Sudarshan Chemical Industries Ltd (SUDARSCHEM)
🎯 Key Takeaways
- Sudarshan Chemical Industries is in a strategic transition phase, shifting from integration execution to value capture and margin expansion. Management is prioritizing cost reduction and operational synergies post-acquisition, with gross margins sustained above 50% and net debt reduced to Rs.
- Revenue declined 5.3% QoQ to ₹2,642 in Q1FY27.
- ⚠️ Margin sustainability is at risk if raw material pass-through clauses are reversed and input costs fall, potentially compressing gross margins that ar
📖 The Story
Sudarshan Chemical Industries is in a strategic transition phase, shifting from integration execution to value capture and margin expansion. Management is prioritizing cost reduction and operational synergies post-acquisition, with gross margins sustained above 50% and net debt reduced to Rs.531 Crores. Despite volume pressures and a high P/E of 139.3, the company is targeting 20%+ growth over two years, supported by its expanded global footprint across 19 sites in 11 countries and ongoing SAP integration.
📰 What's Happening
In Q1 FY2027, Sudarshan Chemical reported consolidated revenue of Rs.10,600 Crores, exceeding FY2027 guidance of Rs.9,800-10,200 Crores, driven by strong performance in the acquired pigment business. Business EBITDA rose to Rs.257 Crores, with acquired group EBITDA growing from Rs.65 Crores to Rs.128 Crores. Net debt declined from Rs.922 Crores to Rs.531 Crores, reflecting disciplined capital management. Management highlighted cost reduction as the primary value capture lever and maintained gross margins above 50%, while SAP integration (Project Integra) progresses toward year-end completion. No major new capex is planned, and pricing strategy remains tied to raw material pass-through clauses.
Source: Stock Announcements
📊 Quarterly Results (₹ Cr)
| Metric | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|
| Revenue | 2,507 | 2,387 | 2,103 | 2,790 | 2,642 |
| Operating Profit | 93 | 35 | -63 | 177 | 166 |
| OPM % | 3.7% | 1.5% | -3.0% | 6.3% | 6.3% |
| Net Profit | 55 | 19 | -116 | 83 | 103 |
| EPS | ₹6.00 | ₹1.50 | ₹-14.70 | ₹10.00 | ₹12.30 |
Revenue growth has shown sequential improvement, rising from Rs.2,103 Crores in Dec 2025 to Rs.2,642 Crores in Jun 2026, with operating profit margin stabilizing at 6.3% after a prior decline. Net profit turned positive at Rs.103 Crores in Jun 2026 from a loss of Rs.116 Crores in Dec 2025, indicating early benefits from cost optimization and integration. EBITDA margin expansion aligns with management's focus on profitability post-acquisition, despite flat OPM. The upward trend in revenue and profitability reflects successful integration of the acquired business and cost control measures, supporting the reaffirmed FY2027 guidance.
🔮 Management Outlook & What's Next
Management reaffirmed FY2027 revenue guidance of Rs.9,800-10,200 Crores and EBITDA guidance of Rs.800 Crores, targeting 20%+ growth over two years. They expect value capture to materialize in FY2027-FY2028 through cost reduction and integration progress. Restructuring challenges are anticipated to resolve by year-end, and pricing strategy will remain linked to raw material pass-through, with potential reversals if input costs decline. No major new capex is planned, indicating a focus on operational efficiency over aggressive expansion.
Extracted from official company announcements. Not StockFin.ai's opinion.
🏦 Balance Sheet (₹ Cr)
| Item | Mar 2025 | Mar 2025 | Mar 2026 | Mar 2026 |
|---|---|---|---|---|
| Equity Capital | 14 | 16 | 16 | 16 |
| Reserves | 1,198 | 3,424 | 3,505 | 3,409 |
| Borrowings | 559 | 2,378 | 2,528 | 2,119 |
| Total Liabilities | 2,612 | 9,731 | 9,755 | 9,723 |
| Fixed Assets | 1,031 | 2,820 | 2,916 | 3,012 |
| Investments | 144 | 548 | 539 | 566 |
| Total Assets | 2,612 | 9,731 | 9,755 | 9,723 |
The balance sheet shows a consistent reduction in net debt from Rs.922 Crores to Rs.531 Crores, reflecting proactive deleveraging. Total assets remain stable around Rs.9,750 Crores, while equity and reserves have slightly increased, indicating retained earnings and capital preservation. Borrowings declined from Rs.2,528 Crores to Rs.2,119 Crores, supporting a stronger financial position. This deleveraging aligns with management's stated priority of reducing debt to improve financial flexibility and support long-term growth without over-leveraging the balance sheet.
