GMM Pfaudler reports 40% drop in Q4 profit; revenue rises 9%; what MD says

GMM Pfaudler Ltd, a leading player in the manufacturing sector, faced a challenging quarter as it reported a 40% year-on-year decline in net profit for the March quarter. The net profit stood at Rs 15 crore, down from Rs 25 crore in the same period last year. The company saw a 9% rise in revenue, amounting to Rs 807 crore, compared to Rs 741 crore in the same quarter last year.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) for the quarter increased by 4%, reaching Rs 93 crore from Rs 90 crore in the prior year. The company's order backlog slightly decreased to Rs 1,636 crore from Rs 1,689 crore year-on-year. This performance reflects the broader market conditions, with the chemical and pharmaceutical sectors experiencing a general slowdown.

Mr. Tarak Patel, Managing Director, acknowledged the challenging year, citing global trade uncertainties and geopolitical tensions as complicating factors. "This year has been challenging, primarily due to a general slowdown in the chemical and pharmaceutical sectors. Additionally, uncertainties surrounding global trade and geopolitical tensions have further complicated the situation," he stated.

Despite these challenges, Mr. Patel emphasised the company's resilience and strategic focus on diversification and cost optimisation. "Our focus on diversification and cost optimisation has enabled us to navigate these difficulties effectively," he added, highlighting the company's efforts to maintain a positive trajectory, particularly in India during the second half of the year.

The company's international operations continue to face unresolved issues related to US tariffs. However, its global manufacturing footprint optimisation programme remains a priority. The program includes establishing a new low-cost manufacturing site in Poland and the closure of sites in Leven, UK, and Hyderabad, India.

A noteworthy development is the appointment of Greg as the Chief Transformation Officer, expected to bring substantial expertise to the company. "We are delighted to welcome Greg as Chief Transformation Officer. I am confident his extensive experience across various industries and geographies will be a tremendous asset to the company and the management team," Mr. Patel mentioned.

The company’s ongoing efforts in cost management and diversification are set to continue into the upcoming fiscal year, aiming to improve profitability and sustain growth. The focus on enhancing manufacturing capabilities and addressing international challenges remains key to its strategy.

Looking forward, GMM Pfaudler said it is committed to overcoming market hurdles and achieving sustainable growth by leveraging its strategic initiatives. The company aims to maintain its momentum and address sector-specific challenges effectively as it enters the new financial year.