Anand Rathi's research report on Sudarshan Chemical Industries
Sudarshan Chemicals reported Q1 FY26 Rs25.1bn consolidated revenue (y/y, q/q not comparable), with Heubach contributing Rs18.8bn and the pigment business Rs5.8bn (down 2% y/y). Adj. EBITDA was Rs1.65bn, split between Heubach’s Rs780m (a 4.1% margin) and the pigment business’ Rs872m (down 3%y/y, a 15.1% margin). The quarter marked a volume decline for the legacy franchise, impacted by customer inventory de-stocking, though management guided to 8-10% domestic pigments’ growth in FY26 as demand normalizes. Heubach’s integration is going well, with early cost rationalisation delivering positive EBITDA, and management reiterated €35m EBITDA guidance in FY26 scaling up to €90m-100m (a 9-10% margin) by FY28/29 as synergies are captured.
Outlook
We are constructive on the combined platform and retain our Buy recommendation with a sum-of-parts target price of Rs1,700 implying 12.4x Sep’27e EV/EBITDA.
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