Mangalore Refinery Swings to Rs 627 Crore Profit in Q2, Revenue Surges 31%

IG Petrochemicals has reported a significant turnaround in its financial performance for the second quarter of the fiscal year. The company's latest results showcase a robust recovery, marked by substantial profit growth and increased revenue.

Financial Highlights

Metric	Q2 FY24	Q1 FY24	QoQ Change
Consolidated Profit	627.00	-271.00	Turned Positive
Revenue	22,649.00	17,356.00	+30.5%
Operating Income	1,489.00	Not Available	-
EBITDA Margin	6.6%	Not Available	-

The company's performance shows a remarkable improvement, with a swing to profitability and a substantial increase in revenue compared to the previous quarter.

Half-Yearly Performance

For the first half of the fiscal year, IG Petrochemicals reported:

Revenue from operations: Rs 46,941.00 crore (down from Rs 56,075.00 crore in H1 FY23)
Profit: Rs 367.00 crore (compared to a loss in H1 FY23)

Despite the year-on-year decrease in revenue, the company has managed to turn its bottom line from a loss to a profit, indicating improved operational efficiency.

Operational Achievement

IG Petrochemicals' Devangonthi terminal achieved its highest monthly dispatch of 65.40 TKL in September, showcasing operational excellence and improved logistics capabilities.

Market Performance

Closing stock price: Rs 142.10 (+0.77% on the day of reporting)
12-month stock performance: -16.35%

Analyst Outlook

The analyst community appears divided on IG Petrochemicals' prospects:

Recommendations: 2 'buy' and 2 'sell'
Consensus price target: Rs 139.25

This split in analyst opinions suggests a cautious outlook on the company's future performance.

Credit Rating Update

As per the latest LODR data, India Ratings & Research has affirmed and assigned credit ratings for the company's bank loan facilities:

Rating: IND AA-/Stable/IND A1+
Action: Assigned and Affirmed

This credit rating indicates a high degree of safety regarding timely servicing of financial obligations and very low credit risk.

The company's strong financial turnaround, coupled with its stable credit rating, points to a positive outlook for IG Petrochemicals. However, investors should note the mixed analyst recommendations and consider the broader market context when making investment decisions.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.66%	-1.29%	-4.36%	-2.28%	-27.95%	+40.47%

IG Petrochemicals Ltd (IGPL), a leading manufacturer of organic chemicals, has reported a significant decline in its financial performance for the first quarter. The company also announced changes to its business plans, including the liquidation of a subsidiary and an extension for a new plant project.

Financial Performance

IGPL's Q1 results show a substantial year-over-year decline in profitability:

Metric	Q1	Q1 Previous Year	YoY Change
Revenue	₹470.05	₹585.14	-19.7%
EBITDA	₹2.20	₹61.80	-96.4%
EBITDA Margin	0.47%	10.56%	-10.09 pp
Net Loss	₹8.20	₹35.40	-76.8%

The company's revenue decreased by 19.7% to ₹470.05 crore from ₹585.14 crore in the same quarter last year. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) saw a sharp decline of 96.4%, falling to ₹2.20 crore from ₹61.80 crore in the corresponding quarter.

The EBITDA margin contracted significantly to 0.47% from 10.56% in the corresponding quarter of the previous year, indicating pressure on the company's operational efficiency.

Despite the overall decline, IGPL managed to reduce its net loss to ₹8.20 crore, compared to a net loss of ₹35.40 crore in the same period last year, representing a 76.8% improvement in the bottom line.

Business Updates

In addition to the financial results, IGPL's Board of Directors made two key decisions in their meeting:

Subsidiary Liquidation: The company has decided to liquidate IGPL Energy Limited, its wholly-owned subsidiary in the Jebel Ali Free Zone, Dubai. This decision comes as no business operations had commenced in the subsidiary since its incorporation in December 2023.
Plasticizer Plant Timeline Extension: IGPL has extended the timeline for completing its plasticizer plant to December 2025. This project, initially announced in February 2024, has been pushed back.

These decisions reflect IGPL's efforts to streamline operations and adjust its strategic plans in response to current market conditions and business realities.

Conclusion

IG Petrochemicals faces challenges as evidenced by the sharp decline in its Q1 financial performance. The company's decision to liquidate an inactive subsidiary and extend the timeline for its plasticizer plant project suggests a cautious approach to managing resources and capital expenditure in the current economic environment. Investors and industry observers will likely be watching closely to see how IGPL navigates these challenges and works towards improving its financial performance in the coming quarters.