Revenue beat driven by strong volume growth
Higher RM and freight costs drag margin
* Volumes grew 21% YoY to 83.15k tonne (est. 77.5k tonne).
* Realizations grew 23% YoY to INR327.9k/unit (est. INR318.5k).
* Revenue grew 49% YoY to INR27.3b (est. INR24.7b).
* Gross margin contracted by 3.8pp YoY and 1.2pp QoQ to 46.6% (est. 46%) due to RM cost inflation. RM costs are expected to cool down in 4QFY23.
* EBIDTA margin declined by 9.2pp YoY to 19.6% due to higher RM costs and other expenses (freight costs rose 7.2pp as a percentage of sales). EBIDTA grew 1.5% YoY to INR5.35b (est. INR5.4b). Logistic costs are expected to reduce by the end of 3QFY23 or early 4QFY23.
* Lower other income led to a 11% YoY decline of adjusted PAT to INR3.2b (est. INR3.4b).
* It declared a first interim dividend of INR4/share in FY23.
* The management expects sluggish demand in 2QFY23 due to macro challenges in Europe, coupled with heat waves and inflationary trends in the US.
* It has guided at sales volumes of 320,000-330,000MT in FY23.
* Valuation view: The stock trades at 28.8x/23.6x FY23E/FY24E EPS.
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