BASF India's Q1 profit falls on sluggish demand, high input costs
BENGALURU : Chemicals maker BASF India on Monday reported a fall in its first-quarter profit, hurt by weak sales and higher input costs. The Indian arm of Germany's BASF said its profit for the quarter ended June 30 fell nearly 43% to 1.13 billion rupees ($13.8 million), while sale of products fell to 33.43 billion rupees from 38.58 billion rupees a year ago.
The company has reported a fall in profit for four quarters in a row, with a constant increase in cost of materials consumed. Weakness in demand due to inventory destocking and China's reopening has resulted in high channel inventory, and is likely to add to the pressure on chemical makers including BASF India in the first half of fiscal 2024, according to B&K Securities.
The large capex program undertaken by most chemical companies may act as a dampener to operating profit, adding to the strain on the balance sheet and offset the impact of lower input costs, according to analysts. Concerns of recession in European markets as well as the closure of TDI (toluene diisocyanate) plant also hurt sales.
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