Shares of Fineotex Chemicals hit a new high of Rs 273.55, as they rallied 9 per cent on the BSE in Friday’s intra-day trade extending gains after the company reported a strong set of numbers for the quarter ended June 2022 (Q1FY23).
In the past two months, the stock of the specialty chemicals has zoomed 72 per cent. In the last one month, it soared 40 per cent, as compared to a 10 per cent rise in the S&P BSE Sensex.
Fineotex Chemicals is engaged in the business of manufacturing of Textile chemicals, auxiliaries and specialty chemicals. The textile industry is the largest consumer of the company’s specialty chemicals. The company has major textile brands as trusted customers and product quality have a good brand recall. The company’s export portfolio includes more than 60 nations.
In Q1FY23, Fineotex Chemicals reported 115 per cent year-on-year (YoY) jump in its consolidated revenue at Rs 135.8 crore. Earnings before interest, taxes, depreciation, and amortization (ebitda) grew 167 per cent YoY at Rs 26.20 crore., while margin expanded 381 bps YoY to 19.3 per cent. The company’s consolidated profit after tax rose 110 per cent YoY at Rs 20.3 crore.
Specialty chemical companies in India have started accelerating their capex plan on the back of strong growth visibility and emerging opportunities. The sector constitutes 22 per cent of the total chemicals and petrochemicals market in India.
A revival in domestic demand and robust exports owing to higher realisations and rising crude oil prices will spur a 50 per cent YoY increase in the capex of this sector in FY22 to Rs 6,000 – 6,200 crore. The rise in demand from end-user industries such as food processing, personal care and home care will drive different segments of specialty chemicals market, Fineotex Chemicals said in FY22 annual report.
The Government of India’s a production-linked incentive (PLI) scheme in the chemical sector will boost domestic manufacturing and exports, the report added.