(CMP – Rs. 491, Market Cap – Rs. 3,400 crore)

Sudarshan’s T3FY21 results were better than I-direct estimates on all fronts.

T3FY21 Revenue Summary

– Revenue grew 19.6% year-on-year to Rs. 506.4 crore (I-direct estimate: Rs. 464.3 crore) driven by 22.1% pigment segment growth to Rs. 477.1 crore (I-direct estimate: Rs. 427.7 crore) amid a likely recovery in end-user demand

– EBITDA margins improved 138 basis points year-on-year to 15.7% (I-direct estimate: 15.7%) mainly due to lower other expenses. Subsequently, EBITDA increased 31% year on year to reach Rs. 79.6 crore against I-direct estimate of Rs. 72.9 crore

– Net profit increased 38.4% year-on-year to Rs. 39.2 crore (I-direct estimate: Rs. 34.5 crore), in line with operating performance and other higher income

Business operations and end-user demand are returning to normal as the economy opens up. Despite a difficult year, Sudarshan reiterated its growth investment plan of Rs. 585 crore (albeit delayed amid Covid), showing its high visibility and commitment to future growth. Its strong track record, with favorable macroeconomic factors and strong domestic demand, are the main catalysts. Margins should also improve due to upstream integration, the shift in the product mix towards accretive products.

We will post an update discussion with management.

Shares of SUDARSHAN CHEMICAL INDUSTRIES LTD. was last trading on BSE at Rs.491.85 from the previous close of Rs. 499.8. The total number of shares traded during the day was 5,035 in over 360 trades.

The share hit an intraday high of Rs. 499 and an intraday low of 486.1. The net turnover during the day was Rs. 2,475,946.