Speciality Chemicals of Galaxy Surfactants grew by 12% in Q3FY21: U Shekhar, MD

U Shekhar, Managing Director, Galaxy Surfactants, talks about Q3FY21 numbers, the ongoing trend of the raw materials and PLI scheme among others during an interview with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: You have witnessed a strong performance across the segments. Tell us about it and the area from where you are getting good demand?

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A: Our growth of the last quarter, i.e. Q3FY21, has been from all the sides and it happened in all geographies and all the segments. And, there has been good growth in the new production, especially the special ingredients, has grown a lot. In this quarter, our volume sales were equivalent to the second-quarter sales and, if compared with the last year's period then the speciality ingredients have grown by 12%. So, the consumers' priority - protection, clean and hygiene - is continuing and that's why we would say that the growth is quite strong and buoyant across all the geographies

Q: Please tell us about how the ongoing trend of the raw material prices will impact your margins, and do you think that the posted margins are sustainable, or some pressure can be felt?

A: As I have said it earlier as well that the criteria for our performance are greater than market growth because volume growth is greater than market growth, then EBITDA growth better than volume growth and PBT growth greater than EBITDA growth. So, volume-wise we have grown better than the market. And, when you talk about the EBITDA margin than one should always be on EBITDA per ton rather than EBITDA per percentage of volume, I mean, on revenue, because the revenue can keep going up and down depending upon the raw material prices. We have seen that in these two quarters our EBITDA per ton has been approximately 18,500 to 18,600 per metric tons.

Q: The government is talking about the PLI scheme for the chemical sector, especially Surfactants. What are your expectations on the front and what kind of interest the company will have in participating in it? 

A: As far as production linked incentive is coming it is available for any new ventures, a new entity. You know that we have taken land in Jhagadia and we are in the process of applying for environmental clearances. But we are not sure that we would be given the environmental clearance by the period for which this PLI scheme is valid. In any case, we had found that it is more worthwhile to continue doing business in our existing name rather than creating a new entity. So, the new land in Jhagadia will certainly take care of our expansion schemes for both performance products as well as speciality ingredients. We are not taking much advantage of the PLI scheme.