BASF India zooms 33% in two days on robust June quarter results

The company reported a net profit of Rs 197.28 crore in Q1FY22 as against a loss of Rs 31.18 crore in Q1FY21

Shares of specialty chemicals company BASF India hit a new high of Rs 3,795.45 as they rallied 12 per cent in Monday's session, gaining 33 per cent in the past two trading days on reporting a net profit of Rs 197.28 crore for the quarter ended June 2021 (Q1FY22) on the back of strong operational performance. It had posted a net loss of Rs 31.18 crore in Q1FY21 and a profit of Rs 55.81 crore in Q4FY22.

The company’s revenue from operations grew 69 per cent year-on-year (YoY) and 7.4 per cent quarter-on-quarter (QoQ) at Rs 3,012.90 crore during the quarter under review, on account of higher volumes and better price realisation. Most business segments of the company including agricultural solutions, segments focused on the automotive industry as well as the industrial solutions and surface technologies delivered profitable growth.

BASF India, a 73.33 per cent subsidiary of BASF SE, is the flagship company of the BASF group in India. The portfolio of BASF SE is organised under six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care and Agricultural Solutions.

The company receives strong operational as well as product support from BASF SE, one of the leading chemical companies in the world. A high level of integration between the parent and the Indian arm reflects synergies arising from similar businesses.

CRISIL Ratings believes the parent will extend timely, need-based financial support in case of pressure on cash flows, and also support financing of any large capex, if undertaken. The company received external commercial borrowings (ECBs) to fund its Dahej expansion in the past, and the parent also rearranged the repayment terms when cash generation was impacted. Entire ECBs have now been repaid.

The company’s products cater to various end-user industries, including automotive, personal and home care, agriculture, petrochemicals, and refining. As seen in fiscal 2021, wherein the agricultural solutions and nutrition and care segments were less affected by the pandemic and outperformed other segments, the diversified revenue streams mitigate the impact of cyclicality and competitive pressures in any particular business segment, CRSIL Rating said.

On July 27, 2021, the rating agency CRISIL revised the outlook on the non-convertible debenture programme of BASF India to ‘Stable’ from ‘Negative’. It reaffirmed the rating on the non-convertible debentures at ‘CRISIL AAA’.  The ratings on the fixed deposits and commercial paper also reaffirmed at ‘FAAA/Stable’ and ‘CRISIL A1+’, respectively.

At 10:29 am, BASF India was trading 9 per cent higher at Rs 3,684.90 on the BSE, as compared to a 0.40 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped over five times, with a combined around 810,000 equity shares having changed hands on the NSE and BSE.