Nikhil Adhesives Reports Q2 Results, Announces Board Restructuring and AGM Date
Nikhil Adhesives Limited reported a 23.39% decrease in revenue to Rs. 12,347.14 lakhs and a 29.20% drop in net profit to Rs. 356.74 lakhs for Q2 ended June 30. The company plans to reduce its trading division and focus on manufacturing operations. Board committees have been restructured, and a Risk Management Committee voluntarily adopted. The 39th AGM is scheduled for September 23, with proposals for new statutory and secretarial auditors. Nikhil Adhesives has also changed its inventory valuation method from FIFO to Weighted Average and Standard Cost methods.
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Nikhil Adhesives Limited , a leading manufacturer of adhesives, binders, and chemicals, has released its financial results for the second quarter, revealing a decline in revenue and profit compared to the same period last year. The company has also announced significant changes to its board structure and set the date for its upcoming Annual General Meeting (AGM).
Financial Performance
For the quarter ended June 30, Nikhil Adhesives reported:
| Particulars (Rs. in Lakhs) | Q2 Current | Q2 Previous | YoY Change |
|---|---|---|---|
| Revenue from Operations | 12,347.14 | 16,116.64 | -23.39% |
| Net Profit | 356.74 | 503.86 | -29.20% |
| Basic EPS (Rs.) | 0.78 | 1.10 | -29.09% |
The company's revenue from operations decreased by 23.39% to Rs. 12,347.14 lakhs, down from Rs. 16,116.64 lakhs in the same quarter last year. Net profit also saw a decline of 29.20%, falling to Rs. 356.74 lakhs from Rs. 503.86 lakhs in the previous year's corresponding quarter.
Strategic Shift in Operations
Nikhil Adhesives has announced a strategic decision to reduce its trading division and focus more on its manufacturing operations. This move comes in response to prevailing market conditions, as stated in the company's financial report.
Board Restructuring and Committee Changes
The Board of Directors has approved a significant restructuring of its committees, effective August 8. The changes include:
- Reconstitution of the Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, and Corporate Social Responsibility Committee.
- Voluntary adoption of a Risk Management Committee.
Annual General Meeting and Auditor Appointments
Nikhil Adhesives has scheduled its 39th Annual General Meeting for September 23, to be held virtually through video conferencing. Key points include:
- The Board has recommended the appointment of PHD & Associates as statutory auditors for a five-year term from FY 2025-26 to FY 2029-30, subject to shareholder approval.
- M/S Somani & Associates has been proposed as secretarial auditors for a five-year term, pending AGM approval.
Change in Accounting Policy
The company has implemented a change in its accounting policy for inventory valuation. Effective April 1, Nikhil Adhesives has shifted from the FIFO (First-In-First-Out) method to:
- Weighted Average method for Raw Materials and Packing Materials
- Standard Cost method for other materials
This change aims to better reflect the actual cost flows and improve comparability with industry peers. The company has retrospectively applied this change, resulting in a cumulative effect on retained earnings of Rs. 59.82 lakhs as of April 1 of the previous year.
Outlook
While Nikhil Adhesives faces challenges reflected in its Q2 results, the company's strategic decisions to focus on manufacturing and restructure its board committees indicate efforts to adapt to market conditions and strengthen corporate governance. The upcoming AGM and proposed auditor appointments suggest a focus on maintaining transparency and accountability in its operations.
Historical Stock Returns for Nikhil Adhesive
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.79% | -4.00% | -16.22% | -1.29% | -21.86% | -51.89% |
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