Sudarshan Chemical Industries: On May 24, Sudarshan Chemical Industries witnessed a remarkable intraday surge of over 14 percent following the release of its strong sequential growth for the quarter ended March. The dye manufacturer reported a significant 30 percent rise in revenue, amounting to Rs 692 crore, driven by robust growth in the pigment exports market and a revival in demand. In comparison to the same quarter of the previous year, the company’s revenue experienced a growth of 10 percent.
The company’s operational performance improved sequentially as the revenue surge outpaced the increase in expenditure. Although the EBITDA margin declined by 140 basis points on a year-on-year basis, it expanded by an impressive 450 basis points sequentially to 12.3 percent in the January-March period.
With the strong operational and revenue performance, Sudarshan Chemical Industries witnessed a nearly twofold increase in net profit, reaching Rs 33 crore in Q4, compared to Rs 45 crore in the corresponding quarter of the previous fiscal year.
As of 12:49 pm, shares of Sudarshan Chemical Industries were trading with gains of 13.25 percent at Rs 445.40 on the National Stock Exchange. The trading volume also witnessed a significant surge, with 31 lakh shares of the company being traded, surpassing the one-month daily traded average of 68,000 shares.
ICICI Securities, a brokerage firm, maintains a positive outlook on Sudarshan Chemical Industries. The firm was pleasantly surprised by the strong growth in export markets and anticipated an improvement in the domestic market due to the revival of demand. The brokerage firm is also looking forward to more clarity from the company’s management regarding the margin front, which, despite its improvement, still has room for further enhancement.
Looking ahead, Sudarshan Chemical Industries expects a gradual sales ramp-up from new capital expenditure projects, which will drive growth in the coming quarters. Additionally, the company is focusing on expanding its product portfolio while prioritizing the control of net working capital and inventories to optimize the cash conversion cycle.
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