Pondy Oxides and Chemicals Ltd shares hit the 5% upper circuit on Thursday, reaching an intraday high of ₹1,117.2 per share on the Bombay Stock Exchange (BSE). The surge came after the company announced impressive Q2FY25 results, showcasing significant growth across key financial metrics. At around 10:56 AM, the share price remained locked at ₹1,117.2, while the BSE Sensex was down by 0.35%, indicating strong market interest in Pondy Oxides despite broader market trends.
At the time, the company's market capitalisation stood at ₹2,910.35 crore, making it a notable player in share market investment.
Exceptional growth in profit and revenue
Pondy Oxides reported a consolidated net profit of ₹15.3 crore for Q2FY25, a substantial increase from ₹5.7 crore in the corresponding period last year, representing a 168.4% year-on-year growth. The company's revenue from operations also rose significantly, reaching ₹579.1 crore, up 46% compared to ₹396.82 crore in the previous year's quarter.
This robust performance was driven by a substantial increase in production and sales across key segments, including lead, plastics, and copper.
Improvement in operational efficiency
The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) saw a notable increase, with consolidated EBITDA for the quarter climbing 75% year-on-year to ₹53 crore, compared to ₹29 crore in the same period last year. The EBITDA margin stood at 5% for Q2FY25, while it was at 4% for the first half of FY24. The improvement in margins reflects Pondy Oxides' ability to manage costs effectively while scaling up its production.
Significant boost in lead production and sales
Lead production showed remarkable growth, increasing by 50% year-on-year to 46,855 metric tonnes (MT) for the half-yearly period and by 61% year-on-year to 26,108 MT for the quarter. Similarly, lead sales rose 47% year-on-year to 45,959 MT on a half-yearly basis and 49% year-on-year to 25,294 MT on a quarterly basis. These impressive figures underscore the company’s strengthened position in the market and its ability to meet rising demand.
EBITDA per tonne of lead for the quarter improved to ₹12,304, reflecting an 18% quarter-on-quarter increase and a 4% rise year-on-year. This further demonstrates the company’s efficiency in translating increased production into higher profitability.
Share performance outshines the broader market
Over the past year, Pondy Oxides shares have soared by 361%, a stark contrast to the 23% gain in the BSE Sensex over the same period. The company’s performance not only highlights its strong fundamentals but also indicates growing investor confidence, especially among those keen on share market investment.
Outlook for future growth
The recent financial results suggest that Pondy Oxides is well-positioned to sustain its growth trajectory, with increased production capacity and a diversified product portfolio. The surge in its share price following the Q2 announcement reflects positive market sentiment, signalling the potential for further gains if the company continues to deliver strong operational and financial results.
The company’s ongoing efforts to expand its production capabilities, coupled with efficient cost management, are likely to play a crucial role in maintaining this upward momentum. As market conditions evolve, investors will be closely monitoring Pondy Oxides’ performance to assess its potential as a rewarding share market investment opportunity.
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