with Tennants Textile Colors Limited ( TTC ) of UK for putting up a state of the art Red & Yellow Azo pigment Plant with Capacity of 2400 TPA • Cost of project ~₹82 crores • Have required approvals to expand capacities to 10,000 TPA Asahi brings TTC brings - Ramp up of yellow pigment will be faster due to domestic raw material in cost their technology availability competitiveness, knowhow in - TTC to buyback 20% of the quantity manufactured from this JV domestic market red and yellow - JV can achieve ₹140 crores of turnover at optimum utilization levels knowledge and pigments •

  • Margin profile in Azo’s will be higher than that of phthalocyanine strong business pigments relations •

  • plot Phase 2 brownfield capex to begin after reaching 50% capacity utilization levels Capacities expandable

  • two years based on performance existing products and introduce metrics, bringing the company's newer high-value products.

  • The formulators in India account for globally and is rapidly increasing its base for PG is matured with Indian producers a 28% share of consumption (395 T out of 1,430 T) share of overall consumption.

  • However, once the crackdown a few years ago Asahi in the cluster of chemical term sales contract relationship is established, it culminated not only in a rise in companies.

  • on global markets, but also in - Skilled labour availability Due to its long track record and end-users reevaluating their - Strong common infrastructure presence in the markets Asahi reliance on China facilities and enjoys a long-standing - Raw material availability in relationship with majority of its proximity leading to savings in customers logistics cost.

  • STRINGENT QUALITY CONTROL LONG TERM RELATIONS WITH MAKING AN IMPACT BY REDUCING MARQUEE CLIENTS OUR IMPACT - Stringent control over quality has made us the - Over the years, we have built client relationships - Being in the chemical industry we understand preferred partner of choice for our diverse set by delivering on their requirement, constantly the impact our operation have on the of clients.

  • The control over quality also reflects engaging with them, enhancing our share in environment.

  • 22 Investment Merits New capex of AZO to Strong Strong technical put the company back Balance Sheet capabilities backed on growth path by technological tie up with industry leaders

  • Consolidation the Foray into API Greenfield capex at global pigment Chattral to further industry to put the enhance operation company in a sweet efficiencies and increase spot profitability Asahi Songwon Colors Limited

  • While we inventory losses has negatively impacted witnessed robust growth in our topline, our profitability.

  • Barring a few quarters in an uncertain environment, we remain highly Mr. Gokul M Jaykrishna The tide seems to have turned with raw optimistic about a strong bounce back JOINT MANAGING DIRECTOR & CEO material prices starting to come off their in our operating performance.”

  • years indeed to hold the Company in good stead, going forward.

  • On the API front, we have recorded a record top line however the margins While we have taken positive strides in here too were under pressure and the the Azo business, it is yet to be reflected operating performance will significantly in the financial performance.

  • improve going forward.

  • plans to ramp up our Azo operations.

  • However, slowly but surely, we are On a consolidated basis, we expect a witnessing traction in the business and strong bounce back in our operating

  • Mr. Arjun G Jaykrishna remain confident of achieving 50% performance coupled with robust EXECUTIVE DIRECTOR capacity utilisation by the end of the revenue growth as our investments in year.

  • API and Azo's start to pay off.

Negative 7
  • STRATEGIC ADVANTAGES AND INVESTMENT MERITS SLIDE 20-22

  • End use industry diversification - Over the last few years, the revenue Revenue Revenue contributions contributions from the ink industry contributions from from top 5 customers - have come down from more than top 5 customers - <75% 90% to ~ 55% 90% Asahi Songwon Colors Limited

  • Cash Flow from Financing Activities 37.78 (24.20) (38.90) 49.98 28.38 Net increase/ (decrease) in cash and cash equivalents (0.14) 0.00 2.31 (2.03) (0.15)

  • “I am pleased to report to you on our The decline in realisation coupled with performance for Q1FY23.

  • our profitability was under pressure.

  • In the last two years, we witnessed a relentless increase in raw On a standalone basis, our blue business material prices and a resultant increase is operating at decadal low margins.

  • We also remain on track with our CAPEX plans for the Undoubtedly, we have lagged in our API business.

Mentioned Phrases & Organizations

Important keywords detected (20+)

songwon (35)
colors (34)
songwon colors (32)
colors limited (27)
azo (19)
business (17)
blue (17)
pigments (16)
tpa (16)
pigment (13)
new (12)
growth (12)
capacity (12)
director (12)
cost (12)
india (11)
financial (11)
industry (10)
products (10)
asahi (10)

Organizations identified (10+)

Asahi Songwon (6)
Azo (6)
CRORE (6)
Asahi (4)
Phthalocyanine Pigments (4)
ASAHISONG (3)
Atlas Life Sciences (3)
Azo Pigments (3)
PBT excl (3)
MNC (2)

Features are experimental.