20 Microns Reports Profit Growth, Approves Malaysian Subsidiary Acquisition
20 Microns Limited reported mixed Q2 FY24 results with a 6.10% increase in net profit to ₹174.00 million, despite a 3.75% decrease in revenue to ₹2.31 billion. The company's EBITDA grew by 4.55% to ₹322.00 million, with EBITDA margin expanding by 114 basis points to 13.96%. The Board approved the acquisition of additional shares in its Malaysian subsidiary, increasing ownership to 100%, aiming for complete control and operational synergies.
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20 Microns Limited , a leading player in the micronized minerals industry, has reported a mixed set of financial results for the second quarter and approved a strategic acquisition to strengthen its international presence.
Financial Highlights
For the quarter ended September 30, 20 Microns reported:
| Metric | Q2 | Q2 Previous Year | YoY Change |
|---|---|---|---|
| Net Profit | ₹174.00 million | ₹164.00 million | +6.10% |
| Revenue | ₹2.31 billion | ₹2.40 billion | -3.75% |
| EBITDA | ₹322.00 million | ₹308.00 million | +4.55% |
| EBITDA Margin | 13.96% | 12.82% | +114 bps |
The company's net profit increased by 6.10% year-over-year to ₹174.00 million, up from ₹164.00 million in the same quarter last year. This growth in profitability came despite a 3.75% decline in revenue, which stood at ₹2.31 billion compared to ₹2.40 billion in the previous year's corresponding quarter.
Improved Operational Efficiency
20 Microns demonstrated enhanced operational efficiency in the quarter, as evidenced by the improvement in its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The EBITDA rose to ₹322.00 million from ₹308.00 million in the corresponding quarter of the previous year, marking a 4.55% increase.
The EBITDA margin also saw a significant improvement, expanding by 114 basis points to reach 13.96%, up from 12.82% in the previous year's quarter. This expansion in margin indicates the company's ability to manage costs effectively and improve its operational performance even in the face of revenue challenges.
Strategic Acquisition in Malaysia
In a significant move, 20 Microns' Board has approved the acquisition of 14 equity shares of its Malaysian subsidiary, 20 Microns (Malaysia) Sdn. Bhd., from minority shareholder Mr. Krishnaji Rao for MYR 14. This acquisition will increase the company's shareholding from 99.9987% to 100%, making it a wholly-owned subsidiary.
The transaction aims to enable complete ownership, effective control, faster decision-making, and strategic operational synergies. One equity share will continue to be held by Mr. Rao as a nominee to comply with Malaysian statutory requirements.
The Malaysian subsidiary is engaged in extraction and processing of high-purity minerals, including acquisition, exploration, development, and operation of quarries and metalliferous lands. This move is expected to strengthen 20 Microns' international presence and potentially contribute to future growth.
Looking Ahead
As 20 Microns navigates through the current fiscal year, the company's performance in the coming quarters could be crucial in determining its trajectory. The micronized minerals industry continues to be an important sector, with applications across various industries including paints, plastics, and ceramics. 20 Microns' ability to improve its operational metrics in a challenging environment, coupled with its strategic moves in international markets, may position it well to capitalize on any upturn in demand across these sectors.
Historical Stock Returns for 20 Microns
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.70% | -3.84% | -13.60% | -14.50% | -26.95% | +473.48% |
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