Southern Magnesium & Chemicals Q1 Results Revenue Up 125% QoQ and 331% YoY

Southern Magnesium & Chemicals Q1 Results: Southern Magnesium & Chemicals saw significant financial improvements compared to both the previous quarter and the same period last year in the first quarter of the fiscal year. Total revenue jumped to ₹5.95 crores, a remarkable increase of 125% from ₹1.80 crores in the previous quarter and an even larger 331% rise from ₹1.38 crores a year ago. The company's spending on selling, general, and administrative expenses also grew, reaching ₹0.58 crores, which is up by 122% from ₹0.21 crores last quarter and 176% more than the ₹0.21 crores spent a year earlier.

Southern Magnesium & Chemicals’ depreciation and amortization costs increased slightly to ₹0.02 crores, a minor rise of 16% from ₹0.01 crores a year ago, but they actually decreased by 19% from the previous quarter. Other operating expenses also rose to ₹0.31 crores, a 187% increase year-on-year. Overall, total operating expenses soared to ₹3.62 crores, marking a 113% increase from the last quarter and a staggering 381% rise from the same quarter last year.

Southern Magnesium & Chemicals’ despite higher expenses, the company achieved an operating income of ₹2.34 crores, a 146% increase from the previous quarter and a 271% increase from a year ago. Net income before taxes also improved significantly to ₹2.38 crores, up 134% quarter-over-quarter and 261% year-over-year. Net income rose to ₹1.78 crores, a 133% increase from the previous quarter and a 274% increase from the same period last year. Finally, the diluted normalized earnings per share (EPS) surged to ₹5.93, showing a 133% increase from the last quarter and a 274% rise year-over-year. These results indicate strong financial growth for Southern Magnesium & Chemicals.

Here is a simplified overview of Southern Magnesium & Chemicals' Q1 results:

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Southern Magnesium & Chemicals Q1 Results

In the quarter ended June 30, 2024, the company earned 595.42 lakhs from its operations and had an additional 5.46 lakhs in other income. This made the total income for the quarter 600.88 lakhs. For the year ended March 31, 2024, the total income was 274.97 lakhs, combining 264.67 lakhs from operations and 10.30 lakhs in other income.

Expenses for the quarter included 262.67 lakhs for materials, 8.36 lakhs for inventory changes, 58.42 lakhs for employee benefits, 1.42 lakhs for depreciation, and 30.91 lakhs for other costs, totaling 363.29 lakhs. In comparison, for the year, expenses were 173.22 lakhs.

The company's profit before tax for the quarter was 237.59 lakhs, compared to 101.75 lakhs for the year. After accounting for taxes, the net profit for the quarter was 177.80 lakhs, significantly higher than the 76.37 lakhs profit for the year. There were no other comprehensive income items reported. The earnings per share were 5.93 for the quarter and 2.55 for the year.

Here’s a summary of the financial results:

Southern Magnesium & Chemicals Financial Metrics 

Southern Magnesium & Chemicals has a market capitalization of ₹130 crores, which shows the total value of all its shares. The current stock price is ₹433, with a high of ₹469 and a low of ₹136 over a certain period. The price-to-earnings ratio (P/E) is 28.0, indicating how much investors are willing to pay for each unit of earnings. 

Here's a simplified breakdown of the provided stock information:

Quarterly Results 

The table shows the financial performance of Southern Magnesium & Chemicals from December 2023 to June 2024. In December 2023, the company had sales of ₹2.88 crores, with expenses of ₹1.42 crores, leading to an operating profit of ₹1.46 crores and an operating profit margin of 50.69%. By March 2024, sales slightly dropped to ₹2.65 crores, expenses increased to ₹1.68 crores, reducing the operating profit to ₹0.97 crores and lowering the margin to 36.60%. 

Here's a table for the quarters December 2023, March 2024, and June 2024:

About Southern Magnesium & Chemicals 

Southern Magnesium & Chemicals was founded in February 1985 by Dr. N B Prasad and his family. The company started a project in Gowripatnam, Andhra Pradesh, to make magnesium metal. They worked with the Andhra Pradesh Industrial Development Corporation to set up this project. SMCL took over a pilot plant from the National Metallurgical Laboratory, which could make 200 tons of magnesium per year using the Pidgeon process. 

Southern Magnesium & Chemicals’ After making some improvements, they increased the plant's capacity to 600 tons per year. SMCL began producing magnesium metal commercially in 1990, becoming the first and only company in India to do so.

In December 1993, Southern Magnesium & Chemicals raised funds through a public issue to expand their business. They wanted to produce different magnesium products like granules, powder, alloys, and extrusions. However, due to tough market conditions, the company stopped making magnesium metal. Today, SMCL focuses on manufacturing magnesium chips, turnings, granules, and powders instead. The company has adapted its business to continue serving the market despite changes in the industry.