Premier Explosives consolidated net profit declines 27.73% in the September 2024 quarter

Key Highlights

• Premier Explosives Limited (PEL) reported a consolidated net profit of Rs 163.04 crore for the quarter ended September 2024, down 27.73% from Rs 224.77 crore in the corresponding quarter of the previous fiscal year.
• The company's revenue from operations grew by 12.5% to Rs 694.22 crore during the quarter under review, compared with Rs 617.66 crore in the year-ago period.
• PEL's consolidated net profit margin for the September 2024 quarter stood at 23.47%, compared with 36.44% in the September 2023 quarter.

Reasons for the Decline in Net Profit

The decline in PEL's net profit for the September 2024 quarter can be attributed to several factors, including:

• Higher input costs: The company faced higher input costs, primarily due to the rising prices of raw materials such as ammonium nitrate and explosives.
• Competition: The explosives industry in India is highly competitive, with several players vying for market share. This competition has led to intense price pressure, which has impacted PEL's profitability.
• Lower demand: The demand for explosives in the mining and construction sectors has been lower than expected due to the slowdown in economic activity.

Outlook

Despite the challenges faced in the September 2024 quarter, PEL remains optimistic about the future.

The company is focusing on cost optimization measures to mitigate the impact of rising input costs. It is also exploring new markets and expanding its product portfolio to drive growth.

PEL expects the demand for explosives to improve in the coming quarters as economic activity picks up.