The stock of capital goods company was trading at its record high level, it has rallied 55% in the past five months. In comparison, the S&P BSE Sensex was down 1% during the same period.
GMM Pfaudler is a leading supplier of process equipment to the pharmaceutical and chemical industries. The company had reported a healthy 50% year-on-year (y-o-y) growth in net profit at Rs 189 million for H1FY19 (April-September). Operating revenue grew 32% at Rs 1,924 million on y-o-y basis. Ebitda (earnings before interest, tax, depreciation and amortization) margin expanded 300 bps at 16% in H1FY19 from 13% in H1FY18.
The key demand industries for GMM Pfaudler - pharmaceuticals, specialty chemicals and agrochemicals, are all expected to grow at a CAGR of 10-15% over the next 5 years. These industries will continue to invest to increase their manufacturing capacity as well as to upgrade their manufacturing facilities.
“Demand outlook across our business lines remain buoyant and our backlog continues to be very strong across all our business lines driven by the chemical and pharmaceutical sectors. Exports sales have been steadily improving and we are also seeing improved performance in our subsidiary Mavag,” Tarak Patel, Managing Director, GMM Pfaudler said while announcing September quarter results.
Looking at the positive economic momentum and the initiatives taken by the Indian Government, our end user industries will witness capital spending for both new manufacturing facilities as well as upgrading of existing facilities. India stands at an inflection point to benefit from the global supply shortage in the specialty chemical segment and strong domestic drivers in the pharmaceutical and agro chemical segment, the company said in an annual report.
At 10:32 am; GMM Pfaudler was trading 9% higher at Rs 1,240 on the BSE. In comparison, the S&P BSE Sensex was unchanged at 35,925 levels. A combined around 14,000 shares changed hands on the counter on the BSE and NSE so far.