- 30 May 2022
- ICICIdirect Research
SUMITOMO CHEMICAL REPORTS NUMBERS LARGELY IN LINE WITH ESTIMATES
SUMICHEM - 481 Change: 7.30 (1.54 %)News: Sumitomo Chemical reported topline growth of 24% YoY to Rs 665.1 crore against our expectations of Rs 650.6 crore. The revenue from agrochemical segment was up by 29.3% YoY to Rs 618.4 crore, while the same from other segment remained at Rs 46.7 crore (-17% YoY). We expect strong exports growth should have led better performance for Sumitomo India this quarter. OPM for the quarter expanded by 300bps YoY to 16.4% leading to EBITDA growth of 53% YoY to Rs 108.9 crore as against our estimates of Rs 114.7 crore. The EBITDA from agrochemical business remained at Rs 104.8 crore (+59% YoY), while the same from other segments was Rs 4.2 crore (-20% YoY). Higher taxes than expected (28% v/s our estimates of 14%) led bottom-line to grow at 38% YoY to Rs 74.7 crore against our estimates of Rs 92.8 crore. However PBT remained at Rs 104.1 crore largely in line with our estimates of 107.8 crore.
Views: SCC Japan led strong growth in the LATAM, North America & Europe and it is upbeat with the commentary of maintaining growth momentum there. Moreover, its speciality segment has been witnessing strong growth and thereby one can expect sustainability of operational performance. We believe, on the longer time frame, the story remains intake given that SCC Japan’s plans to outsource part of their technical requirements to Sumitomo Chemical India. Further, Nufarm can also aid strong revenue visibly for Sumitomo chemical India going ahead..
Impact: Neutral