DMCC Speciality Chemicals Limited, India’s leading Sulphur chemistry solutions manufacturer reported its financial performance for Q2 FY24. The company posted net profit of Rs. 2.36 crore in Q2 FY 24 up 185.43% from a loss of Rs. 2.77 crore in Q2 FY23. Net sales at Rs 76.52 crore in quarter ended September 30, 2023 down 26.92% from Rs. 104.71 crore in quarter ended September 30, 2022. EBITDA stands at Rs. 10.34 crore in September 2023 up 158.5% from Rs. 4 crore in September 2022.

Commenting on the Q2 FY24 performance, Bimal Goculdas, Managing Director and CEO, said: “I am pleased to report on our performance for Q2FY24. The period continued to present us with an array of challenges that we have communicated over the past few quarters. The operating environment has remained challenging, particularly impacting our speciality chemicals vertical, which has seen declining demand from our primary markets in Europe and the United States. These regions continue to grapple with economic headwinds, marked by persistent high interest rates and sluggish end-user demand.

“With ongoing discussions with our customers to gauge market conditions, we anticipate that this tepid demand may persist for a few more quarters before we experience a strong rebound. The sustained destocking observed at the customer level over the last two years has led to low inventory levels, underscoring the prevailing uncertainty within the market.

“From an operational standpoint, our bulk chemicals business has maintained optimal capacity utilisation. However, we have encountered margin pressures within this segment. The speciality chemicals vertical continues to face headwinds, exacerbated by aggressive pricing from Chinese imports. Notably, while the agrochemicals industry remains under strain, we have started to see some recovery in demand within the dyes and pigments sector.

“Leveraging this downturn, we have concentrated on fortifying our operational capabilities. We are proud to announce the commencement of our Waste Heat Recovery power plant at the end of August, a significant stride towards energy self-sufficiency. By Q3FY24, this investment will enable us to decrease our reliance on the grid, down to just 10% in Dahej and 25% in Roha, unlocking substantial cost savings and advancing our sustainability agenda. Moreover, our innovation pipeline has been active, and we are on the cusp of commercialising three new products within the speciality chemicals domain. Notably, one such product in the Boron chemistry is poised to serve the automotive fluids market.

“Looking ahead, while we foresee the current market conditions to prevail in the short term, we are strategically positioned to seize future opportunities. Our enhanced capacity, streamlined cost structures, committed team, and upcoming product launches are set to drive growth and profitability as market circumstances improve.”