Profit before exceptional items and tax dropped 40% year on year to Rs 11.39 crore in quarter ended 31 March 2023. Exceptional items stood at Rs 3.59 crore in Q4 FY23.

Total expenses surged 42.69% YoY to Rs 113.97 crore in fourth quarter of FY23. Cost of materials consumed was at Rs 50.41 crore (down 19.86% YoY) and employee expenses stood at Rs 10.33 crore (up 25.21% YoY) during the period under review.

EBITDA (excluding other income) stood at Rs 16.27 crore in Q4 FY23, registering a decline of 26.01% from Rs 21.99 crore reported in Q4 FY22. EBITDA margin reduced to 13.07% in Q4 FY23 as compared to 22.32% posted in the corresponding quarter previous year.

In financial year ended 31 March 2023, the company's consolidated net profit tumbled 52.6% to Rs 45.49 crore on 2.3% decline in net sales to Rs 423.61 crore.

Phase Transfer Catalysts (PTCs) comprised 34% of the revenue during FY23, reporting a growth 46% YoY. These products are used as catalysts in manufacturing Pharmaceutical APIs, Flavors & Fragrances, Agrochemicals, etc.

Structure Directing Agents (SDAs) comprised 30% of the revenue during FY23. The revenue dropped 43% YoY in financial year ended March 2023. SDAs are the key building blocks for manufacturing high precision zeolite which finds application in Automotive emission control, petrochemicals, continuous flow chemistry, etc.

During FY23, Electrolyte Salts (ES) comprised 4% of the revenue, registering a revenue growth of 191% YoY. ES are used in energy storage devices and super capacitor batteries which find application in automobile, electronics, etc.

Under the Pharma Agro Intermediates and Specialty Chemicals (PASC) segment, the firm has seen a YoY growth of 31%, contributing 32% to the revenue during FY23. PASC finds application in Pharmaceutical APIs, Agro Actives, paints and coatings, Li battery, detergents, personal care products, etc.

Chintan Shah, managing director said, “Despite of all geopolitical uncertainties, the Indian Chemical industry showed good resilience. Many of the challenges are set to persist in 2023. Against a backdrop of fear of global recession and expectation of muted demand till H1FY24, Tatva Chintan continues to remain fairly optimistic on achieving reasonable growth. Most of the key raw material prices have dropped by 15%-25% which is also translating into reduced prices of the finished products. So, this becomes a big challenge for us to achieve revenue growth. Also due to muted global demand across most of the sectors, we are seeing continuous cost pressures coming from customers which would translate into slightly lower spreads on margins.”

He further added, “I feel Tatva Chintan is fortunate with the timing of launch of new products on commercial scale during this financial year and also with the gradual rebound in the SDAs demand. Despite of the challenging year ahead and even with the reduced product pricing we anticipate to grow by 20%-30% in FY24. Also, we anticipate to slightly improve the EBIDTA margins due to forecasted change in the product mix.”

Meanwhile, the company's board has recommended a final dividend of Rs 2 per equity share for the financial year 2022-23, subject to the approval of the shareholders at the ensuing AGM.

Tatva Chintan Pharma Chem is an integrated specialty chemical company, present across the value chain manufacturing phase transfer catalyst, structure directing agents, electrolyte salts and pharma & agrochemical intermediates and specialty chemicals.