Sumitomo Chemical stock jumps over 9% to 52-week high as profit jumps 52% in Q4

Shares of Sumitomo Chemical India surged over 9 percent in intra-day deals on Tuesday to hit their 52-week peak after the company posted strong results for the quarter ended March 2024 (Q4FY24) yesterday. This is the sixth straight session of gain for the stock, gaining almost 19 percent in this time.

The stock rallied as much as 9.3 percent to its 1 year-high of ₹482. Post today's jump, it has now advanced over 43 percent from its 52-week low of ₹336.40, hit on March 14, 2024. The stock has gained over 12 percent in the last one year and risen over 19 percent in 2024 YTD.

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The scrip has jumped 19 percent in May so far following a 15.3 percent increase in April. However, it fell 7 percent and 10 percent in March and February, respectively. Before that, it added around 3 percent in January this year.

In the March quarter, the company posted a 52 percent increase in its consolidated net profit at ₹109.89 crore versus ₹72.12 crore in the year-ago period. Meanwhile, its total income rose marginally to ₹700.90 crore in the quarter under review from ₹668.05 crore in the corresponding period of the preceding year.

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On the operating front, EBITDA grew 73.9 percent to ₹140 crore in Q4FY24 while the margin rose to 20.8 percent in the quarter under review versus 12.4 percent in the same quarter last year.

Overall, in the financial year 2023-24 (FY24), the company's net profit declined over 26 percent to ₹369.74 crore from ₹502.20 crore in the preceding year FY23. Whereas, total income fell 17 percent to ₹2,939.61 crore in FY24 as against ₹3,555.81 crore in FY23.

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"Over the preceding two years (FY22 & FY23), the company had experienced a positive business environment. Our primary focus during this period was to maximize performance in such favorable conditions and exceed expectations. Building on this momentum, we had taken several strategic initiatives aimed at ensuring sustained growth and long-term success," said the firm in its investor presentation.

It further stated that in FY24, the agro-solution sector globally and in India faced several extraordinarily challenging situations (mainly adverse weather, poor demand, inventory reductions, downward price volatility, and supply chain disruptions along with several geo-political situations. Most of these appear to be temporary one-time factors and the situation is expected to normalise in the short term. The growth potential of the agro-solution sector and especially high-growth markets like India continues to be positive in the medium to long term.

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Despite facing significant headwinds in FY24, its strategic focus was on minimising adverse impacts and driving operational efficiencies that enabled it to provide resilience performance, the firm said.

Sumitomo Chemical India Limited is an India-based company that is primarily engaged in manufacturing and sales of household insecticides, agricultural pesticides, public health insecticides and animal nutrition products. The company operates through Agro Chemicals segment. It comprises crop protection products, plant growth nutrients, composts and fertilisers. The company serves markets, including North America, Latin America, Europe, Asia, Australia, Africa and India.