Meghmani Organics Q1 Results: Swings To Loss As Revenue Falls By Nearly Half
The company incurred a net loss of Rs 34.5 crore against a net profit of 109.1 crore in the year-ago period.
Meghmani Organics Ltd. incurred a net loss in the first quarter of fiscal 2024.
The company incurred a net loss of Rs 34.5 crore against a net profit of 109.1 crore in the year-ago period, according to an exchange filing on Monday.
Meghmani Q1 FY24 Highlights (Consolidated, YoY)
Revenue down 46% at Rs 425.8 crore.
Ebitda loss of Rs 22.1 crore vs Rs 131.9 crore.
Net loss of Rs 34.5 crore vs profit of Rs 109.1 crore.
During Q1 FY24, revenues from operations were impacted by prolonged challenging global macro-economic environment, demand slowdown and decline in prices across industry, according to press release by the company
During the quarter, Ebitda loss was Rs 15 crore due to higher cost of operation and lower capacity utilisation coupled with destocking of inventory.
Agrochemicals constituted about 71% of the overall company’s revenue during Q1 FY24. The segment was impacted by global headwinds in agrochemicals on account of excess supply in the market, causing pricing pressure. Subdued demand led to lower capacity utilisation, impacting operational efficiencies, and high overheads have impacted profitability, the press release said.
Pigments constituted around 29% of the overall company’s revenue in Q1 FY24. The pigment industry is witnessing weaker global demand and dropping prices, resulting in companies cutting down their inventory pipelines, which is further hampering demand and causing pricing pressure. China has imposed antidumping, which has impacted offtake from Indian players, it said.
"In testing times like these, our priority as the management of the company is to be able to withstand this downturn, overcome these challenging times, and come out of it with enhanced wisdom and strength. During this time, we have adopted certain strategies such as cost rationalisation, wherein the management has proactively undertaken cost control measures, cleared the high-priced inventory, optimised the working capital utilisation, and enhanced the cash conversion cycle to maintain our balance sheet strength," said Chairman and Managing Director Ankit Patel.
Lastly, I would like to reiterate that our long-term goals remain intact. Some of the virtues, such as our expanded infrastructure, plant compatibility, wider product range, and geographical reach, will help Meghmani Organics to command a sustainable long-term position," he said.
Shares of Meghmani Organics were trading 3.13% lower at Rs 80.55 apiece, compared with a fall of 0.10% in the benchmark NSE Nifty 50 at 2:01 p.m.