Rossari Biotech expects 50% revenue growth on back of consolidation of new acquisitions

Rossari Biotech expects 50 percent growth in revenue due to consolidation of new acquisitions, Edward Menezes, executive chairman, told CNBC-TV18.

The specialty chemicals company reported a strong set of earnings for the June-ended quarter with good improvements both on a year-on-year (YoY) and quarter-on-quarter (QoQ) basis. Revenue and profit after tax (PAT) have surged but margin seems to have contracted to 16 percent this quarter.

Menezes said, “We have done almost three acquisitions in the last two months - Unitop Chemicals, Tristar Intermediates and Romakk Chemicals. This year (FY22), we expect 50 percent growth in our revenues over last year because we will be able to consolidate the revenues from our acquisition.”

On business, he said, “The coming quarter looks challenging, price increase pass on is inevitable as the entire pipeline of old raw material stock is almost dry for all the players and the trend continues to be upwards. Therefore, we are focusing more on the asset turnover.”

On margins, he said, “The highest gross margin vertical is the animal health and nutrition. The second being the home, personal care and performance chemicals (HPPC) followed by textile speciality chemicals and it’s our cash cow.”

He further explained that the company might have to take more price hikes to ensure stability in margins. He shared that the logistics and freight costs have gone up substantially and the raw material price volatility has been unprecedented as well.

Menezes also believes that there is a high growth possibility in the animal nutrition business. He also mentioned that the company has plans to enter the aqua and cattle market as well.

For the entire management interview, watch the video.