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Informist, Saturday, Jul. 5, 2025

 

By Gopika Balasubramanium

 

MUMBAI – The aggregate net profit of chemical companies part of the Nifty 200 index could not beat analysts' estimate for the sector despite a robust increase in UPL Ltd.'s bottom line. Their aggregate net profit grew 10% on year for the March quarter compared to 17% estimated by analysts. When UPL is excluded, the seven companies reported an over 23?ll in their net profit against analysts' expectation of a 13?ll.

The bottom line of the four chemical companies part of the Nifty 200 index – Pidilite Industries Ltd., Solar Industries India Ltd., SRF Ltd. and UPL Ltd. – grew faster than analysts' sector estimate of a 17% growth for the quarter-ended March. In contrast, only Solar Industries achieved this feat in the December quarter.

There were no estimates available for Fertilisers and Chemicals Travancore Ltd. – the ninth chemical company part of the Nifty 200. Including FACT, the net profit of the nine Nifty 200 chemical companies rose over 8% and their revenue grew 11% for the March quarter. Only three chemical companies' profits beat analysts' estimates. 

Excluding one-time cost, Asian Paints Ltd.'s net profit saw a sharp drop for the March quarter. The paint major's net profit fell 30%. In the same quarter, Grasim Industries Ltd. and Tata Chemicals Ltd. reported a net loss. The net profit of PI Industries Ltd. rose only marginally on year for the quarter ended March, yet was better than analysts' estimate of a 10?cline. 

At the aggregate level, the top line of the eight chemical companies grew nearly 11% for the March quarter. Analysts had expected the sector's top line to grow 10% on year. Of these eight, only the top lines of Solar Industries, SRF, UPL and Grasim Industries grew faster than 10%. For the March quarter, on an year-on-year basis, revenue of Solar Industries grew 34%, SRF grew 20%, UPL grew 11%, and that of Grasim Industries rose 31%. When it comes to top line, only four of these eight exceeded company-level analyst forecast.

 

HOW COMPANIES FARED

 

UPL's adjusted net profit grew over eight times on year for the March quarter to INR 11.71 billion, while analysts had expected it to report the measure at INR 11.14 billion. The company's net profit accounted for nearly 33% of the aggregate net profit of these eight chemical companies, determining the performance of the sector. UPL had a one-time cost of INR 2.75 billion, including this, the company's net profit would have been INR 8.9 billion, lower than analysts' estimate for the company. The company's bottom line grew mainly due to a low base, growth in sales volume, and robust performance across segments.  

The top line growth of Grasim and Solar Industries exceeded estimates for sector-level growth by a wide margin.

 

Solar Industries, one among the country's largest defence equipment manufacturers, reported a 37% rise in adjusted net profit to INR 3.2 billion, supported by a healthy order book. The company was also an outperformer in terms of aggregate net sales growth. Analysts expected the sector's revenue growth to be 10%. In contrast, Solar Industries' net sales grew 35% to around INR 22 billion. The defence equipment maker also beat analyst estimates for the company, which was INR 20.6 billion. This was mainly due to doubling of revenue from defence segment and revenue from international, respectively. 

The other company which beat net sales estimate for the sector, was Aditya Birla group's flagship chemicals company Grasim. Its revenue grew 32% on year to INR 89 billion. Grasim also beat company-level analyst estimate of INR over 86 billion revenue. This was led by superior performance mainly in building materials, chemicals, and financial services businesses.

 

LAGGARDS
While Grasim outperformed the sector-level revenue estimate, it was the biggest laggard when it comes to bottom line forecasts. The company had reported a net loss for the quarter ended March, same as Tata Chemicals. To recap, analysts had estimated the sector's bottom line to grow 17% on year.

Grasim reported a net loss of INR 2.8 billion, sharply wider than analysts' estimate of INR 1.3 billion loss. This was mainly because expenses rose at a higher pace than its sales and also due to a one-time cost of INR 1.1 billion. Adjusted to the one-time cost, the net loss was INR 1.74 billion, still higher than the estimated loss.  

 

When it comes to net sales, Asian Paints and Tata Chemicals failed to beat sector-level estimates.

Tata Chemicals' net sales grew barely by half a percentage point to INR 35 billion, lower than INR 36 billion expected by analysts for the company. This was mainly due to lower prices of soda ash across geographies, along with demand-supply imbalances, and uncertainties in soda ash trade due to tariff changes.

 

Asian Paints lagged behind all the eight in terms of topline growth, missing the sector estimate for sales, as its net sales declined for the March quarter. The company's net sales fell over 4% to INR 83.59 billion, also missing the consensus estimate of INR 85.9 billion. The net sales declined as a result of increased competition, slackening demand, and a fall in domestic decorative paints sales.

Tata Chemicals' net loss for the March quarter narrowed sharply on year to INR 560 million. Analysts had expected the company to report a net profit of INR 1.3 billion. Loss in the quarter was owing to a write-down of assets aggregating INR 9.6 billion in the UK. Adjusted to exceptional items, the company's net loss for the quarter was INR 10 million. 

 

 

The following table shows the performance of eight companies in the chemical sector vis-a-vis the consensus estimate for each company as well as against the consensus estimate for the chemical sector and the Nifty 200 index.

 

 

Company

PAT beat analysts' estimate

Adjusted YoY PAT growth %

Adjusted YoY PAT growth estimate %

PAT beat sector estimate

PAT beat Nifty 200 estimate

Revenue beat analysts' estimate

Revenue YoY growth %

Revenue YoY growth estimate %

Revenue beat sector e stimate

Revenue beat Nifty 200 estimate

Chemical Sector

--

10.00

17.4

NO

--

--

11.40

10.40

YES

--

Nifty 200

--

11.70

(-)3.04

--

--

--

6.90

6.20

--

--

Asian Paints

NO

-30.37

(-)15.46

NO

NO

NO

-4.26

-1.62

NO

NO

Grasim Industries

NO

N.A.

N.A.

N.A.

NO

YES

31.89

27.77

YES

YES

PI Industries

YES

0.36

(-)9.52

NO

YES

NO

1.35

13.65

NO

NO

Pidilite Industries

YES

20.15

20.00

YES

YES

NO

8.25

8.93

NO

YES

Solar Industries India

NO

37.09

42.25

YES

YES

YES

34.51

27.71

YES

YES

SRF

YES

24.60

14.13

YES

YES

YES

20.83

13.62

YES

YES

Tata Chemicals

N.A.

N.A.

(-)3.48

NO

NO

NO

0.98

3.72

NO

NO

UPL

YES

707.59

668.46

YES

YES

YES

10.62

8.15

YES

YES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the profit margins of eight chemical companies that are a part of the Nifty 200.

 

Company	PAT Margin for Mar-25        (%)	PAT Margin for Mar-24         (%)	PAT Margin for Dec-24         (%)
Chemicals sector	6.01	6.55	8.20
Asian Paints	10.47	14.39	12.99
Grasim Industries	-1.95	4.06	-2.08
PI Industries	23.41	23.64	23.81
Pidilite Industries	14.24	12.83	16.40
Solar Industries India	14.87	14.59	15.96
SRF	12.20	11.83	7.76
Tata Chemicals	-0.03	3.91	0.47
UPL	7.52	1.03	8.29

 

End

 

Data compiled by Vinod Bhovad

Edited by Deepshikha Bhardwaj

 

 

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