💰 Cash Flow Statement (₹ Cr)
| Item | Mar 2026 |
|---|---|
| Operating | +344 |
| Investing | +165 |
| Financing | -680 |
| Net Cash Flow | -171 |
👥 Shareholding Pattern
| Category | Q2FY26 | Q3FY26 | Q4FY26 | Q1FY27 |
|---|---|---|---|---|
| Promoters | 8.2% | 8.2% | 8.2% | 8.2% |
| FII | 8.5% | 8.2% | 8.0% | 8.5% |
| DII | 24.2% | 24.6% | 24.9% | 26.4% |
| Public | 47.9% | 47.7% | 47.4% | 44.5% |
| # Shareholders | 63,691 | 58,122 | 55,044 | 57,744 |
Promoter holding remains stable at 8.19% over the past four quarters, indicating no significant stake sale or accumulation. FII ownership has slightly increased from 7.96% to 8.47%, suggesting institutional confidence, while DII rose from 24.18% to 26.43%, reflecting growing interest from domestic institutional investors. Public shareholding has declined slightly from 47.94% to 44.52%, but the number of shareholders has increased to 57,744, indicating broader retail participation. Overall, institutional investors are gradually increasing their stake, signaling confidence in the company's trajectory.
⚖️ Peer Comparison — Chemicals
| Company | MCap (₹ Cr) | P/E | ROCE | ROE | D/E |
|---|---|---|---|---|---|
| PIDILITIND | 1.67 L Cr | 63.2 | 33.4% | 24.7% | 0.01 |
| SRF | 75,831 | 35.1 | 15.6% | 15.4% | 0.36 |
| LINDEINDIA | 54,443 | 99.7 | 17.5% | 12.8% | 0.00 |
| FLUOROCHEM | 51,528 | 84.2 | 9.6% | 7.7% | 0.34 |
| NAVINFLUOR | 44,502 | 56.3 | 22.2% | 19.9% | 0.31 |
| GODREJIND | 38,256 | 32.5 | 9.2% | 19.8% | 4.57 |
| HSCL | 33,181 | 41.2 | 20.7% | 17.1% | 0.16 |
| DEEPAKNTR | 23,850 | 30.4 | 15.3% | 13.4% | 0.26 |
| AETHER | 22,459 | 95.2 | 13.8% | 10.6% | 0.08 |
| AARTIIND | 19,021 | 35.8 | 9.2% | 9.5% | 0.68 |
🔗 Peer Stock Analyses
⚠️ Risk Factors
1. Margin sustainability is at risk if raw material pass-through clauses are reversed and input costs fall, potentially compressing gross margins that are currently above 50%. 2. Integration execution remains critical — delays in SAP integration (Project Integra) could hinder cost reduction targets. 3. Volume growth is constrained by market conditions, limiting top-line expansion despite guidance reaffirmation. 4. High P/E (139.3) and low ROE (2.6%) suggest market skepticism about near-term profitability, making the stock vulnerable to earnings misses.
📋 Recent Filings
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🔴 Corporate Action 28 August 2026Sudarshan Chemical Industries announced the allotment of 8,781 equity shares under its 2018 Employee Stock Option Plan, approved by the Allotment Comm...
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🟡 corporate governance 27 August 2026Sudarshan Chemical Industries announced the launch of its new high-performance pigment product Sudaperm Violet 3040C on 27 August 2026, targeting both...
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Announcement 25 August 2026Sudarshan Chemical Industries announced it will acquire Clariant's Muttenz aluminium dyes plant in Switzerland under a definitive agreement, securing ...
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🔴 Announcement 25 August 2026Sudarshan Chemical Industries announced it has signed a definitive agreement to acquire Clariant Additives' aluminium dyes and chemicals manufacturing...
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🔴 Financial Results 20 August 2026Sudarshan Chemical reported Q1 FY2027 revenue of Rs.10,600 Crores, exceeding the FY2027 guidance range of Rs.9,800-10,200 Crores, with business EBITDA...
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🟡 Board Meeting 19 August 2026Sudarshan Chemical Industries Limited announced the voting results from its 75th Annual General Meeting held on 18 August 2026, where shareholders app...
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🟡 Board Meeting 18 August 2026Sudarshan Chemical Industries held its 75th Annual General Meeting on 18 August 2026 via video conference, confirming quorum and director attendance. ...
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🔴 Financial Results 13 August 2026Sudarshan Chemical Industries reported consolidated revenue of ₹628 crore for Q1 FY27, up 22.3% year-on-year, driven by strong performance in the acqu...
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🔴 Announcement 12 August 2026Sudarshan Chemical Industries announced on 12 August 2026 that its board approved unaudited Q1 FY2026 results showing profit for quarter at ₹57.8 cror...
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🟡 Board Meeting 12 August 2026The Board of Sudarshan Chemical Industries approved unaudited Q1 FY2026 financial results and an in-principle acquisition of 70.26% in Sudarshan Color...
🧠 Analyst's Read
Sudarshan Chemical is executing a disciplined turnaround focused on integration, cost control, and debt reduction, with improving profitability and stable guidance. Investors should monitor margin trends amid raw material volatility and the pace of SAP integration to assess progress toward long-term value capture.
Based on filing content and financial data. Not a recommendation.
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Data sourced from stock announcements. Analysis generated by StockFin.ai.
For informational purposes only — not investment advice. Updated 2026-09-01.
Editorial & Data Transparency Notice
This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.
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