In Wednesday’s trading session, the shares of the third largest pigment producer globally surged 6.08 percent to Rs. 1,070 on BSE, following reports that the company is planning to acquire its German competitor, Heubach GmbH.
With a market cap of Rs. 7,323.55 crores, at 11:31 a.m., the shares of Sudarshan Chemical Industries Limited were trading in the green at Rs. 1,057.9, up by nearly 5 percent, compared to its previous closing price of Rs. 1,008.6.
What’s the news:
Sudarshan Chemical Industries Limited is reportedly planning to acquire its German rival, Heubach GmbH. According to CNBC, Sudarshan may have already submitted a bid to the insolvency administrator handling Heubach GmbH’s case.
On 23rd April 2024, Heubach GmbH, the world’s second-largest pigment producer, filed for insolvency in Germany due to high debt concerns.
Heubach Colorants India Limited, a listed small-cap company and a subsidiary of Heubach GmbH, is engaged in the business of manufacturing and selling specialty chemicals.
Following the reports of the potential acquisition, shares of Heubach Colorants fell by 3.7 percent on the BSE, reaching an intraday low of Rs. 569.55 on Wednesday.
Additionally, CNBC reported that the potential acquisition might lead to an open offer for Heubach Colorants as a result of the change in ownership at the parent company.
Financials:
The company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 4.3 percent from Rs. 608 crores in Q1 FY24 to Rs. 634 crores in Q1 FY25.
However, its net profit decreased during the same period from Rs. 267 crores to Rs. 29 crores, indicating a decline of nearly 89.2 percent YoY.
In FY25, the focus of Sudarshan Chemical will shift towards a higher share specialty segment resulting in deeper customer engagement as well as improving Return on Capital Employed (RoCE).
The company is continuing to expand its product portfolio to build a globally competitive and comprehensive range.
Stock Performance
The shares of Sudarshan Chemical Industries have delivered multibagger returns of nearly 104.3 percent in one year and around 78.8 percent returns in the last six months. So far in 2024, the stock has given about 90 percent of positive returns.
About the company:
Incorporated in 1951, Sudarshan Chemical Industries Limited is engaged in the business of manufacturing and selling a wide range of organic, inorganic, and effect pigments.
Written by Shivani Singh
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