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Rossari Biotech hikes prices, sees 50% jump in revenue, profit this fiscal

Rossari Biotech is expecting to close FY'22 with at least 50 per cent growth in both topline and bottomline on the back of rising demand and a substantial price hike that will help boost margins

Rossari Biotech | price hike

Press Trust of India  |  Mumbai 

Rossari Biotech
Rossari Biotech

The largest textile specialty chemical manufacturer Rossari Biotech, which had a successful amidst the first wave of the pandemic, is expecting to close FY'22 with at least 50 per cent growth in both topline and bottomline on the back of rising demand and a substantial that will help boost margins.

Apart from being the largest textile specialty chemical manufacturer, Rossari is also a leading supplier of specialty chemicals to the animal and poultry feed industry, and FMCG and is present in 17 overseas markets like including Bangladesh, Vietnam and Mauritius.

The city-headquartered firm hit the market with a Rs 496-crore initial share sale in July 2020 that was a runaway success with 79 times over-subscription and a 57 per cent listing day rally from issue price of Rs 425. Since then it has rallied massively to peak at Rs 1,592 last month and closed at Rs 1,489.60 on Wednesday.

The board has set us a target to more than double our revenue and profit from the FY'20 levels by FY'23, both through organic as well as inorganic routes.

"We closed FY'21 with Rs 709 crore in topline and Rs 80 crore in net income, which respectively stood at Rs 600 crore and Rs 65 crore in FY'20. I expect to close the current fiscal with a 50 per cent growth in both turnover and profit," Sunil Chari, the co-founder and managing director of Rossari, told PTI on Wednesday.

He said both the numbers would have been better had it not been for the massive jump in input costs, and many of which has on average doubled and the resultant pressure on margins.

For instance, acrylic acid price has more than doubled to Rs 180/kg, while the other key input of acetic acid rose is trading at Rs 120 now from Rs 50 a few months back, Chari said. Prices are moving up very fast because of logistic problems with the Chinese suppliers, he added.

"My problem is that I cannot pass on the entire input cost to my end-customers, as I have over 5,000 products and the cost pressure is not uniform across all of them. Yet I cannot but hike prices at least in low double-digits from this month which should help me recoup my lost margins in Q2," Chari said.

But for the raw material cost, the Q2 profit would have been the best-ever, he said and blamed Chinese suppliers for the crisis.

Chari, however, quickly added that from Q3 onwards, margins should be boosted by on one hand and lower input cost on the other as they are sourcing acrylic acid from BPCL's Kochi facility.

"We are the largest consumer of BPCL when its comes to acrylic acid now and have already took delivery of 160 tonne of the this key material from their Kochi facility. We may not now be importing from China at all. With BPCL supply we can also lower our dependence on LG Chemicals of Korea and the German BASF," said Chari, who along with Edward Menezes (chairman), founded Rossari in Mumbai in August 2009.

On the listing, Chari said this has immensely increased their market visibility on one hand and on the other drawing better talent from across the industry as well as also making him and Menezes entry into the rich list.

Hinting at more acquisitions, he said even after two buys in recent months, the company is debt free.

Rossari had made two strategic acquisitions in the speciality chemical space in Q1 -- Unitop Chemicals for Rs 421 crore in June and Tristar Intermediates in July for Rs 120 crore. The company is also acquiring 50 per cent stake in Romakk Chemicals Rs 7.5 crore.

On exports, Chari said currently it constitutes only around 10 per cent at Rs 70 crore but is working on to take it Rs 100 crore this fiscal and Rs 200 crore in FY'23.

Rossari has its manufacturing units at Silvassa and Dadra and Nagar Haveli with an installed capacity of 1,20,000 tonnes per annum and is setting up a unit at Dahej in Gujarat with an installed capacity of 1,32,500 tonnes per annum (tpa). That apart it has two R&D facilities in Silvassa and Mumbai.

Overall, it has three main businesses -- the biggest being home, personal care and performance chemicals, followed by textile specialty chemicals and animal health and nutrition products, and serves customers across FMCG, home-care, personal-care, industrial cleaning, textile speciality chemicals, performance chemicals, and animal health and nutrition and pet care businesses.

In Q1 of FY'22, it had a revenue of Rs 231 crore, up from Rs 109.5 crore a year ago, and earned a net income of Rs 24.55 crore as against Rs 15.49 crore.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, October 06 2021. 20:00 IST