Sudarshan Chemical

Sudarshan Chemical
Investor Presentation –Q2 FY3
Bad Result due to
• Price Correction
• Volume De-growth in India and export market
• Deferment of buying decision by customer due to price volatility
• Paint industry down due to extended monsoon
• Coal prices have gone up further.
• price correction of major price drivers such as brent crude, benzene and toluene prices. Due to higher
inventory level, we could not accrue this benefit immediately

Europe has witnessed major demand disruption. China “Zero covid policy” has also led to
overall demand contraction.

Market share in coating and plastic has been well maintained.

EBITDA margin is around the same level while the sales has been lower compared to Q1.
Management Focus
• Structural cost reduction
• Pricing decisions with calibrated approach to
balance on volume growth.
• Implementing growth capex of 750Cr by H1 FY23
• Most of the capex should be put to use by
December end. (Product approval cycle is working
well)
• Evaluating new CapEx
Future Outlook
• Domestic market Improving but export market not
• Q3 may be good
• over a period, in a quarter or two, we will start looking at the upward trajectory in terms of our margin.

Tailwinds
• Competitors exiting the business
• high energy cost in Europe
• Benefit will start to come from Q4

Product focus: Yellow Pigment

• Reached targeted sales
• It is a very unique high performance pigment product for mainly the paint application which has very good weather
fastness.
• There are only one or two other producers in the world and probably Sudarshan is the third producer in the world
• It would take three to four years to fully utilized all the capex in normal Environment

Headwinds
• In China given the zero COVID policy demand has been very, very subdued
• There is anti-dumping duty proposed on Phthalocyanine pigments as levied by China on all the Indian producers
• Aggressive pricing by China especially in Ink
Sudarshan Chemical
Review of Annual Report