Sumitomo Chemicals Q1 Review - Strong All-Round Performance: ICICI Securities
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ICICI Securities Report
Sumitomo Chemicals India Ltd. reported strong Q1 FY22 with revenue growth of 20.7% (two-year revenue compound annual growth rate of 11.8%).
while input prices have increased, the Ebitda margin expanded 80 basis points with better realisations, cost saving initiatives and operating leverage.
It has also continued its focus on reducing the working capital.
It declined to 98 days in FY21 from 112 in FY20. We model the working capital to reduce to 94 days in FY23.
We model the company to gain market shares from smaller players.
It also plans to supply five products to its parent and global affiliates generating revenues of Rs 2-2.5 billion.
We believe outsourcing of products to global group companies offers huge value creation opportunity to Sumitomo India in medium-long term.
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