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Motilal Oswal Report
Against the guided Ebitda/kg of Rs 16-18, Galaxy Surfactants Ltd. reported an Ebitda/kg of Rs 26.8 (61% higher than our estimate, up 48% YoY).
The current supply chain disruption has boosted demand, which is sold at a premium and aided the higher-than-usual margin in the past two quarters. Total volumes declined by 4% QoQ and 8% YoY to 55.3 thousand million tonne (versus 57.5 tmt in Q4 FY22).
Galaxy Surfactants said global demand continues to witness a cut back, although demand from the Indian market remains stable (expected to gain momentum from Q2 FY23 due to festive demand).
Signs of a slowdown are also visible in Europe, which adversely affected volumes of specialty care products. Supplyside constraints are improving and usher stability to earnings, with a sustainable Ebitda/kg of Rs 16-18.
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