Sumitomo Chemical India shares were down more than 2 percent in the early trade on August 1, a day after the company reported a dismal set of numbers for the June quarter of FY24, with net profit down 55 percent year-on-year (YoY) at Rs 62 crore.
The agro-chemicals maker reported a 26.57 percent YoY decline in revenue from operations at Rs 724 crore. EBITDA (earnings-before-interest- taxes-depreciation and ammortisation) declined 56.91 percent to Rs 81 crore. The operating profit margins declined 800 basis points YoY to 11 percent.
One basis point is one-hundredth of a percentage point.
In its investor presentation, the company said “delayed and erratic monsoons, delayed sowing, pricing pressure, surplus channel inventory and deferred purchasing decisions by trade partners” had been a drag on earnings.
The demand, however, was intact. “The consumption patterns remain consistent and unaffected, indicating a stable market environment,” it said.
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Apart from a regular capex of Rs 70-75 crore, the company announced an additional capital expenditure of Rs 120 crore for new units at existing facilities.
The agrochemical maker expects the projects to commercialise over the next year and estimates a revenue potential of Rs 200-250 crore per annum from them.
The company intends to use these projects for manufacturing five products to be supplied to its parent company and others.
Sumitomo Chemical India, a subsidiary of the Japanese Sumitomo Chemical Company, is primarily involved in the making and marketing agrochemicals.
The company specialises in the production of herbicides like glyphosate and insecticides like profenophos for crop protection as well as plant growth regulators like progibb.
At 10.36 am, Sumitomo Chemical was trading at Rs 404.45 on the National Stock Exchange, down 2.02 percent from the previous close.
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