Sudarshan Chemical posts Q1FY23 numbersSUDARSCHEM - 488 Change: 0.50 (0.10 %)
News: Sudarshan reported revenue growth of 16.9% YoY to Rs554.2 crores against our estimates of Rs524.7 crores, largely led by 35.1% growth from other segment comprising engineering business. EBITDA margins contracted by 560bps YoY to 7.5%. EBITDA stood at Rs41.4 crores (-33.2% YoY) against our estimate of Rs60.3 crores. RMAT cost increased by 26% YoY to 330.5 crores (against 244.7 crores in Q1FY22). Net profit decline by 72.9% YoY to Rs7.1 crores against our estimates of Rs24.8 crores. Other expenses which includes Foreign Exchange loss stands at Rs4.28 crores in current quarter.
View: Higher RMAT prices and delay in passing the price hikes to customers weighed on EBITDA margins. The revenue growth, it seems, has not caught up strong growth demonstrated by Paint companies. We expect gradual recovery in the margins scenario as prices of major RMAT seems to have stabilised.