Shares of Fairchem Organics plunged over 11 percent on November 13, extending losses for 5th straight day. The sharp fall today comes after the specialty Oleo chemicals manufacturer reported a disappointing set of earnings for the quarter ended September 30, 2024.
Fairchem Organics reported a 61% year-on-year (YoY) decline in consolidated net profit to Rs 4.01 crore for Q2FY25, with revenue slipping 9% YoY to Rs 138 crore. The company's EBITDA fell 48% YoY to Rs 8.74 crore, and margins contracted to 6.3% from 11.05% in the prior-year period.
Fairchem Organics, previously Adi Finechem Limited, was acquired by Fairfax India Holdings in 2015, signalling a shift in strategy. The company focuses on refining by-products from oil refining mills, isolating key components used across various industries.
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Fairchem is India’s only producer of Dimer acid, which is crucial in the production of paints, inks, and industrial chemicals. It also processes Tocopherol, a key ingredient in Natural Vitamin E, solidifying its position in both industrial and consumer markets.
On a Sequential basis, Fairchem's net profit dropped 71%, while revenue declined 16%. EBITDA decreased by 60% quarter-on-quarter (QoQ), and margins narrowed too 11.02% from 13.2% in the previous quarter.
At 11:14 am, Finechem Organics shares were trading around 11 percent lower at Rs 876.95 on the National Stock Exchange (NSE). The stock has slumped around 31 percent this year, underperfoming Nifty's 9% gain.
Over the past 12 months, the stock has fallen 25%, while Nifty rose 22% during the same period
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