Q1 2027 Sudarshan Chemical Industries Ltd Earnings Call Transcript
Key Points
- Sudarshan Chemical Industries Ltd (BOM:506655) reported a robust Q1 FY27 with revenue of INR2,642 crore and business EBITDA of INR247 crore, showing over 60% year-on-year growth in reported EBITDA.
- The company successfully reduced net debt from INR922 crore at acquisition to INR531 crore in less than 18 months, improving the leverage ratio to 0.2.
- The acquired group's EBITDA grew significantly from INR65 crore to INR128 crore, driven by successful value capture and cost reduction initiatives.
- The company has a strong competitive advantage with 55-60% of its assets based in Asia, positioning it well for cost-efficient production and growth.
- Management remains confident in achieving its FY29 guidance of INR12,000 crore-plus revenue and INR1,400-1,500 crore EBITDA, backed by a strong foundation and integration progress.
- The company faces challenges from the Middle East crisis, including energy cost spikes, increased raw material costs, and longer logistics cycles, which have led to customer delays in purchasing.
- Underlying volume growth appears subdued, with some analysts noting a potential decline when adjusting for currency depreciation and price increases due to raw material inflation.
- The RIECO business experienced execution challenges in Q1 due to customer-side delays and subcontractor labor issues, leading to a drop in revenue and EBITDA.
- Management has not revised its FY27 guidance despite a strong Q1, citing geopolitical uncertainties and adopting a 'wait and watch' approach.
- An employee restructuring program in a wholly-owned subsidiary has been signed, but the financial impact has not yet been quantified, creating potential near-term uncertainty.
Yeah, good morning everyone. We already have 80 participants. Do let us know when to begin the call.
Ranjit, we have got the notification that we can begin around a minute or two from now once we have 100 participants. So, Nirmal-jii, we can start.
Thank you. Ladies and gentlemen, good day and welcome to Sudarshan Chemical Industries Limited earnings call for Q1 FY27 financial results. (Operator Instructions) Please note that this conference is being recorded. With that, I hand over the call to Mr. Ranjit Cirumalla from IIFL Capital. Thank you and over to you.
Thank you, Nirmal. Good morning, everyone. Ranjit Cirumalla here from IIFL Capital. We are pleased to host the conference call with the management of Sudarshan Chemical Industries Limited to discuss earnings performance
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