Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis

July 1, 202012:48 pm

It has been a while since I looked into Balaji Amines & Alkyl Amines in details, though I have been tracking the companies. In the current blog ” Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis ” I will be sharing my learning as well as updates in the 2 companies in the last one year. 

Link to all my blogs on Balaji Amines & Alkyl Amines

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis


When I first researched the Indian Amine industry in Dec 2018, my thesis was that the derived products of Balaji Amines is likely to fetch better margin & growth with the sectoral tailwind and the sudden price increase of Acetonitrile {one of the common products  (increased by 3x due to demand-supply mismatch) }will be short-lived.

What my learning from the thesis being turned wrong is that management’s execution capability matters a lot. While Balaji Amines struggled, Alkyl Amine prospered. Gauging management quality takes time. Also, even after Balaji Amines getting the NOC for the expanded capacity(quite significant capacity including acetonitrile which according to the management was just waiting for the Environmental clearance to get started) in June 2019(Q1FY20), there is hardly any improvement in the topline till Q4FY20. 

Another factor I assume that helped Alkyl Amines is the multipurpose plants which can be turned in short period to manufacture the product fetching better prices. Also, Alkyl Amine keeps debottlenecking its older plants to increase capacity & efficiency.


Coming to Balaji Amines Ltd, the company took loan on its books and then gives it to its subsidiary Balaji Speciality Chemicals Pvt Ltd. In my view what is the need for complicating things. Hotel business continues to be a drag, have been shut for the last 3-4 months due to COVID-19 and have been incurring fixed cost of ₹25 lakhs per month. Looking back it looks like capital misallocation. 

Alkyl Amines Chemicals Ltd sold its 30.44% stake in associate company, Diamines and Chemicals Ltd, the only subsidiary/associate company in November 2019. 

Acetonitrile- Why the price jump?

Since Acetonitrile is a commodity product, its prices are derived by supply-demand dynamics. So, for prices to go up either demand goes up or supply goes down. In case of Acetonitrile, it was the later.

Acetonitrile can be manufactured by 2 process: 

1) As a byproduct in the manufacturing of Acrylonitrile.

2) By the reaction of Acetic Acid & Ammonia- Acetonitrile manufactured by this method is used in Pharma industry as the byproduct in the other process consists of impurities.

Acrylonitrile finds usage in Auto industry but to the slowdown in the industry since 2018 and coz of some other disruption, some of the acrylonitrile capacity has been shut down, which reduced the production of acetonitrile. Due to the closure of acrylonitrile plants, acetonitrile production has gone down and hence the sudden increase in price which continues at an elevated level for more than a year now. 

Similar situation prevailed in 2008-09, when the acetonitrile remained at an elevated level for a long time.


Both the company’s management have indicated that the high price of acetonitrile is likely to continue. But it is anyone’s guess. Just the way price jumped suddenly in a few days, it can go down the same way. I am sure all player in the industry be willing to take advantage of the high price and expanding or setting up capacity of acetonitrile. Balaji Amines has already come up with a capacity of 9000TPA(Tonnes Per annum), will be taking the capacity to 18000T in FY21 and Alkyl Amine is going to add another 15,000TPA. With expanding supply, the demand-supply gap is likely to narrow down.


SO I  LEARNED THAT KEEP DANCING TILL THE TIME MUSIC PLAYS BUT NEVER GET DRUNK (Source:Vijay Kedia tweet). Keep an eye out on the price, you can get the price on an Android app called “indianpetrochem”. I missed the bus with similar thoughts around Deepak Nitrite.

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis
Acetonitrile Historical Price. Source:
Acetonitrile Latest Price. Source:

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis​

I have taken the standalone data as I have data already in the Standalone format. For Alkyl Amine, since there is no subsidiary, the numbers are fine but for Balaji Amines with the subsidiary becoming operational last year, it will be wise to look for consolidated numbers.

Balaji Amines Ltd- Consolidated numbers 

Alkyl Amines Chemicals Ltd- Consolidated numbers

Regarding various products of the company you can read this blog.

Balaji Amines Ltd- Quarterly Numbers

After 4-5 quarters of sluggishness, the company saw a turnaround sort of performance in Q4FY20 with revenue increasing by 14%(Consolidated), EBITDA margin increasing to 23.6%(Consolidated) and Profit margin to 13.6%(Consolidated). Even the standalone numbers are quite good. Company benefited due to lower raw material costs as well as higher volume offtake. Also, in Q4 there was very little impact on the company’s performance due to lockdown and were operating at a capacity utilization of 70% during the 10 days of March Quarter.

