Galaxy Surfactants share price gains 5% as Q1 Results beat estimates: Worst may be behind for specialty chemicals major

Stock Market Today: Galaxy Surfactants share price gained more than 5% in intraday trades on Friday The Specialty chemicals major gained following encouragement provided by Q1 results that were declared post market hours on Thursday. It is the stability in performance now that is leading to market belief that the worst is over said analysts. However pace of demand recovery remains watched for.

The Galaxy Surfactants share price after opening at ₹2,903.00 on Friday scaled highs of ₹3,040.00 marking gains of more than 5% over the previous close. On Friday the Galaxy Surfactants share price ended at ₹2990 on the NSE.

K. Natarajan, Managing Director, Galaxy Surfactants Limited said that there are visible signs of improving demand for our premium specialties, which should improve our overall profitability.

The specialty chemical manufacturers have seen their performance impacted by weak demand and inventory destocking cycle during FY24. Natarajan said that demand across geographies has improved

Stable Q1 Beats estimates

The Galaxy Surfactants net profit at ₹79.7 Crore grew 6% year-on-year and 3% sequentially. The Earnings before interest tax depreciation and amortisation at ₹129.5 Crore grew 3% and Ebitda margins at 13.2% remained stable. The Galaxy revenues at ₹979.5 crore grew 3%.

The net profit came 20% higher than estimates of Motilal Oswal Financial Services, while revenues were around 3% higher than estimates. MOFSL Has a Buy ratings on the Galaxy Surfactants share price.

Management confident on growth

K. Natarajan, Managing Director, Galaxy Surfactants speaking to Mint said that post Q1 the company remains committed on achieving the upper band of 6-8% volume growth guidance and Ebitda per ton guidance of ₹20,500 – 21,500 pet ton during FY25 .

The Q1FY25 saw volume growth of 8%, in line with expectations and Volume Growth across all regions and segments was a major positive this quarter, said Natrajan.

The Ebitda per tonne came at ₹20,197 per tonne slightly below the guided band as higher freight costs due to the abnormal increase in Freight rates across all locations contributed to the same. Natrajan said that despite multiple challenges, we are on track to regain our profitability trajectory.

Challenges

To be sure the rising costs of freight amidst rising geopolitical risk remain to be watched. The raw material costs are also rising due to freight costs. Natarajan said that most of the costs are a pass throughs though with a lag of a quarter. Hence they are managing optimal raw material and other such inventories

On a global side, while demand is gradually improving, challenges persist due to supply chain volatility and escalating geopolitical tensions said Rohit Nagraj and Kunal Pai at Centrum Broking

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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