GHCL reports 50% fall in net revenue for Q1FY21

GHCL, India’s leading chemical and textile company, announced its financial results for Q1FY21. Commenting on the financial performance, RS Jalan, Managing Director, GHCL said, “As the global COVID crises evolves even further, we are now witnessing a wider impact on economies across the world. These are trying and uncertain times and understandably, there is a sense of unease and concern. At GHCL, we continue to be focused and agile, adapting to the “New Normal”. It is heartening to note that operating activities have increased due to a demand uptick in all our business segments. We are hopeful that in the upcoming quarter the utilisation levels will improve further by 10 to 15 per cent across all verticals and we will continue to create value for our stakeholders.”

Also read: GHCL net revenue for Q3FY20 down by 4%

Q1FY21 v/s Q1 FY 20 (standalone performance)

• Net revenue for Q1FY21 is at Rs 440 crore as compared to Rs 879 crore in the corresponding quarter ended June 30, 2019.
• EBIDTA is at Rs 84 crore as compared to Rs 222 crore in the corresponding quarter last year.
• Net profit (PAT) is at Rs 17 crore as against Rs 103 crore in the first quarter last fiscal.
• Covid-19 outbreak has affected the overall business activities of the company resulting in lower operating activity.

Business segments (Q1FY21 v/s Q1FY20)

• Inorganics chemicals division’s revenue is Rs 346 crore in Q1 FY21 as compared to Rs 588 crore in the corresponding quarter in FY20.
• Textiles business revenue ­­­­at Rs 94 crore in Q1FY 21 as compared to Rs 262 crore in the corresponding quarter in FY 20.

Inorganic Chemicals
There has been a decent recovery in the demand of downstream sectors, whereas detergent has shown the fastest recovery, flat glass units have restarted recently. We expect the demand to improve by 10 to 15 per cent from the current levels in the next quarter. However owing to global oversupply situation, soda ash pricing may remain soft.

Textiles
Q1FY21 witnessed a slow start due to lockdown restrictions resulting in subdued demand. We believe that the pandemic will result in shifting of supply chain from China to India that will benefit both the Spinning and Home Textiles. Also with the restrictions now easing out, the demand for garments and home furnishings is likely to improve. We expect a quarter on quarter improvement beginning Q2 this year.

GHCL is a well-diversified group with an ascertained footprint in chemicals, textiles and consumer products segment. In chemicals, the company mainly manufactures Soda Ash (Anhydrous Sodium Carbonate) that is a major raw material for detergents & glass industries and Sodium Bicarbonate (baking soda). In textiles, the Company has an integrated set up, which commences right from spinning of fiber (yarn), weaving, dyeing, printing of the finished products, like sheets and duvets, primarily exported worldwide. Consumer Products operation is another business for GHCL where it is manufacturing and selling edible salt, industrial grade salt and markets jujube honey, spices and blended spices in the country under the brand name of i-Flo.

At GHCL, sustainability is a core element of our business strategy as defined under the aegis of ‘GHCL Way’ with its four pillars i.e. Responsible Stewardship, Social Inclusiveness, Promoting Relationship and Adding Value.  We are committed to working closely with our stakeholders at our various plant locations for promoting the agenda of sustainability underpin on GHCL Ltd core values of Respect, Trust, Ownership and Integrated Teamwork.