Satia Industries Records Strong 9MFY24 EBITDA Margins

Satia Industries Limited (SIL) one of the leading wood and agro-based paper manufacturer in India, announced its results for the third quarter and nine months ended December 31, 2023.

Key Highlights

- Despite a challenging demand environment this quarter coupled with price and YoY revenue declines, the company saw a 17% increase in QoQ revenue to INR 4357 Mn in Q3 of FY24.

- Decline in prices was offset by reduction in raw material prices, safeguarding the gross margins at 55.2% in Q3FY24 as compared to 52.9% in Q3FY23.

- EBITDA for the quarter was INR 922 Mn as compared to INR 864 Mn in Q2FY24 and INR 1,117 Mn in Q3FY23. EBITDA margins declined marginally to 21.2% during Q3FY24 from 23% in Q3FY23. For 9MFY24, EBITDA margins were up by 520 bps at 25.4% and within the range the management's guidance.

- Net profit stood at INR 396 Mn in Q3FY24.

- EPS for the quarter was INR 3.96 during Q3FY24 and INR 17.17 for 9MFY24.

Key Developments

- Satia Industries successfully completed the wood pulping modernization capex.

- The company has strong orders in hand for Q4FY24.

- During 9MFY24, the company has prepaid term loans of INR 651 Mn over and above the repayment of INR 664 Mn.

Commenting on the financial results, Executive Director Mr. Chirag Satia, said: "The current market landscape remains challenging for the industry, with a significant rise in imports disrupting the supply-demand equilibrium while exacerbating competitive pricing pressures on finished goods. For Q3FY24, we recorded revenues of INR 4,357 million.

Despite these conditions, Satia Industries holds a leverage through our orders from the State Textbook Board, which serves as a buffer against these impacts. A robust order book underpins our revenue projections for Q4FY24.

Satia Industries remains steadfast in its commitment to enhancing operational efficiencies and optimising resource utilisation. Our focus lies in pursuing continuous improvement across all projects within our facilities, to adeptly address challenges. The successful completion of our capital expenditure on wood pulping marks a significant achievement for us. Although the facility has commenced operations, we anticipate realising its full advantages in FY25.

Looking ahead, we are ready to leverage our synergies from our strategic initiatives and remain confident in our ability to navigate any external industry challenges. We will strive to deliver value to our shareholders through stable revenues, smart cost management, and strategic investments. We remain optimistic about the future and are excited to witness our trajectory on the back of focused efforts."

Outlook

The company is targeting ~200 bps improvement in the EBITDA margins in FY24 over FY23.

Shares of Satia Industries Limited was last trading in BSE at Rs. 130.25 as compared to the previous close of Rs. 132.95. The total number of shares traded during the day was 37675 in over 707 trades.

The stock hit an intraday high of Rs. 133.80 and intraday low of 128.80. The net turnover during the day was Rs. 4928289.00.

Source : Equity Bulls

Keywords

SatiaIndustries INE170E01023 Q3FY24 9MFY24 ResultUpdate