Sudarshan Chemical Industries (506655) Q3 24/25 earnings summary

Executive summary

• Consolidated Q3 FY25 revenue grew 18% year-over-year to INR 666 crore, with EBITDA up to INR 94 crore and margin at 11.9%.

• Nine-month FY25 revenue rose 12% to INR 1,996 crore, with EBITDA at INR 254 crore and margin at 12.7%.

• Pigment business achieved its eighth consecutive quarter of year-on-year sales growth, now the third largest globally with a 33% domestic market share.

• Export sales and specialty pigment revenues showed robust year-over-year growth, with exports comprising 53% of pigment sales for the nine months.

• Unaudited standalone and consolidated financial results for the quarter and nine months ended 31 December 2024 were approved, with no audit modifications noted.

Financial highlights

• Q3 pigment business revenue up 15% year-over-year to INR 601 crore; export sales up 29% to INR 315 crore.

• Specialty pigment sales grew 16% year-over-year; non-specialty up 14%.

• Gross margin in pigment business improved to 46.8% for 9M FY25, driven by specialty pigment growth.

• Q3 FY25 consolidated net profit was ₹51.4 lakhs, down from ₹1,459.2 lakhs in Q3 FY24, impacted by exceptional items.

• RIECO revenue up 44% year-over-year to INR 65 crore; EBITDA at breakeven from a loss of INR 7 crore.

Outlook and guidance

• Management expects continued growth from new product ramp-up and CapEx projects, with full utilization targeted in 3-4 years.

• Strong growth expected from coatings, inks, plastics, and cosmetics segments, leveraging global pigment market opportunities estimated at $8.6B.

• No major CapEx planned for FY26; new budgets to be presented post-acquisition integration.

• RIECO transformation expected to deliver sustainable EBITDA of 10%+ within 18-24 months.

• The company is progressing with the acquisition of Heubach Group’s global pigment business for €127.5 million, with funding plans in place and regulatory approvals pending.