Rain Industries (RAIN) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue was INR 40.94 billion, with adjusted EBITDA at INR 4.9 billion, but a consolidated net loss of INR 448.66 million was reported; interim dividend of INR 1 per share declared.

• Advanced Materials segment saw higher volumes and improved earnings, while the Carbon segment benefited from shipment advancements and margin recovery, though still below historical averages.

• Cement segment performance declined due to lower realizations, volumes, and higher operating costs, impacted by a slowdown in Indian construction during elections.

• Board approved unaudited standalone and consolidated financial results for Q2 and H1 2024, with an unqualified review report from auditors.

• Management continues to monitor geopolitical and market risks, including the Russia-Ukraine conflict, but does not foresee significant direct impact.

Financial highlights

• Consolidated Q2 2024 revenue was INR 40.94 billion, down from INR 46.27 billion in Q2 2023, mainly due to declines in the carbon and cement segments, partially offset by growth in advanced materials.

• Adjusted EBITDA for Q2 2024 was INR 4.9 billion, with a margin of 12.0%, down from 14.6% in Q2 2023.

• Consolidated net loss for Q2 2024 was INR 448.66 million, compared to a net profit of INR 2,065.43 million in Q2 2023.

• Net debt at quarter-end was US$747 million, with liquidity at US$432 million, including US$206 million in cash and US$226 million in undrawn credit facilities.

• Capital expenditure for H1 2024 was US$35 million; net cash used in financing activities in H1 2024 was INR 9,487.24 million.

Outlook and guidance

• Margin pressure in the carbon segment is expected to persist in H2 2024, with improvement anticipated from H1 2025.

• Advanced materials segment margins are expected to remain stable, and cement demand is projected to rise due to increased infrastructure spending in India.

• Cost reduction strategies and efficiency plans, including severance provisions in Germany, are being implemented across all regions.

• Regulatory relief on pet coke import restrictions has been partially implemented, with further permissions expected in H2 2024.

• Management continues to monitor geopolitical risks but does not foresee significant impact on consolidated results.