So Q3 results are out and they don’t look great. PAT, EBIDTA and Revenue all slumped considerably QoQ. Net profit is down 29% to Rs 92 crore on 10.16% decline in revenue from operations to Rs 1,152.63 crore in Q3 FY23 over Q3 FY22. Even YOY, overall revenue is 10% lower, mainly on account of lower sales performance of nutrition & health solution business.
The Good:
- Revenue from specialty chemicals grew by 34% YoY to Rs 468 crore and absolute EBIDTA grew by 15%, driven by higher price realization and volume growth across product segments. Share of revenue to customers having agro chemical end use has shown significant growth
- The company has further improved its market share and volumes of Acetic Anhydride in EU region on YoY.
- Committed to ongoing Growth Capex plan, which is now improved from earlier Rs 2,050 crore to now Rs 2,275 crore during FY22 to FY25 Period.
The Bad
- Revenue from nutrition business de-grew YoY by 39% to Rs 132 crore in Q3 FY23, on account of lower demand, due to prolonged impact of bird and swine flu in EU and US regions, leading to lower realization
- Revenue from chemical intermediates de-grew by 23% on YoY to Rs 559 crore in Q3 FY23, mainly driven by lower price of feed stock (ie Acetic Acid) leading to lower realization of finished products i.e. Acetic Anhydride & Ethyl Acetate
Commentary
- The demand related challenges of Vitamin B3 are short-term and we continue to remain focused towards improving our presence in food and cosmetics segment. In chemical intermediates business the revenue on YoY basis is impacted due to lower prices of feed stock (Acetic Acid), leading to lower sales prices of Acetic Anhydride and Ethyl Acetate.
- The company has firm plans to significantly reduce overall energy cost in phased manner through various initiatives by sourcing power from Grid and renewable sources, optimizing coal consumption through efficiency improvement in consumption as well as in generation
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