BASF India's Q1 profit falls on sluggish demand, high input costs

BASF India

24/07/2023 09:49

BENGALURU, July 24 (Reuters) - Chemicals maker BASF India  BASF.NS  on Monday reported a fall in its first-quarter profit,
hurt by weak sales and higher input costs.
    The Indian arm of Germany's BASF  BASFn.DE  said its profit for the quarter ended June 30 fell nearly 43% to 1.13 billion rupees
($13.8 million), while sale of products fell to 33.43 billion rupees from 38.58 billion rupees a year ago.
    For further results highlights, click  urn:newsml:reuters.com:*:nFWN3980CW.
    
    KEY CONTEXT
    
    The company has reported a fall in profit for four quarters in a row, with a constant increase in cost of materials consumed.
    Weakness in demand due to inventory destocking and China's reopening has resulted in high channel inventory, and is likely to add
to the pressure on chemical makers including BASF India in the first half of fiscal 2024, according to B&K Securities.
    The large capex program undertaken by most chemical companies may act as a dampener to operating profit, adding to the strain on
the balance sheet and offset the impact of lower input costs, according to analysts. Concerns of recession in European markets as
well as the closure of TDI (toluene diisocyanate) plant also hurt sales.
    
    PEERS COMPARISON 
    
    
                                 Valuation (next 12 months)  Estimates (next 12 months)         Analysts' sentiment         
                  RIC            PE     EV/EBI  Price/Sales  Revenue growth   Profit     Mean rating  No. of    Stock to    Div yield
                                        TDA                                   growth                  analysts  price       (%)
                                                                                                                target      
 BASF India Ltd    BASF.NS       21.24   12.24  NULL              5.37          21.30    Hold                1     0.95          0.31
 Pidilite          PIDI.NS       69.17   46.75  NULL              11.38         34.61    Sell               18     1.11          0.41
 Industries Ltd                                                                                                             
 SRF Ltd           SRFL.NS       25.55   15.83  NULL              12.75         12.60    Buy                25     0.76          0.33
 
    ** The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
    
    ** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
    APRIL-JUNE PERFORMANCE 
    
   
    


($1 = 81.8884 Indian rupees)

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BASF India shares vs peers    https://tmsnrt.rs/44ATZid
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 (Reporting by Manvi Pant in Bengaluru; Editing by Varun H K)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))