Satia Industries announces strategic expansion initiatives worth Rs. 350 Cr. Net profit contracted 39% YoY to Rs. 511 Mn during Q1FY25

Satia Industries announces strategic expansion initiatives worth Rs. 350 Cr. Net profit contracted 39% YoY to Rs. 511 Mn during Q1FY25
Key Highlights :
• SIL will be renovating its PM3, which will further enhance production capacity.
• Reflecting the broader industry trend and demand, the company's revenue contracted 17% YoY to INR 3,994 Mn during Q1FY25 as compared to INR 4,812 Mn during Q1FY24. 
• Substantial reductions in raw material prices contributed significantly to the sequential improvement in gross margins, which increased from 56.0% in Q4FY24 to 59.1% in Q1FY25. 
• EBITDA for Q1FY25 was INR 1,107 Mn as compared to INR 1,493 Mn in Q1FY24. Our relationships with state textbook boards have helped us clocking better pricing amidst the industry challenges. In addition, our tight control on costs and operational efficiencies led to improvement in EBITDA margin which moved to 27.7% in Q1FY25 from 21.1% in Q4FY24. 
• Net profit stood at INR 511 Mn in Q1FY25, vs INR 841 Mn in Q1FY24 and INR 394 Mn in Q4FY24.

The Pulp and Paper Times | 12th August 2024

Satia Industries Limited (SIL), one of the leading wood and agro-based paper manufacturers in India, announced its results for the first quarter ended June 30, 2024. SIL earned a net profit of INR 511 Mn in Q1FY25, compared to INR 841 Mn in Q1FY24 and INR 394 Mn in Q4FY24. SIL reported a steady volume of 53,648 MT despite a challenging macro environment.

“Despite the seasonal downturn typical of June, demand was strong. While industry-wide prices and volumes declined, our company experienced a less severe impact on pricing. In tandem with the industry, our sales volume decreased slightly, resulting in a corresponding moderation of dispatches. This led to a slight decline in our revenues to INR 3,994 Mn for Q1 FY25.

Our unwavering focus on cost management has yielded impressive results. The significant drop in agro pulp prices, particularly wheat straw, coupled with the substantial reduction in fuel costs through our efficient rice straw boilers, positively impacted our bottom line. While the price of imported wood pulp increased, the overall cost structure benefited from these savings, leading to a noteworthy improvement in our EBITDA margins,” said Mr. Chirag Satia, Executive Director of Satia Industries Limited, commenting on the financial results.

Mr. Satia added, "Furthermore, we are beginning to witness the early impact of the new education policy, which we anticipate will significantly influence our industry in the coming quarters. The gradual implementation of revised syllabi by the government is driving sustained demand. Our strong partnerships with state textbook boards position us favorably to capitalize on these growth opportunities.

“To capitalize on the demand and strengthen our market position, we have embarked on strategic capital expenditure initiatives. We will be renovating our PM3, which will further enhance our production capacity. Simultaneously, the installation of a state-of-the-art Soda Recovery Boiler will optimize our operations. These projects, with a combined investment of approximately INR 350 crores over the next two years, will position us for long-term success.

Looking ahead, with stabilized raw material prices and planned Capex, we are well-positioned to leverage our strategic initiatives, navigating external industry challenges effectively. Our commitment to delivering shareholder value through stable revenue streams, strategic cost management, and targeted investments remains unwavering. We maintain a positive outlook for the future, confident that our focused efforts will propel us towards continued success,” he concluded.

SIL surprisingly overtook many of its peers in production achieve, to 2,13,804 MT in FY24 implying a capacity utilization of ~98%. SIL has successfully commissioned their PM 4 and has augmented its total installed capacity to 219,000 MTPA. SIL's effective cost control and backward integration initiatives contributed to improved margins.
 

Web Title: Satia Industries announces strategic expansion initiatives worth Rs. 350 Cr. Net profit contracted 39% YoY to Rs. 511 Mn during Q1FY25