Shares of specialty chemicals manufacturer Rossari Biotech tumbled as much as 20% on Tuesday despite reporting strong earnings for the December quarter. The stock price dropped 19.2% to hit an intraday low of ₹915 on the Bombay Stock Exchange (BSE) amid a surge in selling activities. The stock was trading close to its 52-week low of ₹908 touched on the same day last year.
The chemical manufacturer on Monday posted a 4% growth in consolidated net profit at ₹22.5 crore in Q3FY22 as against ₹21.6 crore in the same period last year. The revenue from operations more than doubled to ₹428.4 crore as against ₹210 crore in the corresponding quarter last year. The company's consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) rose 37.4% to ₹46.7 crore, from ₹34 crore in the year ago period.
For the nine months ended December 2021, the company registered 26.7% year-on-year growth in net profit at ₹73.3 crore, while revenue from operations surged 112.6% YoY to ₹1,044 crore.
Reacting to Q3 numbers, Rossari Biotech shares opened a tad lower at ₹1,131 against the previous close price of ₹1,132.25. At the time of reporting, the stock was trading 9.2% lower at ₹1,027.75 after declining as much as 19.2% during the session so far. The stock, with a market capitalisation of ₹5,658.4 crore, was trading lower than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.
Commenting on Q3 earnings, in a joint statement, Edward Menezes, promoter & executive chairman, and Sunil Chari, promoter & managing director, said, “We have delivered steady performance during the quarter despite a challenging inflationary macro-environment. Our HPPC business reported healthy Y-o-Y sales growth supported by stable traction in FMCG, anti-viral and personal hygiene product portfolio volumes. TSC and AHN segments also delivered Y-o-Y topline growth driven by a pickup in demand in domestic and export markets.”
As per the company, the third quarter earnings were impacted by raw material volatility which remained during the quarter under review. In order to offset these persistent raw material pressures, the company has been undertaking price hikes wherever possible, it said.
On the outlook for the specialty chemicals industry in India, the company said it is fast progressing with multiple strong growth prospects ahead. “With a strong balance sheet, adequate manufacturing capacities, and a solid product portfolio, we are well-poised to capitalise on the upcoming opportunities in this space. Furthermore, stabilization of the macro-economic environment will enable us to deliver strong performance, going forward,” it added.
During the quarter under review, the company acquired 50.1% stake of Romakk Chemicals effective from December 1, 2021. Romakk has been delivering encouraging performance on the back of increasing demand and volume off-take in the markets, Rossari Biotech said.