Oriental Carbon and Chemicals (OCCL) Q4 24/25 earnings summary

Executive summary

• Q4 FY24 revenue grew 4% year-over-year to Rs. 108 crore; PAT up 15% to Rs. 13 crore despite global chemical sector headwinds and inventory destocking.

• FY24 revenue declined 14% year-over-year due to lower sales prices from reduced input and freight costs, but margins were maintained.

• The company is navigating a challenging global environment with inflation, sluggish demand, and overcapacity, especially in Europe.

• Approval for the demerger scheme was received, expected to unlock value and enhance capital flexibility; Scheme of Arrangement completed, transferring chemical business to OCCL Limited effective July 1, 2024.

• Company reduced long-term debt by Rs. 35 crore in FY24, emphasizing sustainable growth and capital efficiency.

Financial highlights

• Q4 FY24 total income: INR 108 crores, up 4% year-over-year; Q4 FY24 EBITDA: INR 27 crores, up 7% year-over-year; PAT: INR 13 crores, up 15% year-over-year.

• FY24 total income: INR 401 crores, down 14% year-over-year; EBITDA: INR 97 crores, flat year-over-year; PAT: INR 43 crores, down 2% year-over-year.

• Consolidated FY24: Revenue Rs. 468.4 crore (-13%), EBITDA Rs. 108.0 crore (-4%), PAT Rs. 49.6 crore (-7%).

• FY25 total income: Rs. 308.8 crores; Q4 FY25 income: Rs. 108.5 crores, up 12% sequentially; FY25 EBITDA: Rs. 55 crores (margin 17.8%); PAT: Rs. 21.4 crores (margin 6.9%).

• EPS for FY24: Standalone Rs. 42.99, Consolidated Rs. 46.19; FY25 EPS: Rs. 4.29 per share.

Outlook and guidance

• Margin per ton expected to be lower in FY25 due to continued overcapacity and dumping, with a projected 4-5% reduction in margins from last year.

• Management expects global insoluble sulphur market to grow 2-3% near term, with domestic tyre industry projected at 6-7% CAGR.

• Company anticipates improved pricing and demand as market stabilizes, supported by anti-dumping duties and cost optimization.

• Demand-supply imbalance in insoluble sulfur expected to persist for at least two to three years, keeping pricing under pressure.

• Company expects to outperform global demand growth due to higher growth rates in India and untapped geographies.