In Friday’s trading session, the shares of one of the leading chemicals stocks specialized in a diverse range of industries, jumps upto 6 percent following the approval for the demerger of its Agricultural Solutions business into a separate listed entity.
Price action
With a market capitalization of Rs 24,615.89 Crores on Friday, the shares of BASF India Ltd were trading at Rs 5,686.85 per share, increasing around 4.15 percent making a high of Rs 5,950 compared to its previous closing price of Rs 5,460.45.
What happened
BASF India Limited has received in-principle approval from its Board of Directors for the demerger of its Agricultural Solutions business into a separate listed entity. This decision follows the company’s alignment with BASF SE’s global strategy for its Agricultural Solutions division.
The company’s demerger aims to provide operational flexibility, leverage differentiated steering, and unlock value and the Agricultural Solutions business contributed 14.57 percent which is Rs. 2.06 crores to the company’s total revenues for the financial year ending March 31, 2024.
An Independent Committee has been formed to evaluate and guide the demerger process, with further disclosures to be made in accordance with regulatory requirements.
About the company
BASF India Limited is one of the leading chemical stocks specializing in a diverse range of industries, including agricultural solutions, performance materials, and chemicals.
The company is particularly recognized for its expertise in providing crop protection products, seeds, and innovative agricultural solutions aimed at improving productivity and sustainability in farming.
BASF India with a strong commitment to research and development specializes in advanced materials for automotive, construction, and industrial applications, offering high-performance coatings, plastics, and other specialty chemicals.
Segment Revenue
The company’s revenue is distributed across several key segments. The Agricultural Solutions segment contributes 1,406 crores (17%), the Materials segment generates 2,572 crores (31%), Industrial Solutions segment brings in 1,305 crores (16%), the Surface Technologies segment adds 334 crore (4%), Nutrition & Care segment contributes 1,493 crore (18%), followed by the Chemicals segment with 1,051 crore (13%) and remaining 54 crore (1%) comes from other business segments.
Recent Developments
The company has launched a new Polyurethane Technical Development Center in Mumbai, equipped with state-of-the-art application equipment and also a Performance Materials plant in Panoli, Gujarat and Thane. Additionally, in Maharashtra, the company has initiated expansion projects to increase its polyamide compounding production capacity.
Financials
The company’s revenue rose by 14.5 percent from Rs 3,707 crore to Rs 4,248 crore in Q2FY25. Meanwhile, Net profit declined from Rs 149 crores to Rs 128 crore during the same period.
Key Financial ratios
BASF India Limited has an impressive Return on Equity (RoE) of 18.53 percent and a Return on Capital Employed (RoCE) of 24.06 percent. Furthermore, the company’s debt-to-equity ratio is 0.05.
Written by Sridhar J
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