Fine Organic gains on strong operational show in Q4

Fine Organic Industries jumped more than 7 percent in early trade on May 25, a day after the chemicals company reported a 40.7 percent year-on-year increase in net profit at Rs 149.4 crore in the January-March period. Net profit in the year-ago period was Rs 106 crore.

The rise in bottomline was aided by a strong improvement in operating margin even as the topline remained weak. Revenue declined 21.4 percent year-on-year to Rs 596.6 crore from Rs 759.5 crore in the same quarter of the previous fiscal.

However, the EBITDA (earnings before interest, taxes, depreciation, and amortization) margin expanded to 34 percent from 21.2 percent in the corresponding quarter of the previous year ago.

“The sharp improvement in EBITDA margin was due to adjustment for inventory build-up, taking it ahead of our estimates,” Nitesh Dhoot – Research Analyst, Prabhudas Lilladher, said in a note.

The company has recorded a year-on-year rise in net profit and EBITDA margin through all the four quarters of FY23. The third quarter delivered the weakest performance on a sequential basis.

At 10.36 am, Fine Organic Industries  was trading around 1 percent higher at Rs 4,542.05 on the National Stock Exchange. The stock touched an intraday high of Rs 4,822.45 in the first hour, which prompted investors to book partial profits, bringing the stock off its highs.

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Volumes in the counter also rose sharply as one lakh shares changed hands on the bourses, significantly higher than the one-month daily traded average of 24,000 shares.

The stock has given robust returns of over 134 percent in the past year.

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