Sumitomo Chemical Q4 Review - On The Cusp Of New Growth Cycle: Prabhudas Lilladher
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Prabhudas Lilladher Report
Sumitomo Chemicals India Ltd. reported better than expected set of results driven by higher than anticipated demand.
Gross margins expansion was lower than expected, but operating leverage benefit drove 393 basis points (our estimate 237 basis points) improvement in Ebitda margin to 13.4%.
Lower effective tax rate at 12% aided profit after tax growth.
The management plans to invest Rs 1.0-1.1 billion between FY22-FY23 for manufacturing five proprietary technical grade artificial intelligence for Sumitomo Chemical Company.
The revenue potential from these molecules is Rs 2.0-2.5 billion per annum, however these products have growing global demand and potential to add further capacities in the medium term.
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