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Sudarshan Chemical Industries Ltd
NSE: SUDARSCHEM BSE: 506655 INE659A01023 Commodities Energy 🔎 Screen
Microcap 250
₹9,419 Cr
Market Cap
129.9
P/E
PEG
5.5%
ROCE
0.5%
ROE
0.72
D/E
12.2%
OPM
-25.9%
% from 52W High
78
α RS
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
Shareholding
About

Sudarshan Chemical Industries manufactures and sells a wide range of Organic and Inorganic Pigments, Effect Pigments. The Group also manufactures Pollution Control Equipment, Size Reduction Equipment and Grinding Equipments for industrial applications.(Source : 202003 Annual Report Page No:203)

✓ Strengths 4
  • Company is expected to give good quarter
  • Company has been maintaining a healthy dividend payout of 82.7%
  • Debtor days have improved from 93.5 to 62.6 days.
  • Company's working capital requirements have reduced from 91.5 days to 62.2 days
! Concerns

No concerns data yet.

Key Ratios Snapshot
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📈 Growth Pattern
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3-Statement Financial Model
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Mixed — profitability and deleveraging improved sharply, but consolidated revenue growth stayed muted at +5.4% YoY and the engineering business RIECO posted a negative EBITDA quarter. quarter Investor Presentation One-Pager? Jun 2026
Revenue
₹2,642 Cr
+5.4% YoY; -5.3% QoQ vs ₹2,790 Cr; pigment-only revenue ₹2,605 Cr (+6.1% YoY)
EBITDA Margin
9.4%
Business EBITDA margin, +340 bps YoY from 6.0%; reported EBITDA ₹266 Cr (~10.1% margin) including inventory overhead
Key Metric
Net debt ₹531 Cr
Down from ₹922 Cr peak (Sep'25) and ₹755 Cr FY26; net debt/equity 0.2x; ROCE 22.7% annualised vs 10.8% FY26
What Went Right
  • Consolidated business EBITDA rose 63.0% YoY to ₹247 Cr; margin expanded 340 bps to 9.4% from 6.0%.
  • Acquired Group reported EBITDA jumped to ₹146 Cr from ₹78 Cr YoY; business EBITDA doubled to ₹128 Cr and margin improved to 6.5% from 3.4%.
  • Net debt reduced to ₹531 Cr from ₹922 Cr peak; ROCE improved to 22.7% annualised from 10.8% FY26.
  • Legacy pigment revenue grew 26.3% YoY to ₹730 Cr and Pigment Global revenue rose 6.1% YoY to ₹2,605 Cr.
  • Working capital efficiency improved: NWC/sales at 23.6% vs 25.9% FY26; net debt/equity improved to 0.2x from 0.3x.
What to Watch
  • Consolidated revenue was only +5.4% YoY and -5.3% QoQ to ₹2,642 Cr; Pigment Global revenue also declined 3.1% QoQ to ₹2,605 Cr.
  • RIECO was the clear weak spot: revenue ₹38 Cr (-25% YoY), EBITDA -₹10 Cr and PBT -₹12 Cr, due to subcontractor availability and customer site readiness delays.
  • Acquired Group's reported EBITDA quality is weakened by a ₹18 Cr inventory-overhead credit; business EBITDA was ₹128 Cr (6.5% margin), still well below Legacy's normalised 15.6%.
  • Management cites renewed Middle East disruption: spiked energy/raw material costs, urea supply constraints in India, logistics lead times up 1-2 weeks, and customers delaying purchases.
  • Legacy normalised EBITDA was also flattered by a ₹13 Cr inventoried overhead credit; excluding it, normalised EBITDA was ₹114 Cr (15.6% margin), lower than the headline 17.4%.
Management Guidance
  • FY27 guidance (reaffirmed): Acquired Group sales ~€700 Mn and EBITDA ~€35 Mn.
  • FY27 targets: revenue ₹9,800-10,200 Cr, EBITDA ~₹800 Cr, net debt ~₹500 Cr.
  • FY29 targets: revenue ₹12,000-14,000 Cr, EBITDA ₹1,400-1,500 Cr, cash positive.
Investor Lens
The core synergy thesis remains intact — acquired-group business EBITDA swung from ₹65 Cr to ₹128 Cr YoY, and net debt fell from ₹922 Cr to ₹531 Cr. But the market is not out of the woods: consolidated revenue rose only 5.4% YoY, declined sequentially, and RIECO is a negative-EBITDA drag. I would treat the reported EBITDA beat cautiously because inventory overheads contributed ₹18 Cr in acquired and ₹13 Cr in legacy EBITDA, overstating cash-backed profitability. The next quarter's checkpoints are: (1) whether acquired group can keep business EBITDA margin above 6.5% despite Middle East cost and demand shocks; (2) RIECO order/execution recovery; (3) One SAP go-live within FY27; and (4) continued net debt reduction toward the ~₹500 Cr FY27 target. If revenue stays low-single-digit and inventory credits normalise, margin level — not headline growth — will be the swing factor for the stock.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Net profit jumps 87% YoY to ₹103 Cr; revenue up 5.4%
Revenue
Revenue for Jun 2026 quarter stood at ₹2,642 Cr, up 5.4% YoY from ₹2,506 Cr but down 5.3% QoQ from ₹2,791 Cr. The modest annual growth suggests stable demand, with a seasonal sequential dip.
Profitability
Net profit surged 87.3% YoY to ₹103 Cr from ₹55 Cr, and rose 25.6% QoQ from ₹82 Cr. EPS came in at ₹12.22 versus ₹6.01 in the same quarter last year, reflecting strong bottom-line expansion.
Margins
Operating profit jumped 34.9% YoY to ₹259 Cr, driving OPM to 10% from 8% a year ago. The 200 bps YoY margin improvement indicates better cost control or product mix, though QoQ OPM held at 8% (implied).
Balance Sheet
Debt-to-equity ratio stands at 0.72, indicating moderate leverage. No further balance sheet details such as reserves or total debt levels were provided.
Key Risks
The stock trades at a high PE of 123x, which leaves little room for earnings misses. Return on capital employed (5.46%) and ROE (0.54%) are very low, suggesting weak capital efficiency. Revenue growth of just 5.4% YoY could pressure margins if input costs rise.
Outlook
With strong profit growth and margin expansion, the company appears to be on a positive trajectory. However, sustaining these trends will depend on demand recovery and managing leverage, as valuation already prices in high expectations.
Generated by AI · Jun 2026 results · Not investment advice
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Revenue by Segment

Segment Q2FY26 Q3FY26 Trend
Others
61
EBIT 6
52
EBIT -2
Pigment
2,327
EBIT 126
2,052
EBIT 40
Total 2,388 2,104

Source: NSE Integrated Filing XBRL (Reg. 33 Ind AS). Values in ₹ Crore.

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Investment Risk:
Investing in securities, including equities and mutual funds, involves inherent risks, including the potential loss of principal. All investments are subject to market fluctuations, regulatory changes, and other risks that may affect their value. Past performance is not indicative of future results. This report is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

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This report does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a SEBI-registered investment adviser or other qualified financial professional before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Information Sources:
The analysis and opinions expressed herein are based on publicly available information, including but not limited to company filings with the BSE/NSE, annual reports, management commentary, investor presentations, data from the Reserve Bank of India (RBI), SEBI, industry publications, and other reliable financial data sources. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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