Archean Chemical Q3 Review - Strong Volume Beat In Industrial Salt Aided By Recovery In SOP: Axis Securities

Axis Securities Report

Archean Chemical Industries Ltd.'s Q3 FY24 numbers surprised on all fronts, exceeding our expectations. Consolidated Revenue at Rs 413 crore, up by 13%/42% YoY/QoQ, beat our estimate by 39%. Ebitda stood at Rs 145 crore, higher on a QoQ basis (up -9%/52% YoY/QoQ), also surpassing our estimates by 34%. Ebitda margin shot up to 35.25%, up by 238 basis points QoQ.

Archean Chemical Industries profit after tax stood at Rs 102 crore, up by 4%/54% YoY/QoQ, with an overall performance surpassing our estimate by 34%.

Key risks to our estimates and TP

• Emergence of non-halogenated flame retardants may pose a threat to the growth of the Bromine market in the future

• Any delay in capacity in the expansion of Bromine Derivatives or existing projects may affect return on capital employed negatively

• The global slowdown may affect volumes and value growth.

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