Asahi Songwon Colors plunges over 2% on lackluster Q1FY22 earnings

Revenue from Operations was Rs96.96cr during the quarter under review, a sequential growth of 7.16%: yoy of 67.69%.

Aug 06, 2021 12:08 IST India Infoline News Service

Asahi Songwon Colors Limited, India’s leading manufacturer of pigments for ink, plastics, paint, textile and the paper industry has announced its financial results for the first quarter ended June 30, 2021.

Standalone Financial Highlights for Quarter Ended June 30, 2021:
  • Revenue from Operations was Rs96.87cr during the quarter under review, a sequential growth of 7.23% yoy of 67.54%.
  • Company reported an EBITDA of Rs12.07cr during the quarter under review a sequential decline of 9.00% yoy growth of 9.63%.
  • EBITDA Margin stood at 12.47% for Q1FY22 as compared to 14.65% in Q1FY21 and 19.05% in Q4FY21.
  • Net Profit stood at Rs6.82cr during the quarter under review, a sequential decline of 28.44% yoy of 4%.
Consolidated Financial Highlights for Quarter Ended June 30th, 2021:
  • Revenue from Operations was Rs96.96cr during the quarter under review, a sequential growth of 7.16% yoy of 67.69%.
  • Company reported an EBITDA of Rs10.32cr during the quarter under review a sequential decline of 16.71% yoy of 6.27%.
  • EBITDA Margin stood at 10.64% for Q1FY22 as compared to 13.70% in Q1FY21 and 19.05% in Q4FY21.
  • Net Profit stood at Rs4.56cr during the quarter under review, a sequential decline of 25.85% yoy of 52.15%.
Commenting on the Q1 performance Gokul M. Jaykrishna, Joint Managing Director & CEO, said “At ASCL, we strongly believe that testing times brings out the best in organisations and we witnessed the adage come true for us. Just when the world was dealing with the first wave, the second wave of the pandemic wreaked greater havoc, once again bringing the world to a standstill.

While the financial year again began on a note of anxiety, it was also a quarter when our strengths came to the fore. I would like to take this opportunity andcredit all the people at our plants and head office for their tireless efforts in these trying times. Despite the odds stacked against us, I am proud of the way the entire team came together, reacted swiftly to the challenges and managed to achieve highest ever quarterly turnover.

We continue to be optimistic and anticipate that the economic situation will improve further in the times ahead as a result of decrease in the spread of the COVID-19 virus and increasing rate of vaccination.”

Arjun G. Jaykrishna, Executive Director, commented, “We are well on our way to becoming one of the largest pigment players by enhancing our product basket to offer a full suite of colour range in organic pigments. I am satisfied with the overall financial performance of the business. While the company recorded its highest quarterly revenue ever, EBITDA margins contracted due to increased input prices. Input costs have begun to decline, and we anticipate EBITDA margins to revert to higher levels going forward.

The Company is now at an inflexion point where the investments in the Azo segment to the tune of Rs 82cr. will start playing out over the medium to longer term. We have started production of Azo pigments at Dahej and have received very good initial response to the sampling. The Indian Azo pigments market is a sea of opportunities, and we are confident of leveraging our strengths to make the most of them.

We remain confident that by the end of 2021, we would hit 40% utilization levels on month-to-month basis and as soon as we reach 50%, we would want to double the capacity to 4,800 tonnes”

At around 12:35 PM, Asahi Songwon Colors was trading at Rs367 per piece down by Rs9 or 2.39% on Sensex.

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