GHCL Limited experiences decline in Q3FY24 financial outcomes amid global demand fluctuations
In its latest financial disclosure, GHCL Limited, a leading name in India’s chemical sector, revealed a marked decrease in its financial performance for the third quarter of the fiscal year 2024 (Q3FY24). The standalone results show a substantial 61% drop in Net Profit After Tax (PAT) and a 27% reduction in revenue. Managing Director R S Jalan attributed these downturns to a weak global demand-supply situation, specifically noting lower demand in Europe and the Americas. This scenario led to increased exports to Asia, including India, which in turn suppressed soda ash prices and lowered realizations. Additionally, an annual maintenance shutdown in October 2023 further impacted volumes, temporarily reducing them by approximately 20,000 metric tons.
Detailed Financial Performance Analysis
The comparison of Q3FY24 with the same quarter in the previous fiscal year (Q3FY23) illustrates a significant downturn:
– Net Revenue decreased by 27%, from Rs.1107 crores in Q3FY23 to Rs.813 crores in Q3FY24.
– Earnings Before Interest, Taxes, Depreciation, and Amortization (EBIDTA) saw a 56% decline, from Rs.372 crores in Q3FY23 to Rs.165 crores in Q3FY24.
– Net Profit After Tax (PAT) plummeted by 61%, from Rs.254 crores in the corresponding quarter of the last fiscal year to Rs.100 crores in Q3FY24.
GHCL Limited, India’s Premier Chemical Firm, Faces a Steep Decline in Q3FY24 Earnings
Comparing quarter-to-quarter performance (Q3FY24 vs. Q2FY24), the report indicates a relatively stable net revenue but highlights a decrease in profitability:
– Net Revenue remained nearly unchanged at Rs.813 crores compared to Rs.817 crores in the preceding quarter.
– EBIDTA fell by 26% from Rs.224 crores in Q2FY24 to Rs.165 crores in Q3FY24.
– Net Profit (PAT) decreased by 30% from Rs.143 crores in the sequential quarter to Rs.100 crores in Q3FY24.
Future Outlook and Recent Developments
Despite the challenges, R S Jalan remains optimistic about the future, citing the growing emphasis on sustainable energy solutions and the expansion of the electric vehicle (EV) ecosystem as potential drivers for increased soda ash demand and improved margins. Additionally, GHCL has signed Memorandums of Understanding (MOUs) at the Vibrant Gujarat Summit 2024, indicating plans for further investments in the state of Gujarat.
About GHCL Limited
GHCL Limited is renowned for its production of Soda Ash (Anhydrous Sodium Carbonate) and Sodium Bicarbonate (baking soda), essential raw materials for the detergent and glass industries. Following a strategic demerger, its spinning business has been reorganized into GHCL Textiles Limited, focusing on producing a variety of fibers (yarn) for both domestic and international markets.