Rain Industries hits 10% lower circuit on weak December quarter numbers

The stock locked in lower circuit of 10% at Rs 97.65 after it reported a net loss of Rs 139 crore in Q4CY18 against profit of Rs 307 crore in a year ago quarter.

Shares of Rain Industries locked in lower circuit of 10 per cent at Rs 97.65 apiece on the BSE after the company reported the biggest net loss in the past four years in October-December quarter (Q4CY18), mainly due to lower operating performance. The petrochemicals company posted a net loss of Rs 139 crore in Q4CY18 against a net profit of Rs 307 crore in the year-ago quarter. Earlier, in December 2014 quarter Rain Industries posted a net loss of Rs 200 crore.

Net revenue of the company during the quarter under review grew 10 per cent at Rs 3,428 crore against Rs 3,125 crore in the corresponding quarter of previous fiscal. The volumes decline was primarily driven by lower demand at higher pricing levels, reduced production and sluggish growth in the European automotive industry.

The company’s Ebitda (earnings before interest, taxation, depreciation and ammortisation) margin contracted 850bps at 6.8 per cent in Q4CY18 from 21.9 per cent in Q4FY17.

The adjusted Ebitda in carbon and advanced materials decreased by Rs 390 crore and Rs 60 crore respectively due to lower volumes coupled with increased raw material costs specifically in calcined petroleum coke (CPC) from consumption of high value raw material.

The company said the performance of Indian calcination business still in recovery phase due to the impact of temporary green petroleum coke import ban in India, resulting in the consumption of high-priced raw materials. The CPC import ban further negatively impacted blending strategy of the company, partly impacting US CPC plant utilization.

In the past one year, Rain Industries has underperformed the market by falling 76 per cent, as compared to 4.4 per cent rise in the S&P BSE Sensex. The stock hit a 52-week low of Rs 88 on February 15, 2019, in the intra-day trade.

The trading volumes on the counter more than doubled with a combined 3.14 million equity shares changed hands on the NSE and BSE. There were pending sell orders for 148,466 shares on both the exchanges.