- 10 Nov 2022
- ICICIdirect Research
SUDARSHAN POSTS MUTED NUMBERS IN Q2FY23
SUDARSCHEM - 1130 Change: 0.05 (0.00 %)News:
Sudarshan Chemical reported revenue growth of 6.1% YoY to Rs528.4 crore against our estimate of Rs609 crore, led by 4.8% growth from other segment comprising engineering business and 6.2% growth from pigments segment. We expect revenue grew mainly due to realization growth. EBITDA margins contracted by 250bps YoY to 8.1%. EBITDA stood at Rs42.9 crore (-18.9% YoY) against our estimate of Rs47.6 crore. RMAT cost increase by 360 bps to Rs323.9 crore. Subdued demand across geographies and coal cost escalation has impacted margins performance. Net Profit decline by 80% YoY to Rs4.5 crore against our estimates of Rs13.8 crore. Other expenses grew by 6.2% YoY to Rs117.6 crore
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The company has been struggling with input price inflation due to higher prices such as caustic soda and other crude based derivatives. High raw material prices and delay in ability to pass on price hikes adverse forex fluctuations & interest rate movements may have affected margins. We expect normalizations of margins can take around two to three quarters at least. We await management clarification for recovery of margins
Impact:
Negative