Asahi Songwon Colors Limited, India’s leading manufacturer of pigments for ink, plastics, paint, textile and the paper industry has announced consolidated total revenue of Rs. 102.15 crore during Q3 FY23, Q-o-Q growth of 7.17% and Y-o-Y increase of 8.82%.

EBITDA 4.96 crore during the quarter, a Q-o-Q degrowth of 7.98% and Y-o-Y increase of 315.65%; EBITDA Margin stood at 4.86% for Q3 FY24 as compared to 5.65% in Q2 FY23 and (2.45)% in Q3 FY23; and NetProfit stood at (%2.13) Cr, a Q-o-Q decrease of 109.38% and Y-o-Y increase of 76.28%

Commenting on the Q3 FY24 performance, Gokul Jaykrishna, Joint Managing Director and CEO said, “In Q3 FY24, the market demand remained subdued, reflecting the broader industry trends. During the quarter, the company faced an uptick in the cost of raw materials, mainly phthalic anhydride. Despite these cost pressures, the prevailing market conditions and weak demand constrained our ability to adjust our pricing accordingly. This situation led to a marginal contraction in our EBITDA margins when compared to the previous quarter. However the trend is one of cycle bottoming out and compared to Y-o-Y we see good improvement.

In the latter half of the quarter, we observed an improvement in sales volumes. This upward trajectory has persisted into the current quarter, bolstering our confidence in the anticipated recovery and stronger performance of our phthalocyanine business segment in Q4 FY24.

A particularly encouraging development has been the initial signs of recovery in export markets. These emerging ‘green shoots' signal a potential rebound in international demand. While this trend is promising, we adopt a cautious optimism, recognising the need for sustained improvement over subsequent quarters to affirm the sustainability of this recovery."

Arjun G. Jaykrishna, Executive Director said, “In Q3 FY24, we encountered challenges within our Azo and Active Pharmaceutical Ingredients (API) segments. In our Azo business, the period was characterised by sustained subdued demand.Despite the market headwinds, our team has been diligently focusing on enhancing product quality, laying a solid foundation for rapid capacity utilisation escalation once the market conditions normalise."

"The API segment, particularly concerning our key product pregabalin, also experienced declining realisations. In response to these challenges, we have strategically reduced our inventory levels and enhanced our working capital cycle.Notably, we have achieved significant milestones in setting product quality standards for N-2 and N-1,the essential raw materials in pregabalin production," commented Jaykrishna.

"Looking ahead, we are optimistic about reaching an EBITDA break even at our Chhatral site in the first quarter of FY25 itself. Furthermore, we have set an internal target to transition the entire AP! manufacturing process to the new Chhatral site within the next 12 months.This move is expected to further improve our EBITDA margins by leveraging operational efficiencies,” added Jaykrishna.