The shares of the roofing solution provider fell up to 11 percent after the company’s net profit and revenue dropped by 83 percent and 51 percent QoQ, respectively in Q2FY25.
With a market capitalization of Rs 343.99 crore, the shares of Sahyadri Industries Limited were trading at Rs 314.25 per share, decreasing around 8 percent as compared to the previous closing price of Rs 340.95 apiece.
Reason for fall:-
The shares of the company have seen a bearish movement after Sahyadri Industries Ltd announced weak financial performance in which revenue plummeted by 11 percent on a yearly basis from Rs 120.40 crore in Q2FY24 to Rs 105.95 crore in Q2FY25, however, on a Quarterly basis revenue dipped by 51 percent from Rs 217.15 crore in Q1FY25 to Rs 105.95 crore in Q2Y25.
Moreover, net profit fell drastically by 50 percent on a yearly basis from Rs 3.79 crore in Q2FY24 to Rs 1.93 crore in Q2FY25, meanwhile on a quarter-on-quarter basis net profit fell by 83 percent from Rs 12.49 crore in Q1FY25 to Rs 1.93 crore in Q2FY25.
Market Dynamic:-
The company’s revenue declined due to weak rural demand and a slow economy, impacted by extreme heat waves and early monsoon onset, which reduced demand for roofing products. Management anticipates demand recovery in Q3, contingent on stable weather conditions.
Operational Highlights:-
In Q1 FY25, capacity utilization reached 89%, with stable operations at the Perundurai plant. Seasonal fluctuations affect the industry, with Q1 and Q4 generally strong quarters, while Q2 and Q3 experience weaker performance.
Margin guidance:-
Margins have fallen from historical levels of 18%-24% to 10%-12% due to high raw material costs and weak demand limiting price adjustments. Management anticipates no further decline, expecting gradual margin recovery as raw material prices stabilize.
Capex and expansion plan:-
The company’s Wada plant is set to begin operations in Q4 FY26, and the Odisha plant in Q4 FY28. Initial capacity utilization for these plants is projected at 30%-40%, reaching 60%-80% within 3-4 years. Planned capex includes ₹15 crore for operations and ₹35 crore for Wada.
Strategic Initiatives:-
The company is focused on growing market share, especially in western and southern regions, and expanding non-asbestos product sales, which rose to 18% of total sales in Q1 FY25 from 17% in Q1 FY24. While no new domestic markets were entered, export market efforts continued.
Company financial:-
Sahyadri Industries Limited is engaged in providing a range of products for interior and exterior building systems, as well as roofing solutions. The Company is engaged in the production of cement sheets and accessories, trading of steel doors, and in the generation of wind power electricity.
Written by:- Abhishek Singh
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