Asahi Songwon Colors Limited, India's leading manufacturer of pigments for ink, plastics, paint, textile and the paper industry has announced its financial results for the fourth quarter ended March 31%, 2024.

During Q4 FY24, Asahi SongwonColors reported total revenue of Rs. 125.97 crore, a Q-o-Q growth of 23.31% and Y-o-Y increase of 1.77%. EBITDA was Rs. 8.78 crore during the quarter, a Q-o-Q growth of 76.79% and Y-o-Y increase of 203.48%. EBITDA margin stood at 6.97% for Q4FY24 as compared to 4.86% in Q3FY24 and (6.86) % in Q4FY23. Net Profit stood at Rs. 0.91 crore, a Q-o-Q increase of 142.58% and Y-o-Y increase of 107.78%

For the Financial Year ended March 31, 2024, Asahi SongwonColors’ total revenue was Rs. 426.24 crore during the year under review, Y-o-Y decrease of 15.52%. EBITDA was Rs. 18.26 croreduring the year, a Y-o-Y increase of 245.62%. Net Profit stood at Rs. 15.64 crore (including exceptional income), a Y-o-Y increase of 184.66%.

Commenting on the Q4FY24 performance, Gokul Jaykrishna, Joint Managing Director and CEO, said, "I am pleased to provide an update on the performance of our blue pigment business for the quarter gone by. In line with our earlier guidance, the blue pigment segment has reported a strong performance. The inventory destocking phase has come to an end, and the value chain now maintains low inventory levels. This has resulted in higher demand compared to previous quarters.

Additionally, the current market demand has allowed us to pass on the increased costs of raw materials to our customers, which has helped us regain our profitability margins. Although we are still below our long-term average margins in this business, the situation is improving with each passing quarter.

We are confident about an improved performance of the blue pigment business in the current financial year."

Arjun G. Jaykrishna, Executive Director, commented, "I am pleased to provide an update on the Company's performance for the past quarter. Our phthalocyanine business is exhibiting promising signs of recovery, although challenges persist in terms of demand within our Azo business. While our performance has improved compared to previous quarters, it remains below our expectations.

The situation in the Azo business is gradually improving, with capacity utilisation now approaching 65%. However, subdued demand continues to impact the profitability of this segment, thereby affecting the overall business performance.

Due to the challenging market environment, we have temporarily halted the debottlenecking of our yellow pigment capacity. We will reassess this decision once there is a noticeable improvement in demand.

On the API front, we are pleased to announce the commencement of commercial production at our Chattral site for API intermediates, which are currently being fully consumed internally. Trial runs for the APIs have also commenced, and we anticipate beginning commercial production shortly. 

Additionally, we have acquired the remaining 22% stake in Atlas Life Sciences for a consideration of 9.65 crores, fully funded through internal accruals. Consequently, Atlas Life Sciences is now a wholly-owned subsidiary of Asahi Songwon Colors. The backward integration through intermediates has enhanced our profitability in the API business. However, the losses from the Azo segment continue to mask the overall profitability on a consolidated basis.

Looking ahead, we are confident in the improvement of both the Azo and API businesses and are optimistic that these segments will start contributing positively to our profitability in the current financial year."