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After the company announced that it would enter a new lucrative white pigment titanium dioxide (TiO2) variant, Meghmani Organics rose 4.19% to 95.70 rupees.
TiO2 is a naturally occurring white opaque mineral that uses bright white pigments. Its industrial applications include paints, coatings, plastics, polymers, inks, dyes, paper and cosmetics.
The project is expected to be put into use in the first quarter of FY24, adding Rs 7 billion to Meghmani Organics' revenue throughout the fiscal year. The company expects an EBITDA margin of 25% and a high rate of return, that is, ROCE and ROE are each above 20%. The new project will be funded by an appropriate combination of internal accruals and debt.
India’s annual demand for titanium dioxide is 2,50,000 MTPA, with a compound annual growth rate of 4.2%. India imports 80% of its titanium dioxide demand. India's titanium dioxide production capacity is 81,000 MTPA.
Ankit Patel, CEO of Meghmani Organics said: “The company has strengthened its pigment division’s value-added proposition by entering the white pigment titanium dioxide (TiO2). Meghmani Organics’ entry into titanium dioxide (TiO2) is in line with the company’s commitment to phthalocyanine pigments other than blue and green. The sector creates sustainable growth. The project is expected to become India’s largest factory. Titanium dioxide (TiO2) is an imported alternative product that meets the government’s vision of "Made in India" and "Atmanirbhar" Bharat."
On a consolidated basis, Meghmani Organics' net profit fell by 0.44% to 65.26 crore, while net sales in the second quarter of September 2021 increased 28.48% to 548.22 crore compared to the second quarter of September 2020.
Meghmani Organics is one of the leading diversified chemical companies involved in the business of pigments and agrochemicals. Meghmani Organics is one of the world's three largest manufacturers of phthalocyanine pigments, with a 14% market share. As of fiscal year 21, approximately 79% of the company's revenue came from the export market.
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