ROSSARI - ROSSARI BIOTECH LIMITED Share Price

Here are the major questions asked during the Q&A session of the earnings call and their corresponding detailed answers:

Question 1: What is the expected timeline for achieving optimal capacity utilization at Dahej and Unitop, and when might we see EBITDA margins return to levels seen in FY25?

Answer: The ramp-up will take about two years, so we expect to reach optimal utilization by 2027. Currently, the Ethoxylation capacity has just been commissioned; we achieved 10%-15% utilization this quarter, and as capacity utilization increases, we anticipate margins will improve accordingly.

Question 2: Can you elaborate on the rationale behind setting up the manufacturing facility in KSA? Is it driven by logistical or cost disadvantages in the current export model?

Answer: Our plans for overseas expansion are not mainly due to tariffs; we have a solid export business growing over the last years. The KSA facility will help us meet strong customer demand and improve our service capabilities, taking advantage of our established customer network.

Question 3: What kind of investment are you planning for the KSA facility, and what specific advantages does it offer compared to India?

Answer: We are evaluating project costs, land availability, and supplier contracts in KSA, which benefits from proximity to raw materials. Establishing this facility aligns with improving global supply chain resilience and is expected to leverage lower raw material costs compared to India.

Question 4: Can you provide insight on how profitability is expected to scale in the coming years, given the current stagnation at a PAT level of around Rs. 300 million per quarter?

Answer: We aim to enhance profitability by focusing on higher margin segments, particularly reducing losses from the B2C vertical. Additionally, we expect some capacity expansions to contribute positively to margins, especially with new products launched over the next year.

Question 5: How is the company approaching capacity expansion, and what is the expected timeline for effectiveness, especially with the new facilities?

Answer: The new facilities are currently operating at 10%-15% capacity utilization. Within two years, we expect to stabilize and achieve optimal utilization, targeting around 90% by FY27.

Question 6: What is the contribution of exports to the current quarter's revenue, and how does this impact growth?

Answer: Exports contributed 33% to our total turnover this quarter. Given that the export segment has consistently outperformed domestic growth, we anticipate exports will continue to play a crucial role in our revenue growth strategy moving forward.

Question 7: Can you clarify the CAPEX planned for FY27, especially concerning the recently announced greenfield facility in KSA?

Answer: Most of our capacity enhancement CAPEX has been completed. We anticipate additional expenditures mainly focused on product development and R&D rather than extensive capacity expansion in the upcoming years, with the KSA project requiring a higher capex than the initially approved $8 million equity infusion.

This format captures the essence and key details of the questions and respective answers while maintaining focus on the provided earnings call transcript.