Sumitomo Chemical surges 9%, hits 52-week high on solid Q4 results

In Q4FY24, Ebitda jumped 74% Y-o-Y at Rs 140 crore, while margin improved to 20.8 per cent from 12.4 per cent in Q4FY23

Sumitomo Chemicals stock price update: Shares of Sumitomo Chemical India hit a 52-week high of Rs 482 as they surged 9 per cent on the BSE in Tuesday's intraday trade amid heavy volumes, after the company reported a solid March quarter (Q4FY24) result with earnings before interest, tax, depreciation, and amortisation (Ebitda) jumping 74 per cent year-on-year (Y-o-Y) at Rs 140 crore, tracking gross profit margin (GPM) improvement and lower growth in operating cost.

Ebitda margin improved to 20.8 per cent from 12.4 per cent in Q4FY23. The company’s profit after tax grew 52 per cent Y-o-Y at Rs 110 crore during the quarter. Revenue, however, rose by 3 per cent Y-o-Y to Rs 674 crore from Rs 652 crore in the year-ago quarter.

The company implemented strict controls over fixed costs, maintaining these expenses even amid high inflation. This disciplined approach extended to collections, inventory management, and overall working capital, collectively helped stabilise financial performance.

The management said the company's focus in FY25 would be towards recovering the revenues lost during the challenging situation of FY24, by way of more extensive demand generation and brand building efforts, especially for recently launched products in the last 2-3 years. The company also plans to continue to follow disciplined approach towards margins, fixed costs and working capital.

At 10:54 AM, Sumitomo Chemical was quoting 8.5 per cent higher at Rs 478.10, as compared to 0.16 per cent rise in the S&P BSE Sensex. The average trading volume on the counter jumped over nine-fold with a combined 8.4 million equity shares, representing 1.68 per cent of total equity of the company, changing hands on the NSE and BSE. The stock surpassed its previous high of Rs 454.55 touched on September 5, 2023. It has bounced back 43 per cent from its March 2024 low of Rs 336.40 on the BSE.

The company is primarily engaged in manufacturing and sales of household insecticides, agricultural pesticides, public health insecticides and animal nutrition products. It is engaged in domestic marketing of proprietary products of its Japanese parent – Sumitomo Chemical Company Limited – in agrochemicals, animal nutrition and environment health business segment.

In FY24, agro-solution sector globally and in India faced several extra-ordinary challenging situations (mainly adverse weather, poor demand, inventory reductions, downward price volatility and supply chain disruptions along with several geo-political situations. Most of these appear to be temporary one-time factors and the situation is expected to normalise in the short-term. Growth potential of the agro-solution sector and especially high growth markets like India continues to be positive in the medium to long term, the company said.

Sumitomo Chemical launched three herbicides, one insecticide, and two fungicides in FY24. The company said it is gearing up to launch several unique first-time registrations in India after years of efforts, which are expected to ramp up over the next few years.