Sudarshan Chemical Industries LimitedChemicalsSUDARSCHEM
Q1 FY27 concall · earnings callSudarshan Chemical Industries Limited
A strong Q1 driven by integration benefits, cost reduction initiatives, and a significant improvement in the acquired group's EBITDA provides a solid foundation for growth, despite navigating a challenging geopolitical environment.
Numbers
| Metric | This quarter | Change | Five-quarter trend |
|---|---|---|---|
| Revenue from Operations | ₹2,642 Cr | 5% | |
| Reported EBITDA (One Sudarshan) | ₹266 Cr | 60%+ | |
| Business EBITDA (One Sudarshan) | ₹247 Cr | — | |
| Reported EBITDA (Acquired Group) | ₹146 Cr | — | |
| Business EBITDA (Acquired Group) | ₹128 Cr | — | |
| Net Debt | ₹531 Cr | -60% from peak | |
| Earnings Per Share (Q1, not annualized) | Rs.12.3 per share | — | |
| Return on Capital Employed (Annualized) | 22.7% | — |
Financials
From filed quarterly results. YoY and QoQ compare each metric on the same accounting basis.
| Quarter | Revenue | Net profit (PAT) | Basic EPS |
|---|---|---|---|
| Q3 FY25 | ₹666.43 Cr+17.8% YoY-4.3% QoQ | ₹0.51 Cr-96.5% YoY-98.3% QoQ | ₹0.10-95.2% YoY-97.7% QoQ |
| Q2 FY25 | ₹696.09 Cr+15.9% YoY+9.9% QoQ | ₹29.90 Cr+67.4% YoY+1.6% QoQ | ₹4.30+65.4% YoY0% QoQ |
| Q1 FY25 | ₹633.62 Cr+4.2% YoY-17.1% QoQ | ₹29.43 Cr-89% YoY-49.3% QoQ | ₹4.30-88.9% YoY-48.8% QoQ |
| Q4 FY24 | ₹764.24 Cr+10.6% YoY+35.1% QoQ | ₹58.03 Cr+78.2% YoY+297.7% QoQ | ₹8.40+78.7% YoY+300% QoQ |
| Q3 FY24 | ₹565.75 Cr+7.1% YoY-5.8% QoQ | ₹14.59 Cr+2415.5% YoY-18.3% QoQ | ₹2.10+2000% YoY-19.2% QoQ |
TL;DR
- Legacy Sudarshan sales grew, with a target of 12-13% growth; acquired group grew by 5% despite geopolitical issues.
- Business EBITDA for the acquired group grew from Rs.65 Cr to Rs.128 Cr, driving overall pigment business EBITDA to Rs.275 Cr.
- Net debt reduced by 60% from its peak to Rs.531 Cr.
- Value capture and cost reduction are key ongoing priorities for profitability growth.
- Guidance for the acquired group is EUR 700 million turnover and EUR 35 million EBITDA, not revised despite strong Q1.
- RIECO business faced challenges, leading to a drop in revenue and EBITDA, but recovery is expected.
Said on the call
“What we aspire to be is really seven times of what our EBITDA was in 2023 and also reach a debt-free level and that is our aspiration going forward.”
From the Q&A
| Topic | What management said |
|---|---|
| Underlying Volume & Growth Confidence | Management stated that volume decline inference may not be accurate and highlighted 6% growth despite geopolitical issues. Confidence in future growth stems from recovering lost business and ongoing value capture initiatives. |
| Source of Future EBITDA Growth | Substantial future EBITDA improvement (from Rs.800 Cr to Rs.1400-1500 Cr) is expected to come from cost reduction/value capture, not just revenue growth. |
| Capex Plans | No new capacity capex is needed for volume growth targets; any special projects (e.g., backward integration) will be ROI-driven, leading to only moderate capex. |
| Gross Margin Sustainability | Gross margin moved up about 2% due to cost reductions, with minor one-offs; company expects to continue in the range of 50% plus. |
| Guidance Revision | Despite a strong Q1, guidance is not being revised due to the geopolitical situation; management will revisit after Q2. |
| Pricing Strategy | Recent price increases were only to pass on input cost inflation; if raw material costs soften, pricing will be reversed to maintain customer trust. |
| Employee Restructuring Charge | A restructuring program has been signed, but the charge is unquantified; more clarity is expected by Q2 end. |
| RIECO Business | Q1 was tough due to execution delays and labor issues; transformation continues with an expectation of positive numbers by year-end. |
Guidance
- Turnover guidance for the acquired group is EUR 700 million and EBITDA of EUR 35 million for the financial year.
- Not revising guidance currently due to geopolitical situation; will revisit after Q2.
- Aspiration to reach a debt-free level.
- Major portion of value capture expected in FY2027-FY2028.
Source
Summary written from the transcript filed by Sudarshan Chemical Industries Limited for the call held on 14 Aug 2026; published 20 Aug 2026, 17:34 IST.
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