InvestorQ : How did GHCL profits grow so sharply in the Q2FY23 quarter?
manisha Kolvenkar made post

How did GHCL profits grow so sharply in the Q2FY23 quarter?

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Crowny Pinto answered.
4 weeks ago
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For the September 2022 quarter GHCL Ltd, which was formerly known as Gujarat Heavy Chemicals Ltd, reported 72% growth in sales revenues at Rs1,381 crore. However, the sales were absolutely flat on a QOQ basis. For Q2FY23, the revenues growth was driven by the inorganic chemicals verticals which saw sales more than double to Rs1,124 crore. At the same time ,the revenues from textiles business were up 10.7% yoy at Rs258 crore. Net cash from operations took a hit in the first half of the year due to a sharp increase in the level of trade receivables and capital locked up in inventories. During the year, the company had hived off its home textiles business to Indo Count Industries, to rationalize operations.

GHCL Ltd

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 1,381.09

₹ 802.83

72.03%

₹ 1,365.21

1.16%

Net Profit (Rs cr)

₹ 292.56

₹ 109.95

166.08%

₹ 355.25

-17.65%

Diluted EPS (Rs)

₹ 30.58

₹ 11.51

₹ 37.18

Net Margins

21.18%

13.70%

26.02%

Net profits for the quarter ended September 2022 surged 166% to Rs292.6 crore although the profits were lower on a sequential basis. However, this sequential fall is more due to the exceptional gains of Rs64 crore from the discontinued operations of the home textiles business recorded in the June 2022 quarter. Operating profits of the inorganic chemicals business grew nearly 4-fold on a yoy basis while the profits from the textiles business actually dipped over last year amidst higher input costs. Net Margins were at 21.18% in Q2FY23 compared to 13.70% in Q2FY22. However, the net margins were lower than the net margins of 26.02% in Q1FY23 quarter, which was largely on account of exceptional gains.

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