#COMPANY #POTENTIAL

• The market size of India’s real estate sector is expected to reach USD 1 trillion by FY 2030 and the market is projected to increase at a CAGR of 19.5%. The market is anticipated to reach USD 650 Billion by FY 2025 and contribute 11-13% of the country’s GDP. • Housing sales in CY24 stood at ~4.60 lakh units, a 2% decline from CY23's figure of 4.77 lakh units. However, the total value of housing sales rose by 16%, from ₹4.88 lakh cr in 2023 to ₹5.68 lakh crore in 2024. This reflects increased prices despite a minor sales volume drop​​. Top cities contributing to these sales were MMR, Pune, Bengaluru, Hyderabad, and NCR, accounting for 92% of total sales​. • New launches in CY24 saw a decline of 7%, with 4.13 lakh units compared to 4.46 lakh units in CY23. This reduction is attributed to slower approval processes during election periods​. There was a strong focus on premium and luxury housing, with a significant rise in homes priced above ₹2.5 cr, which saw a 66% increase in new launches in 2024. limited new supply, improving market efficiency. • Inventory across the top 7 cities decreased by 8% in 2024, with 5.53 lakh units available in the primary sales market. Pune recorded the highest decline, with a 20% reduction in unsold stock​. This reduction in inventory was driven by high demand and • Mumbai, being the largest real estate market in the country is set for a major boom, which will further add to the overall surge. For close to 5 years, Mumbai has resembled a gigantic construction site. A new coastal road, a metro rail and a trans harbor link are among the many ongoing infrastructure projects that are meant to transform India’s commercial capital into a modern and efficient city. As these projects complete over the next few years, new micro markets will open in and around Mumbai, as commuting would become easier. That will boost real estate development further.

#COMPANY #OUTLOOK

• In FY25, the company had envisaged to grow residential bookings to over ₹27,000 cr through the launch of many new projects combined with strong sustenance sales and it achieved ₹29,444 cr of bookings for the year wth 25.7 million sq ft of sales. • The Ashok Vihar project Phase 1, Worli, Carmichael, Vikhroli project are expected to be launched in FY26. • The company targets ROE of 20% going forward. • They focus to deliver atleast 15% net profit margin, going forward. • It is comfortable with net gearing ratio between ~0.5:1 to 1:1 which gives them the room for further addition of debt. The company will have a cap on net debt of ₹10,000 crore. • The EBITDA margin is expected to be in the range of 25%-30% for residential projects but for plotted developments it would be higher. This can also be higher with change in mix of projects in different cities. • The company acquired ~53 acres of land in Joka, Kolkata. It offers ~1.3 million sq ft of saleable area comprising primarily residential plotted development with an estimated revenue potential of ~₹500 cr. • In 9M FY25, they have added 12 new projects with a total estimated saleable area of ~16.9 million sq ft and total estimated booking value potential of ~₹23,450 crore and have thereby surpassed the full year guidance of ₹20,000 crore.

Godrej Properties 1800-2100
Expected level 2600
Support 1680

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Laxmi Organic Industries Limited company details report

Laxmi Organic Industries Limited, incorporated in 1989 is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates with almost three decades of experience in large scale manufacturing of chemicals. It started manufacturing glacial acetic acid in 1992, and thereafter moved on to manufacturing of ethyl acetate in 1996. In Fiscal 2010, it commenced manufacturing of Specialty Intermediates by acquiring Clariant’s diketene business. The company’s product portfolio is currently divided into three broad categories, namely the Acetyl Intermediates, Speciality Intermediates and Fluorospeciality Intermediates. a) The Acetyl Intermediates include ethyl acetate, acetaldehyde, fuel-grade ethanol and other proprietary solvents. The company is currently amongst the largest manufacturers of ethyl acetate in India with a market share of ~30% and is the only Indian company with on ground presence in Europe for over ten years now. The acetyl products have applications in diverse industries such as pharmaceutical formulations, agrochemicals, ink & paints, coatings, packaging, adhesives and fragrance & flavour. b) The Specialty Intermediates comprises of ketene & diketene derivatives including esters, acetic anhydride, amides, and arylides. The company is the manufacturer of diketene derivatives in India with a market share of ~50%. The specialty intermediates have applications in pharmaceuticals, agrochemicals, dyes & pigments, flavour & fragrance, paints & coatings, flame redundant, and electronics.

