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Galaxy Surfactants says EBITDA/ tonne hit by raw material prices; supply chain issues still a concern

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U Shekhar, Founder, Promoter and Managing Director of Galaxy Surfactants, on Thursday, said that international logistics continues to be a challenge. Shekhar mentioned that supply chain issues have persisted the whole of last year and he expects it to improve only by next quarter. According to him, the fluctuating raw material prices have hit EBITDA as well.

U Shekhar, Founder, Promoter and Managing Director of Galaxy Surfactants, on Thursday, said that international logistics continues to be a challenge. Shekhar mentioned that supply chain issues have persisted the whole of last year and he expects it to improve only by next quarter.
“The situation is no different as far as supply chain and logistics are concerned, as it has been for almost the entire last year. There is still no let up. International logistics continues to be a challenge.”
Additionally, he also explained how rising raw material prices have impacted EBITDA. “The EBITDA per tonne has been severely impacted because of the fluctuation in prices. So there is certainly a lag in terms of catching up with prices against the volatility in terms of raw material prices which happen,” he said.
This volatility has prompted him to lower volume growth guidance to 4-6 percent from the earlier 6-8 percent. Shekhar explained that this is despite demand remaining pretty robust throughout.
He said, “As far as volume growth is concerned, it has been severely impacted because of supplies, though the demand has been pretty robust but our ability to respond to customers’ needs and supplies has been severely impacted."
"So we see volume growth to be muted as far as this year is concerned compared to last year. We would reduce our volume guidance, we would be happy if we grow at about 4-6 percent or so,” he explained.
On the categories that are doing well, Shekhar said, “All the categories are growing well. Performance surfactants are going pretty well in the evolving markets, whereas the specialty surfactants are growing well too. So both these categories are important for us and both the categories are doing pretty well.”
Shedding light on the capex situation, Shekhar believes that capex coming on stream will be a breather for the company. He mentioned that fixed turnover ratio will be anywhere between 2-3 times in the case of future capex as well.
Watch the video for the full interview.
 
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