Arvind Singhania, Chairman and CEO of Ester Industries in conversation with CNBC-TV18 said that as raw material prices had gone up by 70 percent in the past five months, the company had to pass on the hike in raw material prices.
"Raw material prices have grown substantially over the past 5 months by almost 75-80 percent. We have been able to pass on the raw material increases. In February we saw a bit of softening, but that has recovered in March," he added.
Speaking about BoPET spreads, he said that it is similar to Q3 levels. For specialty polymers, he said that though it was hit by COVID-19 pandemic, Q4FY21 has started seeing a recovery.
"Right now the spreads are running pretty similar to the spreads of Q3. Right now it is running at about Rs 55 per kg. Going forward we expect the market to be strong. So, outlook for polyester film looks good. As far as specialty polymers are concerned, it was COVID in calendar 2020, but Q4FY21 has started seeing positive growth and recovery. Specialty polymers we should be about Rs 65 crore in FY21. FY22 we expect to be in the range of Rs 120-140 crore," he explained.
He expects Q4 margins to be around 30 percent. "Once you grow the critical mass, the EBIT margins go up substantially. So, it should be upwards of 30 percent. For the whole of next year, we are targeting a turnover of Rs 120-140 crore with EBIT margins between 35-40 percent," he said.To know more, watch the video.