IG Petrochemicals Ltd (IGPL) reported strong margin performance on the back of favourable PAN/OX spread during the quarter. Revenue de-grew by 9.1% YoY to INR 2424mn (est INR 2621mn) mainly impacted by lower realization due to soft crude oil prices. However, demand is fully recovered in Paints and Plasticizers to pre-COVID levels. EBITDA surged by 191.5% YoY to INR 418mn (est INR 235mn) with 1186bps YoY expansion in margin from 5.4% in Q2FY20 to 17.2% in Q2FY21 (est. 9%). This was mainly due to 1134bps expansion in gross margin (33.4% vs 22.4% in Q2FY20) on account of improvement in PAN/OX spread. Currently, PAN/OX average (avg) spread is around $200 (vs avg $150 in Q1FY21) compared to 10-year avg of $200 vs $100 in FY20. We believe spreads can continue to remain favourable in the near term on the back of healthy demand in the Paint and Plasticizer...
driven by positive operating leverage. During the quarter the company incurred one-time expenses of BSE code INR 90mn (onetime bonus and ESOPs of INR 52.1mn and INR 38.3mn related to discontinuation of Alivira France operations) under Exceptional item. SSL reported a PAT of INR 213mn compared to our estimate of INR 250mn. Adjusting onetime expenses, the Normalised PAT came in at INR297mn...
INR3,368mn mainly driven by strong growth in the Pharmaceutical segment. On segmental performance: The crop protection segment de grew by 17.9% (YoY) to INR 926mn and 12.7% (YoY) due to deferment of orders worth INR400mn which is expected to be supplied largely in Q3FY21. Pharmaceutical segment revenue surged by 34.1% to INR 2,793mn led by strong volume off-take supported by new capacity at Bangalore unit which was commissioned late last year. Despite 554bps contraction in gross margin, EBITDA margin managed to improve by 58bps to18.8%, was 29bps above our estimate. EBITDA margin was supported by 11% (YoY) decline in employee cost and flat other expenses in the growing topline. EBIT margin of the Crop protection segment declined by 1044bps...
Neuland lab (NLL) has posted revenue of INR2,414mn with a 29.6% YoY increase, which was 12% below our estimate of INR 2,160mn. The revenue growth was mainly driven by strong traction in the CMS (54.6% YoY growth) segment, led by 33 molecules (Development + Commercialize) along with...
IG Petrochemicals Ltd (IGPL) reported better margin performance on the back of favourable PAN/OX spread during the quarter. Revenue de-grew by 42.7% YoY to INR 1,421mn (est INR 1,898mn) mainly impacted by production loss of 32 days led by nationwide lockdown due to COVID 19. However, demand is gradually recovering in Paints and Plasticizers to reach pre-COVID levels. EBITDA declined by 35.5% YoY to INR 157mn (est INR 155mn) with 124bps YoY improvement in margin from 9.8% in Q1FY20 to 11% in Q1FY21 (est. 8.2%). This was mainly due to 585bps expansion in gross margin (33.9% vs 28% in Q1FY20) on account of improvement in PAN/OX spread. Currently, PAN/ OX average (avg) spread is around $150 compared to 10-year avg of $200 vs $60-$100 in FY20. Under exceptional items, the company recorded expenses related to impairment in the value of the investment in subsidiary INR 6.16mn as the project was abandoned since viability was not established during the appraisal of the Project (The Subsidiary was liquidated on 12th Apr, 2020). Net profit...
SH Kelkar & Co Ltd (SHK) posted revenues of INR1,925mn with 29.8% YoY decline, which was 24.6% below our estimate of INR2,555mn. Revenue growth was mainly impacted by ~28%/47% decline in the Fragrance and flavour segment respectively due to demand and production side disruption led by COVID 19 in both domestic as well as in the overseas market. However, as per management demand has started picking up with strong traction from end-May'20. EBITDA margin declined by 82bps was 136bps higher than our estimate mainly driven by softer raw material prices (Gross Margin was up 73bps YoY to 43.9%) and cost optimisation measures. Absolute EBITDA came 17.6% below our estimate due to weak revenue. PAT came in line with our estimate at INR149mn (est: profit of INR152mn) supported by higher Other income (196% YoY) and lower tax rate (21.7% vs 33.7% in...
low our estimate of INR 2,149mn. The revenue growth was mainly driven by the CMS (25.4% YoY growth) segment, led by 32 molecules (Development + Commercialize) with speciality API segment, which grew by 33.2% in Q1FY21. EBITDA margin expanded by 622bps to 16.5% level, which was 219bps higher than our estimate driven by 580bps improvement in gross margin led by improved product mix. Management is confident to improve margin profile from current level on the back of strong order book in CMS business, better traction in GDS business and cost optimization measures....
GMM Pfaudler Ltd (GMM), for Q1FY21, reported a weak set of numbers. Revenue marginally grew by 2.8% YoY to INR 1544mn (est INR 1721mn) mainly due to fewer production days (two months) led by the extended lockdown. However, Q1FY21 revenue includes execution of a deferred order of Q4FY20 worth INR 150mn-200mn.EBITDA remained flat at INR275mn (est INR342mn) with 55ps YoY decline in margin from 18.4% in Q1FY20 to 17.8% in Q1FY21, due to adverse product mix mainly impacted by proprietary business, where EBIT margin declined by 755bps on YoY basis with 23% contribution in consolidated revenue. However, the Heavy engineering business has reported a strong growth of 565% in revenue along with 21.3% EBIT margin (vs 2.8%YoY) in Q1FY21. This, we believe partly led...
Granules (GIL) posted revenues of INR 7,356mn with 23.6% YoY growth, which was ~6% above our estimate of INR 6929mn. Revenue growth was mainly driven by new product launches and an increase in market share of existing products. Gross margin improved (918bps YoY) due to higher formulation sales (52% of revenue vs 48% in Q1FY20). Subsequently, EBITDA margin expanded by 503bps to 25% level was 475bps higher than our estimate. EBITDA was partially impacted by one-off INR 280mn related to metformin recall (INR150mn) and COVID-19 related expenses (INR130mn). As per management EBITDA margin can be sustainable (~23% for FY21) as continued traction in the formulation business. GIL reported PAT of INR 1114mn, was above our estimate of INR 744mn driven by strong operational performance and lower tax rate (25.3% vs 32% in Q1FY20). Management expects to achieve 30% PAT growth in FY21 compared previous year and 25% for FY22 given the strong traction in base business along with new product launches in the US generics business. Post...