c) The Fluoro speciality Intermediates business vertical of Laxmi Organic Industries is a highly specialized segment with complex chemistry and limited competition. Leveraging the acquisition of Miteni SpA’s Fluoro Specialities and electrochemical fluorination assets, the company has gained access to world-class technology, infrastructure, and a diverse product portfolio with over 100 offerings. With a dedicated facility in Lote-Parshuram, Maharashtra, the company is strategically positioned to establish a strong foothold in the Fluoro speciality Intermediates market. Fluoro speciality intermediates manufactured by the company will find applications in agrochemicals, cosmetics, flavours & fragrances, dyes & pigments, and in the medium to long term in electronics and automotive. The company has 50+ products and 620+ active customers. It has 4 manufacturing facilities (including two upcoming manufacturing facilities at Lote & Dahej). It expanded its scale of operations and global footprint with customers in over 52 countries including China, Netherlands, Russia, Singapore, United Arab Emirates, United Kingdom and United States of America.

Revenue breakup

EBITDA breakup

Revenue breakup

#SALES #GROWTH

In FY24, the consolidated sales grew by 2.6% YoY to ₹2,865 cr. The growth was led by 20% YoY volume growth while price realization remained under pressure. Segment wise, the essentials segment sales grew by ~3% YoY and specialties segment sales grew by ~15% YoY. Industry wise, the agrochemical segment continues to face intense competition, and pricing in the pharma segment remains under pressure. Geography wise, the growth was led by domestic market and North America market while Europe market witnessed weak demand for products. In 9M FY25, the sales grew by 9.6% YoY to ₹2,276 cr led by 15% volume growth across both business segment. Segment wise, the essentials segment sales grew by 5% YoY and specialties segment sales grew by 20% YoY. The company witnessed volume growth mainly in Q2 FY25 of 14% YoY and in Q3 FY25 of 17% YoY. The revenue from domestic stood at 64% and exports at 36% in 9M FY25.

#EBITDA #GROWTH

In FY24, the EBITDA grew by 7% YoY to ₹256 cr because of decline in power & fuel cost and other expenses. The power & fuel cost declined by 9% YoY to ₹229 cr (v/s ₹252 cr in FY23) led by reduced coal prices. Segment wise, the specialties segment contributed 67% (FY23: 69%) to the EBITDA and essentials segment contributes about 33% (FY23: 31%) to the EBITDA. The company’s loss of profit insurance claim for FY22 was settled in Q4 FY24 which added ₹10 cr to the EBITDA. During the year, the company witnessed supply chain challenges due to the ongoing Red Sea crisis. The company’s key raw material are acetic acid and ethyl alcohol. The price of acetic acid is linked to crude oil prices. Similarly, the price of local ethyl alcohol, derived from sugarcane molasses, is cyclical. In 9M FY25, the EBITDA grew by 31% YoY to ₹221 cr led by strong growth in both the essentials and specialties segment.

#PAT #GROWTH

In FY24, the PAT declined by 3.3% YoY to ₹121 cr. The decline in profit was on account of increase in depreciation cost and higher effective tax rate. The depreciation cost increased by 47% YoY to ₹107 cr from ₹72 cr in FY23 mainly due to capitalization of two projects in subsidiary at site-2 in Mahad that came on stream in Q3 FY24 and Q4 FY24. The effective tax rate in FY24 stood at 29.4% in FY24 (v/s 27.9% in FY23). In 9M FY25, the PAT increased by 20% YoY to ₹92 cr. The depreciation cost increased by 11% YoY to ₹85 cr in 9M FY25 due to capitalization of assets in Lote.

#EBITDA #MARGIN

In FY24, the EBITDA margin expanded by 36 bps YoY to 8.9% because of decline in power & fuel cost and other expenses. During the year, the gross margin of the company contracted by 71 bps YoY to 32.8% because of increase in raw material cost. The company’s product ethyl acetate is a commodity product, and thus, vulnerable to volatility in raw material prices, which are governed by global supplydemand dynamics. The company’s focus on high margin specialties products in the di-ketene derivatives and fluorochemicals segment will provide a stability to its earnings and improves its margins. In 9M FY25, the EBITDA margin expanded by 158 bps YoY to 9.7% mainly led by improvement in gross margin on account of operational efficiency. Segment wise, the essentials segment margin expanded by 88 bps YoY to 4.6% and specialties segment margin expanded by 169 bps YoY to 20.8%.

