Alkyl Amines Chemicals Reports 45.7% Drop in Q3 Net Profit Amid Rising Costs

Alkyl Amines Chemicals Limited, a leading manufacturer of aliphatic amines and amine derivatives, has reported a significant decline in its net profit for the quarter ended December 31, 2021. The company's financial performance reflects the challenges faced by the chemical industry, including rising raw material costs and operational expenses.

Financial Highlights

Net Profit: Rs 45.88 crores, down 45.7% from Rs 84.49 crores in the same quarter last year
Revenue from Operations: Rs 376.66 crores, up 16.3% from Rs 323.88 crores year-on-year
Basic Earnings per Share (EPS): Rs 8.98, compared to Rs 16.56 in the previous year
Total Expenses: Increased significantly, with cost of materials consumed rising to Rs 218.54 crores from Rs 127.71 crores

Nine-Month Performance

For the nine-month period:

Net Profit: Declined to Rs 178.51 crores from Rs 202.74 crores
Revenue: Grew to Rs 1,117.16 crores from Rs 860.31 crores

Operational Update

The company announced the capitalization of its Acetonitrile plant at Dahej in December 2021, marking a significant milestone in its expansion efforts.

Financial Analysis

The substantial increase in total expenses, particularly the cost of materials consumed, has significantly impacted the company's profitability. Despite a 16.3% growth in revenue, the net profit margin has contracted due to these rising costs.

Metric	Q3 FY2022 (Rs Crores)	Q3 FY2021 (Rs Crores)	YoY Change (%)
Revenue from Operations	376.66	323.88	16.3%
Net Profit	45.88	84.49	-45.7%
Cost of Materials Consumed	218.54	127.71	71.1%

The table above highlights the stark contrast between revenue growth and profit decline, emphasizing the impact of increased raw material costs on the company's bottom line.

Industry Context

The chemical industry has been facing headwinds due to global supply chain disruptions and volatile raw material prices. Alkyl Amines Chemicals' results reflect these broader market challenges, as evidenced by the squeeze on profit margins despite top-line growth.

Looking Ahead

While the company has successfully increased its revenue, the significant rise in expenses poses a challenge for maintaining profitability. The newly capitalized Acetonitrile plant at Dahej may contribute to future growth and potentially help in managing costs through improved operational efficiencies.

Investors and analysts will be watching closely to see how Alkyl Amines Chemicals navigates these challenges in the coming quarters, particularly in terms of cost management and leveraging its new production capabilities to enhance profitability.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.32%	-4.25%	-5.17%	+4.75%	-16.14%	+36.18%

Alkyl Amines Chemicals Limited, a leading specialty chemicals manufacturer, has released its financial results for the first quarter, showing a mixed performance with revenue growth but margin pressure.

Revenue and Profit

The company reported a revenue of ₹405.53 crore for Q1, marking a slight increase from ₹399.69 crore in the same period last year. This represents a year-over-year growth of approximately 1.46%.

Net profit for the quarter stood at ₹49.44 crore, up from ₹48.87 crore in the corresponding quarter of the previous year, showing a modest increase of about 1.17%.

EBITDA and Margin

Despite the growth in revenue and profit, Alkyl Amines faced some challenges in its operational efficiency:

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) declined to ₹76.50 crore from ₹79.10 crore year-over-year.
The EBITDA margin contracted to 18.90% from 19.79% in the previous year, indicating increased cost pressures.

Operational Highlights

The unaudited financial results, approved by the company's Board of Directors, reveal several key operational aspects:

Metric	Current Quarter (₹ crore)	Previous Year Quarter (₹ crore)
Cost of Materials Consumed	218.31	210.17
Employee Benefit Costs	27.30	25.89
Other Expenses	81.82	83.03

Financial Position

The company's financial position remains robust:

Total Revenue, including other income, stood at ₹413.49 crore for the quarter.
Profit before Tax was ₹66.34 crore, showing a slight increase from ₹65.91 crore in the same period last year.

Investor Metrics

For the quarter, the company reported:

Basic Earnings Per Share (EPS) of ₹9.67
Diluted EPS of ₹9.65

The face value of each share remains at ₹2.00.

Alkyl Amines Chemicals continues to operate within a single business segment of "Specialty Chemicals" as per Indian Accounting Standards.

The financial results were reviewed by the Audit Committee and approved by the Board of Directors. The company's statutory auditors have issued an unmodified limited review report for the quarter.

Investors and analysts will likely be watching how Alkyl Amines Chemicals manages its operational efficiency and cost structures in the coming quarters, given the pressure on margins despite revenue growth.