SMC insti on Apcotex Ltd. - Q3FY20 Result
Below Our Estimates at all level (Revenue, EBITDA and PAT)
Apcotex Ltd’s Q3FY20 sales stood at INR 110 Cr reporting de-growth of 33.2% YoY and 11.7% QoQ. The revenues were below our expectations of INR 118 Cr.
EBIDTA margins came in at 0.4% which was much lower than our estimate of 6.8% on account of higher COGS and employee cost as %sales.
Net loss for the qtr at INR 1.4 crs; as against profit of Rs 99 crs in Q3FY19 and Rs 36 crs in Q2FY20. Lack of demand and lower pricing power seems to be taking a toll on the company. We feel the lower demand could continue for few more quarters as both auto and non auto segment are still struggling. Apcotex had attracted investors interest backed by its unique product set but now seems is unable to scale up, while many other large Chemical companies are doing fairly good despite the slow down as the realizations and margins are either improving or holding on.
We will revise our rating post the conference call.