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Galaxy Surfactants Q2: Will pass on raw material price hike, says management

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Galaxy Surfactants Q2: Will pass on raw material price hike, says management

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Galaxy Surfactants reported its Q2FY22 earnings. U Shekhar, Founder Promoter and Managing Director, Galaxy Surfactants discussed the earnings fineprint with CNBC-TV18. He mentioned that the company has faced significant volatility in raw material prices and hasn't been able to pass it on fully to its customers. He expects to do so with a lag and is hopeful that the margins will recover in the coming quarters.

Speciality chemicals maker Galaxy Surfactants on Thursday reported a 48.9 percent decline in consolidated profit after tax (PAT) to Rs 42 crore for the September 2021 quarter. The company's consolidated PAT for the corresponding period of the previous fiscal stood at Rs 82 crore. Its total revenue during July-September 2021 grew 22 percent to Rs 882 crore, compared with Rs 723 crore in the year-ago period. U Shekhar, Founder Promoter and Managing Director, Galaxy Surfactants, discussed the earnings fineprint, in an interview with CNBC-TV18.

The company has seen volatility in raw material prices. While they have been able to manage the risk very well but have not been able to pass it on entirely to the customers during the quarter.
“The passing on will happen with a lag and we do hope that we will be able to recover margin in the coming quarters,” he said.
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“We would like to maintain our volume growth at 6-8 percent,” he stated.
Demand has been pretty robust in the first half of the year, he noted. He sees significant structural uptick in terms of demand for performance products within the country.
However, the supply chain issues remain. He expects them to continue for the next two-three quarters.
“We have been significantly disrupted on the supply chain side, we also had issues with respect to local availability of raw materials. As a result of which, we lost significant amount of production,” he said.
In terms of new projects, Shekhar explained, “The commissioning of new projects has started. We are commissioning them in phases and we should complete the commissioning by January.”
(With inputs from PTI)
For the full interview, watch the accompanying video.
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