Sharekhan's research report on Sudarshan Chemical Industries
SCIL continue to show improved financial performance on y-o-y basis. Revenue/OPM at Rs. 601 crore/11.3% rose 3%/down 51 bps y-o-y, in line with our estimates. PAT of Rs. 18 crore was 11% below our estimate. Pigment division grew by 10% y-o-y rise led by growth in domestic revenues to Rs. 272 crore owing to higher volume, while export revenue growth was muted at 3%. Ramping up of new capacity will to drive future growth with improvement in OPM as higher revenue is expected to be generated by higher margin speciality products.
Outlook
Improvement in domestic demand in H2FY24 and ramp-up of new projects would revive growth in FY24. Consolidation in global pigment industry bodes well for long-term earnings growth. We maintain a Buy with an unchanged PT of Rs. 600.
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