Industry is experiencing buoyancy since June: U Shekhar, Galaxy Surfactants
U Shekhar, Managing Director, Galaxy Surfactants, talks about Q4FY20 numbers, the impact of COVID-19 on the business and emergence of speciality chemicals during an interview with Swati Khandelwal.
U Shekhar, Managing Director, Galaxy Surfactants, talks about Q4FY20 numbers, the impact of COVID-19 on the business and emergence of speciality chemicals during an interview with Swati Khandelwal, Zee Business. Edited Excerpts:
Your revenue has declined in Q4FY20 but there is an improvement in PAT and margin. Can you let us the factors that played an important role in improving profitability and margins?
We always measure us in terms of volume growth rather than revenue growth because our raw material prices keep going up and down and sync with that our selling price vary. So, we always measure ourselves in terms of volumetric growth and ensure that we shall grow ahead of the market in whichever market we are operating. And then we say that our EBITDA growth should be higher than the volume growth and the PAT growth obviously should be higher than the EBITDA growth, all intensive in percentages. So, we always measure ourselves in terms of EBITDA per tonne, and I can say that our EBITDA per tonne remains more or less remain in the band of 15% -17% in metric tonnes as a whole for this organisation. In terms of last quarter and last year, we have been in a particular band of EBITDA. As far as the year is concerned, we have grown in volumes and have grown as far as the PAT is concerned. So Galaxy, as you know, has been at a significant level from the market dealership presence perspective and in India, we have grown in this country over the last 40 years, since inception. We have grown all the customers in this country and have grown the industry. The industry has grown by more than 200 times in the last 35 years or so. It has been a very interesting journey for Galaxy over these last 40 years being a very significant player as far as the industry is concerned in this country.
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How did COVID-19 impact your business and which all segments got impacted and where do you see a rise in demand?
COVID19 has an impact in April and May, but from June, we are sort-of experiencing buoyancy. As far as our business is concerned, what we are seeing that people are cleaning more and more whether they are cleaning themselves, cleaning their hands as well as houses. Cleaning has become a very-very important object not only in India but across the world. So, let’s see how far this buoyancy goes, but one thing is there that people are bothered about hygiene and cleanliness much-much more than what they were before. Something flat or impacted is the discretionary expenditure in terms of personal beauty. What we are seeing is that being at the home; people are possibly more guarded concerning any shot of discretionary expenditure. So anything to do with beauty or anti-ageing or cosmetics, I think they are more or less flattened but anything related to wellness, safety and cleanliness are all around, and that is an experience since June. In terms of operations, we have seen that May was much-much better than April and June was much better when compared to May and July again promises to be as good as June if not better than it. The country also apparently seems to be coming back to some normalcy concerning the industry.
Specialty chemicals are emerging as a big and important segment and sector and the government also have a focus on making Indian companies self-reliant. What kind of opportunities you are seeing in it under the whole Atmanirbhar opportunity and what role will you play in it?
If you have a look at the Indian personal care industry, then it has been Atmanirbhar for quite some time. It is hardly any short of imports of home personal care products in this country. And I have told you that you and it has been not so in the last few years, but it has been so since 1986. And, we have been a very important player as far as this industry is concerned. But at this particular time what we have seen in terms of opportunity is in the aspect of sustainability, people want the more and more sustainable and clean product. And, Galaxy has been manufacturing surfactant products which have been playing a very-very significant role in this trend, as far as the industry is concerned. Secondly, people want more and more non-toxic preservatives as you know preservatives are a very important part of any personal home care products. It has been preserved properly because Indian preservatives have a shelf life of two years or so. So, every single home care product need to be preserved and today consumers not only across the world but also in India prefer more and more non-toxic preservatives. Galaxy has been at the leading edge as far as these products are concerned. So, what we see that the emergence particularly in this country of more and more body care products. Baby care is getting much more accentuated particularly in the last three months as our customers are experiencing a good amount of buoyancy and growth for baby care shop this time.
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