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  • Writer's pictureShekhar Yadav

Balaji Amines and Alkyl Amines- Q3FY19 analysis

Updated: Jul 3, 2021

Following up on my blog on Indian Amine industry, let me take you through how these 2 companies have performed in the latest quarter(Q3FY19) via this blog "Balaji Amines and Alkyl Amines- Q3FY19 analysis”. Both these companies came out with the quarterly result towards end of January.

Given that both the companies have been generating best-ever margins in the last 1-1.5 years, any slight change in business scenario or sentiments would impact the numbers.  

Both the companies showed a drop in their margins on a Quarter on Quarter basis but the drop was fairly big for Balaji Amines which also witnessed margin drops YoY basis. While both of them uses the same raw material, the margin drop for Balaji Amines is puzzling.

Let’s have a look at the numbers.


Alkyl Amines: Q3FY19 Analysis

Alkyl Amines showed another robust quarter of growth on the back of the new plant commissioned at Dahej in March 2018 with a capacity of 30,000 TPA of Methylamine and its derivative.

Along with the growth in revenue, Alkyl Amines was able to improve the margins on a YoY basis.

Balaji Amines and Alkyl Amines- Q3FY19 analysis


Balaji Amines: Q3FY19 Analysis

Coming to the other amine company ‘Balaji Amines’. Since they are running at almost full capacity, the revenue growth has been largely subdued.

Also, I had expected the sales to be higher given that the last quarter the management claimed that the sales were low due to strikes implying some backdated inventory stocked last quarter to be sold this quarter.

In addition, the margins had seen a sharp fall to the tune of 5%.

The new capacity is still awaiting clearance for more than a year now. 

Balaji Amines and Alkyl Amines- Q3FY19 analysis


Balaji Amines and Alkyl Amines- Q3FY19 analysis

What might have caused the change in the margins?

Balaji Amines and Alkyl Amines

To find our answer, let’s look at the product profile of both the company. Both have more or less similar product profile with Balaji Amines having an edge in terms of a greater percentage of value-added products.

One possible reason for the margin drop maybe the more than 20% drop in prices of DMF for the last quarter but DMF’s contribution to sales is very small.

DMA HCL’s application in metformin keeps the demand strong, the same stands true for DMAC given the Anti-dumping duty.

The API facilities shut down in China added with the demand pull, it is likely for these companies to continue their growth as well as margin trajectory.

Balaji Amines got the NOC of environmental clearance on 11th June 2019.


Balaji Amines and Alkyl Amines- Q3FY19 analysis

I thought looking at the cost as a percentage of Net sales might throw some insight. You can have a look at the numbers below.

Balaji Amines and Alkyl Amines- Q3FY19 analysis

Alkyl Amines and Balaji Amines

Based on the above numbers, the only explanation of the drop in margin seems to be the excellent past performance by the 2 companies, in particular, Balaji Amines. 

In case I get any further information, I will update the blog accordingly.

As I have learnt from @vishnu570  , there is a difference between the how the end products are manufactured by the 2 companies:

Alkyl Amines’ raw materials: Ethanol, Methanol, Ammonia & Acetic Acid 

Balaji Amines’ raw material: Methanol & Ammonia

Since Methanol is a crude oil derivative(Natural gas to be precise), it is imported and the prices vary according to natural gas prices.

Whereas Ethanol is obtained from Sugarcane in India. 

Methanol prices surged due to rising crude oil prices which now have cooled whereas Ethanol price which was stable in the last quarter has seen sharp upmove due to Indian govt encouraging use of Ethanol for blending in Petrol as it enables cleaner burning of fossil fuel as well as reduces import bill. Due to high domestic prices it’s likely that Alkyl Amines will import Ethanol.  Also, since Alkyl Amine store Ethanol for 4-5 months, the complete impact of the rise on Ethanol prices may not be felt in the coming quarter.

Methanol Prices(

Ethanol Prices(


Link to all my blogs on Balaji Amines & Alkyl Amines

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