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The company's net sales increased by 22% to Rs 877.30 crore in Q2 FY22 over Q2 FY21. The company said that while demand remained robust, inability to service the same due to supply side constraints impinged its ability to maximize value.
Consolidated profit before tax slumped 49% to Rs 54 crore in Q2 FY22 from Rs 106 crore in Q2 FY21. EBITDA declined 39.8% to Rs 75.9 crore in Q2 FY22 over Rs 126 crore posted in the same quarter last year. EBITDA margin deteriorated to 8.6% in Q2 FY22 from 17.4% in Q2 FY21.
The company's total volumes stood at 58,814 MT for Q2 FY22 as against 63,026 MT in Q2 FY21, down by 6.7% year on year. EBITDA/MT stood at Rs 12,907 for Q2 FY22 as against Rs 20,006 in Q2FY21, down by 35.5% YoY basis.
Commenting on the performance, U. Shekhar, MD of Galaxy Surfactants said, “This has been a challenging quarter for us. While the demand scenario remains intact and robust, our ability to service the same got seriously impinged in this quarter. While QoQ the volumes have degrown marginally by 2%, Y-O-Y, we have registered a decline of 7%. Q-2 began with availability issues with respect to Lauryl Alcohol (sourced from SE Asia which was majorly shut due to the pandemic) and Ethylene Oxide, the two key feedstocks used for manufacturing our Performance Surfactants. This adversely impacted our performance in AMET as well as India. One positive that has emerged in this gloomy environment is the structural uptick we are seeing in our domestic (India) volumes. With the shipping industry facing a major overhaul, freight rates have been hitting the sky, with month on month rates rising by nearly 10-40%. This, along with the container unavailability issues led to delays in shipment, as well as increased costs which adversely impacted our Specialty Volumes and overall margins.”
He further said, “The supply side factors adversely impacted our EBITDA by Rs. 20 Crores in this Quarter. The increased lead times combined with volatility in feedstock prices further impacted margins in this quarter. To conclude, we envisage the current supply driven volatility to continue atleast for next 2-3 quarters. While the situation with respect to availability of feedstocks seems to be normalising, we have now entered the inflationary phase, with prices of some of our critical feedstocks rising nearly 50% in last 1 month. While the demand scenario continues to remain robust, we do hope normalcy gets restored when it comes to the supply side.”
Galaxy Surfactants Ltd is leading manufacturers of Performance Surfactants and Specialty Care products with over 210 product grades.
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