- 05 Aug 2024
- ICICI Securities
SUDARSHAN CHEMICALS Q1FY25- PIGMENTS BUSINESS FIRM BUT ENGINEERING DECLINES
SUDARSCHEM - 982 Change: 5.60 (0.57 %)News: Revenues grew 4% YoY to ₹ 634 crore, as 10% growth in pigments to ₹ 589 core was neutralized by a decline of 44% in Rieco sales (engineering division) to ₹ 37 core. EBITDA grew 15% YoY to ₹ 81 crore and margins stood at ~13% driven by better GPM (up 130 bps to 46.3%) and better operating leverage in Pigments. Adjusted PAT grew 30% YoY to ₹ 58 crore.
Views: The numbers were below our expectations mainly due to engineering division performance which is lumpy in nature. However, pigments sales were firm and are expected to better in future with favourable global scenario. The company in the last six months has launched 11 new products in India as well as international markets and these are expected to provide growth and favourable operating leverage going forward.
Impact: Neutral