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Revenue
₹2,103 Cr
verified against source
Revenue YoY
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reported change
EBITDA
Pending
latest reported figure
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Quarter read
What the record says.
Sudarshan Chemical reported a tough Q3 FY26, with the acquired Heubach/Clariant business posting a €38 million EBITDA loss, driven by customer destocking and weak demand in Europe and North America. Legacy Sudarshan revenues were flattish. Management highlighted that customer trust has been rebuilt and buying has resumed in January/February, expecting a €9-10 million business EBITDA in Q4. However, a planned inventory reduction of €30-40 million over three quarters will temporarily depress reported EBITDA by €9-12 million due to overhead absorption. The long-term target of €90-100 million EBITDA remains intact, but near-term risks include slower-than-expected demand recovery and execution challenges in cost synergies.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects business EBITDA (excluding inventory impact) of €9-10 million in Q4 FY26, driven by demand recovery and cost actions.
- Plan to reduce finished goods inventory by €30-40 million over the next three quarters, improving cash flow but temporarily reducing reported EBITDA by €9-12 million.
- Management reiterated the 3-4 year target of delivering €90-100 million EBITDA, assuming normal market conditions and full synergy realization.
- Harmonization of four SAP systems into one by December 2026 to improve productivity and reduce costs.
Risks flagged
- Customer destocking may persist longer than anticipated, delaying volume recovery and impacting Q4 guidance.
- Planned inventory reduction will temporarily depress reported EBITDA by €9-12 million, which may surprise investors.
- The acquired group has a high fixed cost structure, making EBITDA highly sensitive to volume fluctuations.
- Potential EU-India trade deal may take 10-12 months to implement, with no immediate benefit; global footprint provides flexibility.
Key quotes
- We expect a 9 to 10 million of a business EBITDA right however we are in a mode now to start reducing our inventories... and that would have an impact on our EBITDA going forward but it will have a very positive impact on cash flow.
- The customers promised that they would start buying after January and we are seeing that already in January and early February.
- Our target in the next three quarters is to reduce our inventory in the range of 30 to 40 million.
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