Shares of Balaji Amines fell 18.5% in morning trade on May 22 as investors shunned the stock after the company underperformed in all three dimensions of profit, revenue and profitability in the fourth quarter.
The company’s net profit fell 56.4% year-on-year to Rs 47.4 crore in January-March, mainly due to headwinds in the global pharmaceutical active pharmaceutical (API) and agri industry sectors.
Slower growth in both segments also weighed heavily on the company’s operating performance as EBITDA margins contracted to 19.8% in the fourth quarter, compared with 25.1% a year earlier. pressure.
On top of that, revenue also disappointed Wall Street as it fell 39.6% to Rs 471.4 crore compared to Rs 780.40 crore in the same period in FY22.
Shares of Balaji Amines fell 10.25% to Rs 2,070 at 10:11 am on the National Stock Exchange. The stock also fell to a 52-week low of Rs 1,880 intraday.
Over-the-counter volumes have also jumped, with 4 lakh shares changing hands on the exchange so far, compared with a one-month daily average of 1 lakh shares.
Despite the weak quarterly numbers, management remains hopeful of an upturn in the coming quarters as they expect to return to growth and achieve EBITDA margins near pre-pandemic levels.
“Apart from this, revenue from newly started plants such as DMC, PG and ethylamine will start to contribute to revenue in the coming quarters, which in turn can improve the company’s margins in Q1FY24,” management said. said in an exchange filing.
Additionally, the stock’s initial plunge also raised concerns as several of the company’s independent directors, Naveena Thammishetty Chandra, Kashinath Revappa Dhole, Satyanarayana Murthy Chavali, Amarender Reddy Minupuri and Vimala Behram Madon, resigned. Hemnath Reddy Goddam also resigned as the company’s chief financial officer and a full-time director to focus on its subsidiary, Balaji Specialty Chemicals.
Nonetheless, the stock recovered some of its losses after the company clarified that most of the resignations were in accordance with SEBI (Securities and Exchange Board of India) regulations. An independent director of the company told CNBC-TV18 that according to SEBI regulations, independent directors have to resign after completing 10 years, which is the reason for the resignation.