Galaxy Surfactants Limited has announced Q2FY22 PAT at Rs. 41.9 crore for Q2FY22 as against Rs. 81.7 crore in Q2FY21 down by 48.7% YoY. Total volumes stood at 58,814 MT for Q2FY22 as against 63,026 MT in Q2FY21, down by 6.7% YoY. ROW markets declined by 7.1% due to disruptions in international logistics. According to the company, Indian market grew by 0.1% coming off a high base in Q2FY21 as well as due to unavailability of critical feedstocks. AMET market de-grew by 13.3%. AMET volumes were adversely impacted due to on-going Supply Chain constraints and unavailability of critical feedstocks. Performance Surfactants volume stood at 38,023 MT for Q2FY22, down by 8.2% on YoY basis. Specialty Care Products volume stood at 20,791 MT for Q2FY22, down by 3.7% on YoY basis. EBITDA for Q2FY22 stood at Rs. 75.9 Cr as against Rs. 126.1 Cr in Q2FY21, down by 39.8% YoY basis. EBITDA/MT stood at Rs. 12,907 for Q2FY22 as against Rs. 20,006 in Q2FY21, down by 35.5% YoY basis.

H1FY22 Performance

• Total volumes stood at 118,679 MT for H1FY22 as against 114,919 MT in H1FY21, up by 3.3% YoY
• ROW markets grew by 8.8%
• Indian market grew by 13.8%
• AMET market de-grew by 9.7%.
• Performance Surfactants volume stood at 76,801 MT for H1FY22, down by 1.3% on YoY basis
• Specialty Care Products volume stood at 41,878 MT for H1FY22, up by 12.9% on YoY basis
• EBITDA for H1FY22 stood at Rs. 188.9 Cr as against Rs. 217.2 Cr in H1FY21, down by 13.0% YoY basis
• EBITDA/MT stood at Rs. 15,917.7 for H1FY22 as against Rs. 18,902.0 in H1FY21, down by 15.8% YoY basis
• PAT stood at Rs. 118.8 Cr for H1FY22 as against Rs. 138.2 Cr in H1FY21 down by 14.1% YoY

Commenting on the performance, U. Shekhar, Managing Director, Galaxy Surfactants Limited said, "This has been a challenging quarter for us. While the demand scenario remains intact and robust, our ability to service the same got seriously impinged in this quarter. While Q-O-Q the volumes have degrown marginally by 2%, Y-O-Y, we have registered a decline of 7%.

For H-1 while our volumes have grown 3.3%, our EBITDA has declined by 13%. The EBITDA decline is a result of the extreme Supply driven volatility we experienced in Q-2 FY 2021-22 which adversely impacted volumes and margins.

Q-2 began with availability issues with respect to Lauryl Alcohol (sourced from SE Asia which was majorly shut due to the pandemic) and Ethylene Oxide, the two key feedstocks used for manufacturing our Performance Surfactants. This adversely impacted our performance in AMET as well as India. One positive that has emerged in this gloomy environment is the structural uptick we are seeing in our domestic (India) volumes. Despite the heavy base (pent up demand) in Q-2 FY 2020-21 and supply led volatility in Q-2 FY 2021-22, we have Y-O-Y held ground and registered a 1% Q-O-Q growth.

With the shipping industry facing a major overhaul, freight rates have been hitting the sky, with monthon-month rates rising by nearly 10-40%. This, along with the container unavailability issues led to delays in shipment, as well as increased costs which adversely impacted our Specialty Volumes and overall Margins.

Cumulatively put together, the supply side factors adversely impacted our EBITDA by Rs. 20 Crores in this Quarter. The increased lead times combined with volatility in feedstock prices further impacted margins in this quarter.

To conclude, we envisage the current supply driven volatility to continue atleast for next 2-3 quarters. While the situation with respect to availability of feedstocks seems to be normalising, we have now entered the inflationary phase, with prices of some of our critical feedstocks rising nearly 50% in last 1 month.

While the demand scenario continues to remain robust, we do hope normalcy gets restored when it comes to the supply side. At Galaxy while the performance might be muted, we remain fully committed to turn this around."