#PAT #MARGIN

In FY24, the PAT margin contracted by 26 bps YoY to 4.2%. Other income during the year increased to ₹28 cr from ₹17.5 cr in FY23. In 9M FY25, the PAT margin expanded by 35 bps YoY to 4%.

#ROCE

In FY24, the return on capital employed stood at 9.6%. The company has entered into fluorochemical specialty products which finds application in the pharmaceutical and agrochemical sectors. The company intend to leverage its existing relationships with customers by offering a diverse set of products while strengthening its position in the specialty chemicals segment simultaneously, it plans to reduce its dependence on commodities such as ethyl acetate.

#CASH #FLOWS

In FY24, the cash from operations increased to ₹562 cr due to improved working capital days and efficient use of current assets. Purchase of property plant and equipment of ₹247.6 cr and movement in other bank balances of ₹156 cr led to cash outflow from investing activities of ₹490 cr. The company reported cash outflow from financing activities of ₹42 cr. This was on account of net proceeds from short term borrowings, interest, lease and dividend payment partly offset by proceeds from issue of share capital.

#SECTOR #POTENTIAL

• The essentials solvents business under the Acetyl Intermediates (AI) category are slated to grow at ~5-6% CAGR from 2022-2028. • Global market for Diketene derivatives segment is around $1.7 billion and is expected to grow at ~5-6% CAGR in the next 5 years. There are multiple tailwinds driving demand for Diketene derivatives with consumer segments showing strong growth globally. Global crop protection chemicals market clocked ~$79 billion in 2022 having grown at a 9.9% over 2021. The market is expected to witness a similar growth in the next 5 years. Whereas the other important Diketene derivatives application in the pharma sector is also expected to witness a high growth of ~ 9% CAGR from $1.5 trillion in 2021 on a year-on-year basis. • Global fluorochemicals market is growing at an attractive CAGR of 5-6% and is expected to touch $30 billion by 2025. Indian market itself for fluorochemicals is growing at a strong pace of 12% CAGR and given the increasing demand from pharmaceuticals, agrochemicals, EV and renewables applications, this growth rate could accelerate to higher levels of 12-14% over next few years. • Indian market size is currently around $450 million and expected to reach $1 billion by FY26. There has been a tremendous surge in demand for fluorine based chemical products in the field of agrochemicals in tandem with the rise of use in pharmaceuticals. Fluorine has a special place in the toolkit of the agrochemical and pharmaceutical chemist. It has a significant impact on the biological activity of agrochemicals like fungicides, insecticides, herbicides, acaricides, and nematicides. Fluorine containing pesticides account for ~67% of the overall pesticides and over 53% of the pesticides introduced in the previous 2 decades. On the other hand, fluorine containing drugs account for ~2% of the drugs approved by FDA in the last 5 years.

#FUTURE #OUTLOOK

• The company maintained its capital expenditure guidance of ~₹1,100 cr during FY24-FY28, both in the essentials and specialties segment. It includes ₹800 cr at Dahej site & n-Butyl Acetate plant, ₹50 cr in fluoro intermediates business, ₹90 cr in Ethyl Acetate capacity addition at Lote and the rest capital expenditure at existing sites. With this capital expenditure plan, it expects to double its revenue and triple its EBITDA by FY28. • In the essentials segments, the company would incur capital expenditure of ~₹550 cr at Dahej. It received relevant approvals for the same and construction has started. It expects revenue from Dahej to start flowing from FY26 and the peak revenue is expected by FY28. The company expects the asset turnover of ~3x-5x and EBITDA margins of ~8%-12%. • In the specialties segment, it expects to incur a capital expenditure of ~₹550 cr. The asset turnover would be ~1x-2x and EBITDA margin of ~20%-25%. • In the essentials segment, the company would increase its capacity by 1.75x from the current capacity of 240 KT (kilo tonne). In the specialty intermediates segment, the company is doubling the capacity of ketene & diketene derivatives. • In n-Butyl Acetate plant at Dehej, Gujarat, the company propose capacity of 70 KTA (kilo tonnes per annum). The project will entail an investment of ₹91.4 cr. It will be funded through a mix of internal accruals and debt. It is expected to be completed by Q4 FY26. • In Ethyl Acetate at Lote, Maharashtra, the company propose capacity addition of 70 KTA. The project will entail an investment of ₹90.5 cr. It will be funded through a mix of internal accruals and debt. Currently, the company has existing capacity of 200 KTA with capacity utilization of more than 90%. It is expected to be completed by Q4 FY26.

Laxmi Organic Industries 120-170
Expected level 230
Support 100

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