Their much talked about subsidiary ‘Balaji Speciality Chemicals Private Limited (BSCPL)’ turned profitable with a revenue of 21 cr in Q4FY20 compared to 4 cr in Q3FY20. The subsidiary was shut in April-May 2020 and commenced production in June first week. Regarding the products of subsidiary which are quite new, some of the end clients have started to test them out as their contracts with other suppliers end. The clients are taking one month order and will gradually extend to a quarter once they gain confidence.

The management said in the call that they are witnessing improved demand. 

The company owns a Hotel in Solapur,Maharashtra by the name of ‘Balaji Sarovar Premier’. Hotel is not operating for last 3-4 months has been incurring loss of about of 25 lakhs per month.

Balaji Amines also started producing acetonitrile since November 2019.  I doubt they would have ramped it up yet. 

Now, with the company getting the clearance for the added capacity as well as the subsidiary functioning, they have now lot of new or free capacity. 

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis​

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis
Alkyl Amines Chemicals td- Quarterly Numbers

Alkyl Amines had a flattish fourth quarter. But the margins were robust since the 3 quarters, I guess it would mainly be on the back of higher Acetonitrile prices.

Alkyl Amines is in the process of setting up an additional plant of acetonitrile of 15,000TPA(Current Capacity=10,000TPA) in Dahej and additional capacity of Methyl Amines from 30,000 TPA to 45,000 TPA in 2 phase. But due to COVID , it is likely to be delayed.

Alkyl Amines also supplies ethanol to refineries under the ethanol blending program of the govt.

With respect to lockdown, the company started production in April and now they are operating normally.  

Balaji Amines Ltd and Alkyl Amines Chemicals Ltd- Q4FY20 Analysis​​

Since the products manufactured by both Balaji Amines & Alkyl Amines are intermediates as well as commodity, their fortune is dependent on how the end industry is performing as well as supply-demand dynamics of its end products.  

About 75% of products manufactured by them goes into pharma & agrichem, which are doing very good. Other end industry are also doing good such as home care, personal care, tyres etc.

Similar to GMM Pfaudler which benefited due to pharma & agrichem doing well, amine industry is also  witnessing the tailwind.

In terms of idle capacity, Balaji have much more than Alkyl, and can take advantage of the tailwind, if they execute properly.


Other than Acetonitrile which is an exception, even remaining products are doing quite well. 


Shekhar Yadav

I am a full time stock market investor. The blog is an extension of my research, thoughts & opinion. Please don't consider anything on this website to be an investment advise.


  • Umang says:

    hi Shekhar

    on accounting red flags in both companies, i find that Balaji Amines management has not been very clean with respect to Balaji Spec Chem. The holding company owns 55% of the company, and continues deploying capital into it, while the remaining 45% is owned by the holding company promoters, who will enjoy the profits of the no profit chemicals.

    • Shekhar says:

      Yes, I missed that earlier but there is lot of un-needed transaction. I have mentioned this in the current blog also.

  • Vishal Pandit says:

    Hi shekhar !

    delighted to read your blog..

    can u explain me as a layman

    what is your fav in chemicals industry
    for 5 yrs plus

    alkyl amines
    deepak nitrite
    navin fluorine
    vinati organics


    is divis lab a good bet ?

    • Shekhar says:

      Hi Vishal,
      See all these chemical companies have different products and different demand-supply scenario. So, not possible to club them together. Also, I have studied just Alkyl Amines and Deepak Nitrite, so would not be able to comment.


    Shekar right now acetonitrile price is high which company feel that is not sustainable for long term so it developed another product Tetrahydrofuran ( THF ) which can be manufactured on same line as acetonitrile and If there is any volatility in price, going ahead their plan to manufacture Acetonitrile for six months and THF for six months. No company in India manufactures THF and its demand of 15,000 tonnes.( I mentioned in Twitter also )

    • Shekhar says:

      Hi Sir, Ya they have mentioned that since Acetonitrile prices are quite volatile, so they want to be do both THF(Goes into polymers) and acetonitrile. Alkyl got benefited from taking advantage of high acetonitrile prices.

  • Anant says:

    Can we hold both companies Balaji and Alkyl for three to four years ? What is your view please reply.

