Sudarshan Chem. Q1 FY27 Results (NSE: SUDARSCHEM)
Signal: Margin expansion
The read
The quarter marks the first consolidated margin inflection after seven consecutive quarters of contraction: EBITDA margin recovered to 10.5% from an implied 8.7% YoY and EBITDA grew 27.3% despite only 5.4% revenue growth, but the thesis still depends on sustaining Pigments profitability while reversing the Others segment's ₹9.5 crore loss and reducing the standalone-versus-consolidated earnings gap.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,642.1 Cr | 5.4% | -5.3% |
| EBIT | ₹184.7 Cr | 54.9% | |
| Net profit | ₹97.3 Cr | 106.1% | |
| EPS | ₹12.3 | 105.0% | |
| EBIT margin | 10.5% |
P&L walk
Revenue was ₹2642.1 crore, up 5.4% YoY but down 5.3% QoQ; gross margin expanded to approximately 53.7% from 49.4% YoY, EBITDA margin rose to 10.5% from an implied 8.7%, and PAT attributable to owners increased 106.1% to ₹97.3 crore, supported by operating improvement and lower tax intensity despite ₹36.1 crore of integration and restructuring costs.
Segments
Pigments drove the consolidated recovery with revenue of ₹2604.4 crore, up 6.0% YoY, and EBITDA of ₹268.8 crore, up 39.9%, while Others deteriorated from ₹0.2 crore EBITDA profit to a ₹9.5 crore loss on revenue of ₹37.7 crore.
Key positives
- Consolidated EBITDA rose 27.3% YoY to ₹277.8 crore versus revenue growth of 5.4%, a 21.9 percentage-point growth gap, with employee costs up only 1.5%, depreciation down 6.0% and finance costs down 8.2%; EBITDA margin expanded approximately 180bps to 10.5%.
- Pigments EBITDA increased 39.9% YoY to ₹268.8 crore and its assets rose 2.4% YoY to ₹10068.0 crore, showing that the core acquired and legacy pigments platform is driving the group recovery.
- Consolidated PAT attributable to owners increased 106.1% YoY to ₹97.3 crore while EPS rose 105.0% to ₹12.3, indicating limited dilution impact from the 9,80,000-share warrant conversion.
Key concerns
- Consolidated revenue growth decelerated to 5.4% YoY from 295.4% in Q1FY26 and fell 5.3% QoQ to ₹2642.1 crore, so the margin recovery is occurring against slowing top-line momentum.
- Others moved from ₹0.2 crore EBITDA profit to a ₹9.5 crore loss on revenue of ₹37.7 crore, making the non-Pigments businesses a clear drag on group earnings.
- Standalone EBITDA fell 17.8% YoY to ₹118.0 crore and standalone PAT fell 21.1% to ₹57.8 crore despite 27.5% revenue growth, highlighting a material divergence between the parent and the consolidated acquired group.
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