Shares of Sharda Cropchem surged over 9 percent to hit a 3-month high of Rs 394 apiece on May 13 after the Street cheered the pesticides maker's better-than-expected January-March quarter (Q4FY24) performance.
Sharda Cropchem's profit-after-tax (PAT) slipped 28 percent YoY to Rs 143 crore in Q4FY24 as against Rs 198 crore in Q4FY23, beating Street estimates of Rs 63 crore. The company's revenue from operations declined by 11 percent YoY to Rs 1,312 crore in Q4FY24 from Rs 1,481 crore in the year-ago period.
Going ahead, the management expects global crop protection chemicals' market value to grow at 3.5 percent compounded annual growth rate (CAGR) to $62.8 billion by 2025 and $77 billion by 2030.
Follow our live blog for all the market action
"A growing middle-class population will fuel demand for increased food and protein production, which in turn would drive demand for grain to support growth. We will accelerate our focus on revenue generating investments, margin improvements, and better cost management," the management said in their investor presentation.
That apart, Sharda Cropchem's earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped by 3 percent YoY to Rs 302 crore in the March-ended quarter, whereas EBITDA margin contracted sharply by 210 basis points (bps) YoY to 23.1 percent.
ALSO READ: Chemical stocks to face near-term pressure on demand slowdown but capex to aid future growth
The de-growth in revenue comes on the back of lower product price realisations across all regions. This has led to stock re-valuation as per accounting policy and has impacted the profitability to the tune of Rs 91 crore, said the management.
The board recommended a final dividend of Rs 3 per equity share, subject to shareholders' approval.
So far this year, the stock of this pesticide producer dropped over 14 percent, underperforming 2 percent rise in the benchmark Nifty 50 index.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
