We are focussed on growing our export market: Sunil Srinivasan Chari, Rossari Biotech

“Yes, our quarter-on-quarter growth in HPPC continues to remain strong and we have covered up any loss of customer sale. In terms of margins, if you see consecutively in the entire group, we have been able to increase gross margins and EBITDA margins quarter-on-quarter for the last three quarters,” says Sunil Srinivasan Chari, MD, Rossari Biotech.

How has the demand and the performance been across various segments, whether we talk about textile, animal health, how are things looking?
For the first nine months of the year, we did about Rs 250 crores and Rs 168 crores of EBITDA. This is the highest ever we did in our history. Demand for textiles was a little muted but in the last few months, we see uptick in textile also. The home personal care and the animal nutrition are the strong business areas for us. Our acquisitions, Unitop and Tristar have done well too. So we have an optimistic view for the coming year too.I also want to talk about the HPPC segment that was impacted mainly due to the customer losses. Now, have you been able to compensate by new customer addition and on-boarding on that front as well?
Yes, our quarter-on-quarter growth in HPPC continues to remain strong and we have covered up any loss of customer sale. In terms of margins, if you see consecutively in the entire group, we have been able to increase gross margins and EBITDA margins quarter-on-quarter for the last three quarters.

Also, in terms of the key raw material prices when you look at acrylic acid, it has actually seen a sharp fall on a quarter-on-quarter basis when you compare 25% downtick on a quarter-on-quarter basis. So can we expect a good recovery in terms of margins in the coming quarters? Is that going to be a sustainable one? And which segments will be leading this recovery then in margins?
All the key raw materials now have come back to nearly pre-Covid levels and that is why our finished goods prices also are less. And so the top line seems less, but the volumes are definitely better than last year. In terms of margins, as I said, last three quarters we have recovered and we have gone to 13% plus and we are definitely hopeful for an improvement on this in the next financial year as well.

In the last quarter, subsidiaries witnessed a slowdown due to subdued demand. How has the performance been this quarter so far? Could you also just tell us about some trends in exports as well, particularly considering the global situation?
So especially Tristar was affected in the last quarter because of the Ukraine war. Europe is a big area for Tristar but we have seen healthy uptick in the last couple of months from Europe. USA demand is good. We participated in exhibition in silicone in Netherlands last week and we saw very healthy demand from both Europe and Turkey at the exhibition. So, I think Europe demand is holding up now and USA, Brazil, Argentina in the last three weeks haven’t seen subdued demand in any of these areas. The financial markets show something, but in terms of our demand on the ground it is good.

There has been a different sort of a move that has come into the chemical industry in India. You think it is a trend which is starting and we are seeing a lot of chemical players, right from the bigger ones like SRF to smaller ones announcing capex, coming to markets, raising funds. You think that that market share trend over the next four-five years is only looking better for Indian exporters?
Yes, we had a big agrochemical major meeting last week. For capex there is a lot of healthy demand for the China plus one story. We are not exactly into the China plus one story, but we see gradually a lot of customers coming from China to India for all categories, not only for the polluting products which has very healthy demand, our focus is on sustainable green chemistry. As you know, our four chemistry areas are acrylic, surfactant, silicone and enzymes. We see a very-very healthy demand to replace China in every segment in the chemical industry.

As you said that you are a part of the agrochemical industry. Do you think there is an uptick to your margin which is available, especially from the Europe segment? Is that something which you are looking forward to?
If you see, USD has appreciated, so dollar exports definitely helps and euro also has stood up well and what we see is a weakening in the dollar index and they say it may go less than 100. But we still see our exports of Rs 300 crores plus and we are focussed on growing the export market well because exports in dollars and expenses in rupees is a good way for us to grow.