One of the leading Chemical stocks gained an intraday high of 5.5 percent to Rs 628 per share after the company signed two MoUs worth Rs 3,450 crore in Gujarat during the Vibrant Gujarat Summit.
At 2:25 p.m, GHCL Ltd shares were trading at Rs 610.65 per share, up Rs 14.95 or 2.51 percent on the National Stock Exchange. The company has a market capitalization of Rs 5,845 crore.
Gujarat Heavy Chemicals Limited(GHCL) Limited signed two Memorandum of Understanding (MOUs), at the Vibrant Gujarat Summit, for investing Rs 3,450 Crores in Gujarat.
The first MOU was signed for an investment of Rs 2,500 Crores in the Kutch district of Gujarat for a second phase expansion of the Greenfield Soda Ash plant and setting up a Vacuum salt plant.
The investment in the above project will be spread over four years and to provide direct and indirect employment to more than 10,000 people.
The second MOU was signed for Rs 950 Crore investment in Bhavnagar, towards the mining of Bentonite and Sand. The company said in its exchange filing.
Bentonite will be marketed to various industries to be mainly used as a raw material for fertilizers, foundries, cosmetics, and pharma industries to name a few. Sand is utilized as a raw material in construction industries.
The company’s revenues have decreased by 42 percent year on year from Rs 1,381 crore in Q2FY23 to Rs 805 crore in Q2FY24, while net profit has fallen by 52 percent from Rs 293 crore to Rs 143 crore.
The company’s revenue has decreased based on the global softness of prices in commodity products resulting in increased imports into India impacting realization and some softness in sales.
While, the absolute EBITDA margin declined by 46% on a Y-o-Y basis impacted by lower realization and volume though partially set off by receding input costs.
GHCL shares have gained 18 percent in the last six months and 13 percent in a year.
The company is engaged in the business of chemicals, yarn, and commodity products. In Chemicals, the Company mainly manufactures Soda Ash which is a major raw material for detergents & glass industries, and Sodium Bicarbonate.
Written by Omkar Chitnis
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