Sudarshan Chemical Industries Ltd share Price

Established in 1951, Sudarshan Chemical is a leading player in the Indian colour pigment industry with ~35% market share and is also among the top four players globally.

• It has a wide portfolio of 4,000+ varieties of products of Azos, blue and green, high performance pigments (HPPs), effects, pigment preparations and inorganics
• Among end users, coatings industries contribute highest followed by plastics, inks, cosmetics and other applications

Sudarshan Chemical’s topline came below, while bottom-line remained largely in line.

• Reported revenue growth of 8.8% YoY to ₹ 627.2 crore, led by higher growth from engineering (up 56.3% YoY) & pigments (up 4.9% YoY)
• Gross margins fell by 120 bps YoY to ~40.8% while EBITDA margins contracted by 150 bps YoY to 13.7% due to higher COGS (+11% YoY)
• EBITDA declined 1.6% YoY to ₹ 86.1 crore. The decline is led by elevated level of Input costs across multiple intermediates.
• PAT was down 16.3% YoY to ₹ 44.7 crore. The lower growth in bottom-line is on account of higher taxes (22.4% v/s 16.8% in Q4FY21)

Highlights

• Capacity utilisation during Q2FY22 was at ~ 60% of operating capacity
• Rate of benefit under RoDTEP for Pigment products notified at 0.80%
• Intermediates price increase pass through continued through Q2FY22
• Severe impacts due to coal and logistics cost escalation
• Second wave of the pandemic did impact domestic business during Q1; Revival in demand seen in Q2
• Subdued demand and availability of containers in Q2 were main challenges for exports

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