Himadri Speciality Chemical Ltd's standalone revenue for the quarter came in at Rs604.73cr, up by 33.7% yoy. The operating profit for the quarter increased by 36% yoy to Rs135.76cr. However, the EBITDA margin increased marginally by ~38bps yoy to 22.5% in Q1FY19. The adjusted net profit after tax stood at Rs76.66cr, up by 53.2% yoy. The revenue and EBITDA beat the street estimates of Rs557cr and Rs127cr by 9% and 7%. However, the PAT missed the street estimate of Rs87cr by 12%.
• The significant rise in revenue is a combination of increase in volumes, improved product mix and improvement in realizations. The gross margin of the company for the quarter improved substantially by ~395bps yoy to 46.6% in Q1FY19.
• The EBITDA margin witnessed a marginal expansion of ~38bps despite higher volumes, on account of lower operating leverage. This is due to significant rise in employee benefits expenses and other expenses by 38.5% and 120.3% yoy to Rs13.63cr and Rs48.13cr respectively in Q1FY19. The other expenses include a forex loss of Rs4.68cr for the quarter as against forex loss of Rs0.55cr in Q1FY18. This led to lower than expected expansion in EBITDA margin and net profit.
• Other income stood at Rs2.73cr in Q1FY19 vs. Rs1.18cr in Q1FY18, leading to higher net profit.
• The finance cost remained stable yoy at Rs18.74cr during the quarter.
• The effective tax rate of the company for the quarter stood at 31.5% vs. 32.9% in Q1FY18. This contributed towards higher net profit of the company.
• The board of directors have considered and approved a draft scheme of amalgamation between the company and its wholly owned subsidiary, Equal Commodeal Private Limited. The company is in process to initiate filing of the scheme to concerned authorities.
Himadri Speciality Chemical Ltd is currently trading at Rs. 138.75, down by 2.25 points or 1.6% from its previous closing of Rs. 141 on the BSE.
The scrip opened at Rs. 139.95 and has touched a high and low of Rs. 140.85 and Rs. 136.20 respectively. So far 4,66,354 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.
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