Rossari Biotech Q2 Results Review - Weak Raw Material Prices Led To Tepid Earnings Growth: Yes Securities

Yes Securities Report

Rossari Biotech Ltd.’s reported operating profits at Rs 636 million (+12% YoY; +10% QoQ). The Ebitda margin at 13.1% (Q1: 14.1%), lower on account of higher other costs and decision to grow volumes at minor cost of margins.

The standalone earnings stood stronger with standalone Ebitda at Rs 483 million growing by 73% YoY and 38% QoQ, driven by a 14% YoY and +18% QoQ growth in revenue and improved Ebitda margin of 14.5%.

Home, personal care, and performance chemicals segment saw strong contribution from institutional cleaning, paints home, and personal care, reporting a growth of 21%, textile specialty chemical grew by 5 %, while animal health nutrition was down by 28% QoQ which was result of prudence as difficulties were seen on payment terms leading the decision to reduce the feed business and met seasonally weak quarter due to double Shravan.

To supplement Rossari's further growth, announced expansion of Dahej facility to foray into specialty chemicals and ingredients for subsidiaries. Unitop facility current capacity of 36k mtpa of ethoxylation operating at optimal levels, additional facility of 30,000 mtpa being added to meet future demand.

Both these expansions will take place in phased manner till Q3 FY25. We maintain 'Buy' rating with revised target price of Rs 1,015/share.

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