This Chemical stock which deals in the manufactures and sells a wide range of Organic and Inorganic Pigments, Effect Pigments down 6 percent after the net profit down 98 percent quarter on quarter.
Price Action
With a market capitalization of Rs. 6,875.13 Crores, the shares of Sudarshan Chemical Industries Limited were down by 5.8 percent in the day’s trade touching a day’s low of Rs. 858.95 per share. The stock reiterated from the day’s low and was trading at Rs. 875 per share which is down 4.08 percent which is lower from the previous closing price of Rs. 912.20 apiece.
Q3FY25 Financial Performance
The company’s stock declined after reporting financial reports for the month of December 2024, Sudarshan Chemical Industries consolidated revenue from operations has increased by 17.79 percent year on year from Rs. 565.75 crores in Q3FY24 to Rs. 666.42 crores in Q3FY25 and decreased by 4.26 percent quarter on quarter from Rs. 696.09 crores in Q2FY25.
The company’s consolidated net profit stood at Rs. 0.51 crores in Q3FY25, a decline of 96.50 percent from Rs. 14.59 crores in Q3FY24. As compared to Q3FY25, the company’s net profit stood at Rs. 29.90 crore in Q2FY25, a 98.29 percent decline.
The reduction in net profit was due to an exceptional item which included the Holding company selling its freehold land and the other reason included Sudarshan Europe B.V., a wholly owned subsidiary of Sudarshan Chemical Industries had approved the acquisition of global pigment business operations of Heubach Group through an Asset and share deal. The exceptional item value for the quarter stood at Rs. 30.82 crore.
The operating margin in Q3FY25 was 11.85 percent which saw an increase from 10.90 percent year on year. The debt-to-equity ratio increased from 0.43 times to 0.47 times in this quarter.
Management Commentary
Commenting on Q3FY25 results, the MD of Sudarshan Chemical Industries, Rajesh Rathi said “Sudarshan Chemical’s strong Q3FY25 results are a result of our consistent focus on delivering value to our stakeholders. We are progressing well on closing the transaction for acquisition and our initial integration process with Heubach is also progressing well. The steady growth in our EBITDA and profitability is a result of our commitment to operational excellence and strategic expansion, and we remain confident about sustaining the overall momentum ahead.”
Business Segments
As of December 2024, the company’s revenue from operations is 90.18 percent from Pigments and 9.81 percent from Others. Operating profits from Pigments contribute a major part, growing by 22.73 percent year over year. However, the Others segment continued to make losses for this quarter.
Recent Fund Raise
Recently, the company has raised funds through QIP (Qualified Institutional Placements) worth Rs. 799.99 crore with a price of Rs. 1,070 per share which includes investors with 5 percent and higher stakes such as Tata Mutual Fund, DSP Small cap, Abakkus Diversified Alpha Fund – 2.
About the Company
Sudarshan Chemical Industries Limited, founded in 1951 and headquartered in Pune, India, is a prominent global manufacturer of pigments and dyes. They specialize in organic and inorganic pigments, pigment dispersions, and effect pigments for industries such as plastics, coatings, printing, textiles, and cosmetics.
Products and Services
They specialize in manufacturing a wide range of organic and inorganic pigments, including effect pigments and pigment dispersions. Their products serve various industries, such as cosmetics, printing, coatings, plastics, and textiles.
Written by Santhosh S
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