    • Shekhar says:

      These are cyclic commodity companies whose future is decided by demand-supply scenarios. So, even if you invest, you need to actively track the newsflow with respect to the company and its products. Also, since the products manufactured by these companies are intermediates catering to pharma & agri-chemicals, so their fortune is also dependent on the end consumer performance.

  • Manher Desai says:

    Dear Shekhar,

    Why Aklyl Amine is still not entering in production of DMF Di Methyl Formamide
    Do they have plans in the same area?

    Balaji is already manufacturing DMF but not sure about the quality
    BASF is world leader in DMF.

    • Shekhar says:

      Balaji Amines have been struggling with DMF. There is lot of dumping from abroad and since last 1.5 years they have been running with capacity utilization of 30%. They applied multiple times for Anti dumping duty which has been repeatedly rejected.It is good Alkyl is not into it.

  • Sudeep says:

    Hi, Sekhar
    It is clear that Alkyl Amine price gone up due to Acetonitrile price increase. Almost 60% of their revenue comes fro API and Pharma. Many analysts are positive on API due to China issue.What about the growth prospect of other products catering to Pharma and API

    • Shekhar says:

      Hi Sudeep, even Acetonitrile is used as a solvent for pharma industry. Most of the products made by these companies are commodity ones depending on demand-supply scenario. Definitely, the tailwind with Pharma & Agrochemical (75%) is helping other products as well.

  • M N Kumar says:

    Thanks for sharing your thoughts on these stocks. I have similiar thoughts with few variations of my own as follows:
    A. Alkyl is expanding capacity for Acetonitrile with a lot of confidence and are indicating that it is being done to derisk supplies to customers & on customer demand. Balaji is struggling to ramp up production volumes of Acetonitrile. It appears there is something more than that ‘meets the eye’ as far as this product is concerned. I have feeling the acetonitrile being made by both these guys are very pure compared to ‘by product of Acrylonitrile’ and pharma companies would pay a little premium for the purity and consistency. of course, absolute pricing would always be delta over global prices i.e., ‘no threat of imports’
    B. According to Balaji, DMF is viable if the prices are above 70 Rs with current methanol prices. I track DMF prices ( chemical weekly). The price seem to be constant at 84 for complete quarter. So there would be additional sales due to DMF volume rampup of Balaji Amines in this quarter.
    C. Balaji speciality chemical volumes would rampup in next few quarters although I do not believe management guidance based on my experience of last few quarters. Similiarly I do not believe in their ability to deliver revenues out of “mega project”. But I am sure they will grow. So I decide to believe quarterly sales rather than management guidance and turn optimistic before results.
    D. Balaji and Alkyl amines are expanding their production capacities in next 18 months to 3 years. I see some significant growth of top line for both companies.
    E. I keep wondering if Alkyl has been priced to perfection…

    Disc: I hold both these stocks in my portfolio.

    • Shekhar says:

      acetonitrile being made by both these guys are very pure compared to ‘by product of Acrylonitrile’ and pharma companies would pay a little premium for the purity and consistency : YES, THEY MAKE IT VIA ACETIC ACID ROUTE WHICH IS PURE COMPARED TO ACRYLONITRILE ROUTE WHICH CONSISTS OF IMPURITIES.

  • Kunal Mehta says:

    Good Analysis on both companies. Appreciate your point about the difference in execution of both companies. Just a few more points:
    1. Alkyl benefited from the capacity expansion which kicked in from March 2018 quarter. So the volume base went up.
    2. The spreads in Ethyl amines have been much better during FY2019-till date as compared to methyl amines where methanol volatility had an average negative imapct on spreads. That helped Alkyl more since it had a large capacity of Ethyl Amines.

  • Soko says:

    Hi Shekar, Great blog. I have 3 queries.
    1- You mention that Acetonitrile is a commodity chemical with no pricing power. But in the website on Alkyl Amines, they have listed Acetonitrile under Fine Chemicals which are high margin products. Can you clarify?
    2- I am currently studying the chemical sector. How do you get the info of whether some chemical is low margin commodity or high margin? I couldn’t find such info on the internet.
    3 – How do I keep track of the prices of chemicals? Is there a charting website providing this data?

    • Shekhar says:

      Commodity chemicals are those where the pricing is totally dependent on demand-supply scenario. Acetronitrile is one of them. In 2018, the management of Alkyl Amine were unhappy with the Acetonitrile prices being at ₹120 but today it stands at 350, a 3x jump given the poor supply situation.
      Margins- Mostly from attending conference calls

      Prices of chemicals- there are paid websites providing such data

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