Meghmani Organics revenues grew by 20% in Q2FY23

Meghmani Organics Ltd. (MOL) revenues grew by 20% YoY to Rs. 6,552 million in Q2FY23 led by better realization from both Pigment and Agrochemical businesses despite volatility in commodity prices globally. The outlook for both segments remains positive. The Company continues to delight its esteemed clients with a diversified product portfolio and quality products.

During the quarter, the Company’s Gross Profit grew by 10% YoY to Rs. 2,568 million as compared to Rs. 2,345 million. EBITDA grew by 9% YoY to Rs. 848 million in Q2 FY23 as compared to Rs. 777 million in Q2 FY22. PAT grew by 13% YoY to Rs. 734 million during the quarter. The Company’s PAT margin stood at 11.2% in Q2 FY23.

On the Balance Sheet front, the Company’s Cash balance & short term investments stood at Rs.593 million as on 30th September 2022. The Debt-Equity ratio stood at 0.39 during H1 FY23. Meghmani Organics return ratios i.e. ROCE and ROE stand robust at 18.0% and 24.7%, respectively as on 30th September 2022.

The Company’s resilient performance amidst a challenging global macro-environment demonstrates the management’s acumen towards risk management and financial prudence.

MOL’s capex plans are progressing well as planned. The Company continues to be optimistic about the overall growth with a huge untapped opportunity market in India led by the Government’s Atmanirbhar Bharat initiatives pushing the Indian Chemical industry towards import substitution and strengthening R&D capabilities. Additionally, the growing China plus one strategy amongst global nations has put the Indian Chemical industry in a sweet spot. MOL is well placed to benefit from favourable government policies. The management remains committed for sustainable growth and create long-term value for its esteemed stakeholders.

Strategy & outlook for agrochemicals business

• MOL’s backward integrated facilities ensure sustainability and lower dependency on raw material prices from China

• Completed projects in FY21: 2,4-D Capacity addition of 10,800 MTPA and new formulation plant to cater the growing agrochemicals demand in the domestic and global market

• New Multipurpose plant (MPP) at Dahej expected to be commissioned in Q3 FY23

• Expand branded products portfolio to penetrate into the growing domestic market

• The management eyes a revenue target of Rs. 3,000 Cr by FY25 for Agrochemicals Division