Meghmani Organics shares plunge 12% as Q3 profit tanks 74%. Full details

Shares of Meghmani Organics plunged 12 per cent in Monday's trade following the company's December quarter results. Meghmani Organics said its profit tanked 74 per cent year-on-year (YoY) to Rs 18 crore in the December quarter compared with Rs 68 crore in the year-ago quarter. Revenue from operations declined 13 per cent YoY to Rs 554 crore from Rs 639 crore in the year-ago quarter. Ebitda for the quarter was down 21 per cent YoY to Rs 61 crore from Rs 77 crore, the company said in a BSE filing.

Meghmani Organics said its Ebitda margin fell 100 basis points to 11 per cent from 12 per cent YoY. Net profit margin plunged to 3 per cent from 11 per cent YoY, the company told stock exchanges.

Meghmani Organics said the company has estimated total loss of Rs 44 crore due to fire in finished goods godown in one of the pigment plant at Dahej. Meghmani has adequate insurance cover, the company said. 

During the quarter company has recognised loss of Rs. 39.85 crore on account of loss of assets and has also recognised corresponding insurance claim. The balance Rs 4 crore loss has been accounted for during the quarter as per policy provisions, it said.

Following the development, the stock fell 12.06 per cent to hit a low of Rs 92.90 on BSE.

Agrochemicals, constitutes 75 per cent of the overall company’s revenue. During this quarter, the company was able to maintain Ebitda margins of 19.2 per cent against 17.5 per cent in Q3FY22, despite adverse global macro challenges.

"The company is well positioned to benefit from ‘China plus one’ strategy of global players coupled with capex plans eyeing on new molecules in agrochemicals," Meghmani Organics said.

Pigments constitutes 25 per cent of the overall company’s revenue. Meghmani said pigment is witnessing slow export demand and contraction in prices due to challenging global macro environment.

During the quarter pigment performance was adversely impacted due to liquidation of high-cost inventory, it said while expecting the recovery in the demand in the pigment division in the next few quarters.

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