28-Oct-2026 10:20:35
SUMITOMO CHEMICAL INDIA Q2 CONCALL: REVENUE DECLINES 2%, EBITDA FALLS 15%; MANAGEMENT MAINTAINS 20%+ MARGIN OBJECTIVE, PLANS ₹150 CR DAHEJ EXPANSION & EXPLORES SEMICONDUCTOR OPPORTUNITIES
• MANAGEMENT MAINTAINS EBITDA MARGIN OBJECTIVE OF AT LEAST 20%, SUPPORTED BY COST CONTROL, IMPROVED INVENTORY MANAGEMENT & OPERATING EFFICIENCIES • MANAGEMENT EXPECTS STABLE PERFORMANCE IN H2 FY27, WITH EBITDA MARGINS REMAINING WITHIN HISTORICAL LEVELS DESPITE CHALLENGING AGROCHEMICAL DEMAND • MANAGEMENT TARGETS COMMERCIAL PRODUCTION AT ITS ₹150 CR DAHEJ GREENFIELD FACILITY IN Q2 FY29, MANUFACTURING AN INTERMEDIATE FOR A MAJOR HERBICIDE • MANAGEMENT EXPECTS DAHEJ PROJECT PAYBACK WITHIN FIVE YEARS, WITH MARGINS BROADLY IN LINE WITH EXISTING BUSINESS LEVELS • MANAGEMENT PLANS ₹20 CR INVESTMENT ACROSS TWO TARAPUR PROJECTS TO INTRODUCE 3–4 ADDITIONAL PRODUCTS, WITH COMPLETION TARGETED DURING FY27 & FY28 • MANAGEMENT EXPECTS TO INTRODUCE 1–2 NEW SPECIALTY MOLECULES ANNUALLY, WHILE TARGETING LOCAL MANUFACTURING OF INDIFLIN BY FY27-END • Q2 REVENUE DECLINED 2% YOY TO ₹907 CR, WHILE EBITDA FELL 15% TO ₹187 CR & NET PROFIT DECLINED 11% TO ₹157 CR • Q2 EBITDA MARGIN CONTRACTED 297 BPS YOY TO 20.5%, WHILE GROSS MARGIN DECLINED 240 BPS TO 40.7%, IMPACTED BY HIGHER-COST INVENTORY • DOMESTIC REVENUE GREW 2% YOY TO ₹774 CR, DESPITE HIGH-SINGLE-DIGIT VOLUME DECLINE DUE TO ERRATIC MONSOON CONDITIONS & WEAK CROP-PROTECTION DEMAND • Q2 EXPORT REVENUE DECLINED 23% YOY TO ₹127 CR, WHILE H1 EXPORTS REMAINED STABLE AT ₹300 CR; MANAGEMENT EXPECTS RECOVERY AS INVENTORY NORMALISES • KEY SPECIALTY PRODUCTS INCLUDING SUMI MAX, MESHI, EXCALIA MAX, FORSAN & PROZIB GREW APPROXIMATELY 22% DURING H1, WHILE INDIFLIN RECORDED AROUND 50% GROWTH • COMPANY LAUNCHED PATENTED BIOSTIMULANT TOPGRAIN IN INDIA, WITH BROADER DOMESTIC COMMERCIALISATION PLANNED NEXT YEAR • JAPANESE PARENT SIGNED AN MOU FOR POTENTIAL SEMICONDUCTOR CHEMICAL SUPPLY IN INDIA, BUT THE LISTED COMPANY'S INVESTMENT, REVENUE OPPORTUNITY & EXECUTION TIMELINE REMAIN UNCONFIRMED • CASH & LIQUID INVESTMENTS INCREASED TO ₹2,523 CR FROM ₹2,113 CR IN MARCH 2026, WHILE H1 OPERATING CASH FLOW IMPROVED TO ₹447 CR; COMPANY REMAINS VIRTUALLY DEBT-FREE • MANAGEMENT REMAINS POSITIVE ON SPECIALTY PRODUCTS, CAPACITY EXPANSION & LONG-TERM OPPORTUNITIES, BUT WEAK AGROCHEMICAL DEMAND, EXPORT UNCERTAINTY, INVENTORY BUILD-UP & DAHEJ EXECUTION REMAIN KEY RISKS
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