Sudarshan Chemical’s Q2 profit falls 70.50% on other-income swing
Revenue grew 3.80% QoQ, but a 22.97-point tax-rate increase and weaker other income pulled consolidated net profit down to Rs 30.5 cr.
Filed 06 Nov 2026, 14:08 IST · Sudarshan Chemical Industries Ltd (SUDARSCHEM)
Key takeaways
- Consolidated net profit fell -70.50% QoQ to Rs 30.5 cr as other income swung to a Rs 60.2 cr loss from Rs 32.2 cr income.
- Revenue grew +3.80% QoQ, but expenses rose +3.87%, narrowing operating margin by 0.06 percentage points to 9.74%.
- Operating margin was 3.11 percentage points below the 12.85% median of 136 reported Commodities peers, while management said demand uptake may appear only in Q4 FY27.
Price around the results
Other-income reversal drove the profit decline
Consolidated revenue rose +3.80% QoQ to Rs 2,742.6 cr, while operating profit increased +3.21% to Rs 267.1 cr. The other-income swing was the main below-operating-line drag, moving from Rs 32.2 cr of income in Q1FY27 to a Rs 60.2 cr loss in Q2FY27; other income therefore contributed -84.31% of Q2 profit before tax. The tax rate also rose 22.97 percentage points to 57.28%, taking net profit down -70.50% to Rs 30.5 cr.
Costs kept operating margin below the peer median
Expenses grew +3.87% QoQ, slightly faster than revenue, so operating margin narrowed by 0.06 percentage points from 9.80% to 9.74%. Management said high raw-material costs and moderate demand were pressuring volumes and margins, while US housing and European construction remained weak and masterbatch demand was volatile. The company said all 19 manufacturing plants were operating well; its 9.74% margin was 3.11 percentage points below the 12.85% median for 136 reported Commodities peers.
Management sees demand recovery later, not immediately
Management said it expects signs of demand uptake only towards Q4 FY27, rather than immediately. It reaffirmed acquired-group guidance of about €700 million in sales and €35 million in EBITDA for FY27. The company said the Alu dyes acquisition is expected to close in January 2027 and described that business as a stable specialty niche with limited competition and a technology moat.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹2,743 cr | ₹2,642 cr | +3.80% |
| Other income | ₹-60 cr | ₹32 cr | — |
| Expenses | ₹2,476 cr | ₹2,383 cr | +3.87% |
| Operating profit | ₹267 cr | ₹259 cr | +3.21% |
| Operating margin (%) | 9.74% | 9.80% | — |
| Interest | ₹42 cr | ₹41 cr | +2.96% |
| Depreciation | ₹94 cr | ₹93 cr | +0.75% |
| Profit before tax | ₹71 cr | ₹157 cr | -54.64% |
| Tax | ₹41 cr | ₹54 cr | -24.26% |
| Net profit | ₹31 cr | ₹103 cr | -70.50% |
| EPS (₹) | ₹13.94 | ₹12.30 | +13.33% |
Operating margin of 9.74% compares with a Commodities sector median of 12.85% across 136 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- All 19 manufacturing plants were operating well.
Guidance & outlook
- The company expects signs of demand uptake only towards Q4 FY27.
- The company reaffirmed FY27 acquired-group guidance of about €700 million sales and €35 million EBITDA.
Expansion
- The Alu dyes acquisition is expected to close in January 2027.
New products
- The company launched Sumicos Luxe Gold SM639, a synthetic mica gold masstone for cosmetics and personal care.
Competition
- The Alu dyes business serves a stable specialty niche with limited competition and a technology moat.
Problems & risks
- US housing and European construction remained weak in Q2 FY27.
- Masterbatch demand was volatile as buyers managed cost volatility.
- Near-term high raw-material costs and moderate demand are pressuring volumes and margins.
What to watch
- Whether operating margin moves back above 9.74% as raw-material costs remain high.
- Whether the tax rate declines from 57.28% after rising 22.97 percentage points QoQ.
- Progress against management’s acquired-group guidance of €700 million sales and €35 million EBITDA, alongside the Alu dyes closing expected in January 2027.