The chemicals industry in India is thought to have suffered at the hands of the economic slowdown, exemplified by the recent financial results and comments to have emanated from the country's leading manufacturer of chemical intermediates.
Kanoria Chemicals & Industries Limited (KCI) reported net sales of Rs. 374 crore for the 9 months ended 31st December 2008, an increase of 17% compared to Rs. 320 crore in 9MFY08.
EBIDTA of Rs. 81 crore for 9MFY09, compared to Rs. 72 crore in the corresponding period last fiscal period, was also an improvement, however a leading figure within the company also described the 'slowdown in the current macro economic environment' and a 'cascading negative impact' which led to lower realisations.
The company's net profit for 9MFY09 stood at Rs. 7 crore, while operating margin for 9MFY09 was at 21.7%.
After accounting for gain/loss arising from changes in foreign exchange rates, the company made a provision for uncrystallised loss of Rs. 18.62 crore during the 9 months, against unrealised gain of Rs. 7.45 crore in the corresponding 9 months of the previous fiscal period.
Kanoria Chemicals is still optimistic however and Chairman and Managing Direcotor R.V. Kanoria commented, “Industries across sectors have witnessed a slowdown in the current macro economic environment. The Indian chemical industry is no exception and there has been a cascading negative impact which has led to lower realizations.$quot;
$quot;However, longstanding awareness of the cyclic nature of commodity chemicals has prepared KCI to continue operating even in depressed market conditions. The slowdown did not shake us unduly and all our capacity expansion plans are on track. Moreover, a continuous vigil on the cost control measures and increased operational efficiencies have provided some insulation against the slowdown.”