Rossari Biotech

Business Verticals

Founded in 2003, Rossari Biotech manufactures chemicals for the following major product lines:

  • Home, Personal Care and Performance Chemicals (HPPC).
  • Textile Specialty Chemicals (TSC).
  • Animal Health and Nutrition (AHN) sector.
Segment wise revenue breakup.

Manufacturing Facilities

Rossari currently has one manufacturing facility in Silvassa (Dadar and Nagar Haveli). The Silvassa facility is undergoing capacity expansion, it’s in the process of adding 20,000 MTPA over the already installed capacity of 100,000 MTPA. [MTPA is Million Tonnes Per Annum].

R&D facilities

Rossari currently has two R&D facilities, one within the Silvassa facility, and the other in Mumbai (Maharashtra).

  • Development of new products and formulations.
  • Customizing products to customer expectations and end-user preferences.
  • Making manufacturing process more efficient by focusing on shorter lead-times and cost competitiveness.

Distribution Network

Rossari Biotech has:

  • 204 distributors spread across pan-India.
  • 27 overseas distributors spread over 17 foreign countries.
  • 2 international offices (Vietnam and Bangladesh) as these two are two primary overseas market for TSC products.
  • 4 regional offices (Delhi, Ludhiana, Ahmadabad, and Surat) for marketing their products.

Financials

The following are the financials of Rossari Biotech for Fiscals 2017, 2018, 2019, and H1–2020, (all the values are in ₹ crore):

  • Revenue has grown by 32.33% CAGR.
  • PAT has grown by 65.82% CAGR.
  • Profit Margin (PAT/Revenue) is consistently increasing.

Objectives of the IPO

The issue is open for subscription between 13 July 2020 and 15 July 2020.

Addendum

I would have talked about the major risks in this section, which, in Rossari’s case, was the fall in TSC sales induced by covid. At that time, the fall in revenues in the TSC segment was being compensated by the rise in revenue in the HPPC segment (which was caused by the increased demand of sanitation products because of covid).

Image source: Q3F21 Investor Presentation
  • HPPC revenues have grown from ₹76 crores to ₹120 crores.
  • TSC revenues have normalized (mildly increasing from ₹70 crores to ₹78 crores).

Final Words

I have made this post for archival purposes. The original analysis was done at the time of IPO in July 2020 (and hence is a little old), which is why I appended the Addendum section.

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Abhishek Pratap Singh

Abhishek Pratap Singh

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This space is where I will be analysing quarterly results of some listed companies, along with the RHPs of IPO-bound ones.