Sumitomo Chemical Shares Soars Over 9% to 52-Week High as Q4 Profit Jumps 52%

Shares of Sumitomo Chemical India surged by over 9% on Tuesday, reaching a 52-week high after the company reported strong financial results for the quarter ending March 2024 (Q4FY24). This marks the sixth consecutive session of gains for the stock, which has risen nearly 19% during this period.

The stock climbed as much as 9.3%, reaching ₹482, its highest level in a year. After today’s increase, the stock is now up more than 43% from its 52-week low of ₹336.40, recorded on March 14, 2024. Over the past year, the stock has gained over 12% and has risen more than 19% in 2024 so far.

In May alone, the stock has jumped 19%, following a 15.3% increase in April. However, it experienced declines of 7% in March and 10% in February. Before that, it saw a modest increase of around 3% in January.

For the March quarter, Sumitomo Chemical reported a 52% increase in its consolidated net profit, reaching ₹109.89 crore compared to ₹72.12 crore in the same period last year. Its total income rose slightly to ₹700.90 crore from ₹668.05 crore in the year-ago quarter.

On the operational front, EBITDA grew by 73.9% to ₹140 crore in Q4FY24, with the margin improving to 20.8% from 12.4% in the same quarter last year.

For the entire financial year 2023-24 (FY24), the company’s net profit declined by over 26% to ₹369.74 crore from ₹502.20 crore in FY23. Total income also fell by 17% to ₹2,939.61 crore in FY24, down from ₹3,555.81 crore in FY23.

“Over the past two years (FY22 & FY23), we experienced favorable business conditions. Our focus was on maximizing performance and exceeding expectations. Building on this momentum, we initiated several strategic actions aimed at ensuring sustained growth and long-term success,” the company stated in its investor presentation.

The company noted that in FY24, the global and Indian agro-solution sectors faced several significant challenges, including adverse weather, poor demand, inventory reductions, price volatility, supply chain disruptions, and geopolitical issues. Most of these challenges appear to be temporary, and the situation is expected to normalize in the short term. The growth potential for the agro-solution sector, especially in high-growth markets like India, remains positive in the medium to long term.

Despite these significant challenges in FY24, the company’s strategic focus on minimizing adverse impacts and driving operational efficiencies enabled it to deliver resilient performance.

Sumitomo Chemical India Limited is engaged in the manufacturing and sales of household insecticides, agricultural pesticides, public health insecticides, and animal nutrition products. The company operates through the Agro Chemicals segment, which includes crop protection products, plant growth nutrients, composts, and fertilizers. It serves markets in North America, Latin America, Europe, Asia, Australia, Africa, and India.