Pondy Oxides and Chemicals reports 188% surge in PrFY25 profits amid strong revenue growth

Pondy Oxides and Chemicals Limited (POCL) has reported a 42% year-on-year increase in revenue to INR 1,024 crore for the half-year ended September 30, 2024. EBITDA rose by 75% to INR 53 crore, while Profit After Tax (PAT) surged 188% to INR 28 crore, highlighting the company’s robust financial performance. POCL, listed on the Bombay Stock Exchange (BSE Code: 532626) and National Stock Exchange (NSE Symbol: POCL), has emerged as a major force in the metals and chemicals market with these impressive gains.

Record Financial Growth in H1FY25

The company’s revenue increased to INR 1,024 crore for the half-year period, representing a substantial 42% growth compared to the previous year. Consolidated EBITDA also rose significantly by 75% year-on-year to INR 53 crore, fueled by increased sales in lead, plastics, and copper, as well as operational efficiencies. PAT grew dramatically by 188% year-on-year, reaching INR 28 crore, underscoring the company’s strong financial footing.

On a quarterly basis, POCL also reported notable growth, with revenue for Q2FY25 amounting to INR 579 crore, marking a 46% year-on-year increase. This growth was driven by higher capacity utilization in lead and plastics production.

Operational Highlights Driving Financial Success

POCL’s operational performance for the half-year has been strong, with lead production increasing by 50% year-on-year to 46,855 metric tons. Sales of lead rose by 47% to 45,959 metric tons during the same period. Copper and plastics production also showed considerable growth, supported by increased imports and effective resource management.

The company attributed these results to strategic capacity expansion initiatives and improved operational efficiencies. Government regulations, including the Batteries (Management and Handling) Rules and Extended Producer Responsibility (EPR), also played a significant role in driving growth, especially in the recycling segment.

Expert Insight: Strategic Roadmap and Future Outlook

Managing Director Ashish Bansal expressed confidence in POCL’s future, stating that ongoing investments in capacity expansion and technological upgrades are expected to sustain growth. He emphasized that POCL is well on track to achieve its “Target 2030” objectives, which include doubling the current production capacity for lead and other metals, achieving 20% annual revenue growth, and enhancing EBITDA margins beyond 8%. Bansal added that the expansion at the Thervoykandigai plant is progressing well, with Phase 1 expected to be completed by year-end.

Strategic Expansion and Capital Investments

POCL is expanding its Thervoykandigai facility, with plans to increase lead production capacity from 36,000 metric tons per annum in Phase 1 to 72,000 metric tons in Phase 2. The expansion will require an investment of INR 70 crore, funded through proceeds from preferential issues and internal accruals. This move will further strengthen POCL’s position in the lead production market, catering to both domestic and international demand.

In addition, POCL has approved a share split, reducing the face value of equity shares from INR 10 to INR 5. This move is expected to enhance share liquidity and attract a wider investor base. POCL is also planning to raise up to INR 250 crore through a Qualified Institutional Placement (QIP) to support future expansions.

Investor Confidence and Stock Market Sentiments

POCL’s robust financial results have significantly boosted investor sentiment, reflected in the strong performance of its shares on both BSE and NSE. Analysts have highlighted the company’s share split and capital raising plans as positive moves that position POCL as a key stock to watch. The company’s ambitious growth targets, coupled with a proactive approach to industry dynamics, have helped bolster investor confidence.

Plans to establish new R&D facilities and reduce energy consumption to minimize the carbon footprint have also been welcomed by analysts and investors. POCL’s focus on expanding its portfolio of value-added products aims to drive future margin growth.

Looking Ahead

With a solid financial foundation and a clear strategy for expansion, POCL is well-positioned for continued growth. Its emphasis on increasing production capacities, improving efficiencies, and aligning with government regulations ensures the company is on a strong growth trajectory.