Pondy Oxides

Pondy Oxides is a leading metallic oxides and plastic additives producers. It has broad based operations, manufacturing of Zinc oxide, Lead sub Oxide, Litharge Red lead and solid and liquid stabilizers of PVC.  These products are used in battery industries and automobile sector. The company has an around 30% market share in the plastics additives segment.

The company had posted a very good Q1FY17 performance and it followed it through into Q2FY17 too. Net sales rose 75% (YoY) at Rs.186 crore – this was on the back of rise in lead prices which hit a 14-month high after gaining over 15% since beginning of Q2FY17.  and despite the 73% rise in costs, lead mainly by raw material prices, its EBITDA, fueled by higher topline doubled from Rs.6 crore to Rs.12 crore. Margins though showed a small improvement from 5.66% to 6.42%.

The company ended the quarter with a net profit at Rs.7 crore, up 250% (YoY) and the best part – its H1FY17 net is equivalent to FY16 net profit at Rs.10 crore.

The company demerged 4 of its units in Dec’14 and in the scheme of arrangement during the equity capital of the company stands reduced from earlier Rs.11.15 crore to Rs.5.58 crore. Annualized EPS is at Rs.36 (FV of Rs.10). Reserve is at Rs.34 crore and debt is around Rs.110 crore.

Promoter stake is at 51.51%. Market cap stands at Rs.105 crore.