Dismal Q4 earnings drag Balaji Amines shares to 52-week low

Shares of Balaji Amines tanked 18.5 percent in early trade on May 22 as investors shunned the stock after the company’s dismal performance on all three fronts of profit, revenue and profitability for the fourth quarter.

The company’s net profit for the January-March period slumped 56.4  percent on-year to Rs 47.4 crore, largely on the back of headwinds in global pharma active pharmaceutical ingredients (APIs) and agro industries segments.

De-growth in the two segments also weighed heavily on the company’s operating performance as EBITDA (earnings before interest, taxes, depreciation, and amortization) margin contracted to 19.8 percent in Q4 as against 25.1 percent in the year ago period.

To top it all, revenue also disappointed the Street as it registered a 39.6 percent decline to Rs 471.4 crore as against Rs 780.40 crore in the same quarter in FY22.

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At 10.11am, shares of  Balaji Amines were trading with a cut of 10.25 percent at Rs 2,070 on the National Stock Exchange. The stock also plunged to a 52-week low of Rs 1,880 intraday.

Volumes in the counter also shot up as four lakh shares changed hands on the exchanges so far, as against the one-month daily traded average of one lakh shares.

Despite the weak quarterly numbers, the management remains hopeful of a turnaround in the coming quarters as they anticipate returning to growth and achieving EBITDA margins close to the pre-pandemic levels.

“Adding to that, revenues from the new commenced plants such as DMC, PG, Ethylamines will start contributing to the topline from the coming quarters, which in turn can improve the company’s margin profile from Q1 of FY24,” the management stated in an exchange filing.

Moreover, the initial slump in the stock was also amid concerns as several independent directors of the company – Naveena Thammishetty Chandra, Kashinath Revappa Dhole, Satyanarayana Murthy Chavali, Amarender Reddy Minupuri and Vimala Behram Madon resigned. In addition, Hemnath Reddy Goddam also resigned as the company’s chief financial officer and whole-time director to focus on subsidiary, Balaji Specialty Chemicals.

Nonetheless, the stock recouped some of its losses after the company clarified that most of the resignations came as per SEBI’s (Securities and Exchange Board of India) regulations. As per SEBI’s rule, an independent director  must resign after they completes 10 years which was the reason behind the resignations, an independent director of the company told CNBC-TV18.

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