Galaxy Surfactants Expects Demand Revival In FY26 Amid Boost In Consumer Spending

The speciality chemicals producer’s net profit declined 9.5% YoY to Rs 64.6 crore in the December quarter against Rs 71.4 crore in the year-ago period.

Galaxy Surfactants Ltd. reported a 10.4% rise in total revenue to Rs 1,045.7 crore in Q3 FY25, despite a 9.5% decline in profit to Rs 64.6 crore. (Photo source: Company webiste)

Galaxy Surfactants Ltd. expects a recovery in demand from the first quarter of the next financial year, driven by increased consumer spending and government initiatives to boost consumption.

“We do see things getting better, probably not immediately in this quarter. But what the government has announced in terms of putting more money in the hands of consumers to drive consumption, it would start showing results probably from the first quarter of the next financial year,” said K Natarajan, the managing director of Galaxy Surfactants Ltd.

The speciality chemicals producer reported total revenue of Rs 1,045.7 crore in the third quarter of the financial year ending March 2025, marking a 10.4% rise year-on-year. The company’s profit, however, declined 9.5% YoY to Rs 64.6 crore in the December quarter against Rs 71.4 crore in the year-ago period. The profit margin in Q3FY25 declined to 6.2% versus 7.5% in the year-ago quarter.

The company’s Ebitda also declined 7.8% year-on-year to Rs 109.5 crore. The Ebitda margin also dropped to 10.5% in the third quarter of the ongoing financial year from 12.6% in the same quarter of the preceding fiscal.

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In an exclusive interview with NDTV Profit, Natarajan explained that the downturn in profit was largely due to an unexpected slowdown in consumer demand during the festive season.

“All our customers were talking about a slowdown, but the extent to which it happened was surprising. The consumer demand was expected to pick up, and the pipeline was kept filled up with products. But when demand didn’t materialise, companies reduced factory inventory, causing a slowdown in Q3,” he said.

Despite the near-term challenges, Natarajan remains optimistic about the company’s growth trajectory. He reaffirmed the company’s medium- to long-term volume growth target of 6-8%, while remaining cautious over the near-term outlook.

“We will not be meeting those targets in the coming year as we saw about 4% growth for the YTD nine-month period. We expect to close slightly above 4% in terms of volume growth. We will review our guidance in the next earnings call,” he said.

Galaxy Surfactants continues to see growth opportunities in its speciality chemicals business, particularly in Europe and North America.

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“For the speciality segment, Europe and the Americas are the biggest markets, and most of our projects in the pipeline are focused there. We see strong reception for our products, including mild surfactants and non-toxic preservatives,” Natarajan said.

“If the geopolitical situation in Europe resolves faster, it could be a big positive for us,” he added.

The company has also seen an improvement in supply chain conditions, which had previously hit business operations. “The supply side has gotten much better, although not at the same comfort level as before. However, the availability of vessels and containers has improved, and shipping companies’ on-time performance is getting better,” Natarajan said.

Looking at emerging markets, he pointed to a gradual recovery in Africa, the Middle East, and Turkey.

“Demand in these regions has reached near-bottom levels, and we are seeing sequential growth. The supply chain issues that impacted our Egypt operations are improving, which should aid recovery,” he added.

The company is also banking on innovation to drive future growth. One of its latest product launches, Dermagreen, a green oil-soluble surfactant used in shower oils, has received positive responses in the US and Europe. “We are building a strong pipeline for Dermagreen and our entire range of mild surfactants and non-toxic preservatives,” Natarajan said.

Shares of Galaxy Surfactants Ltd. declined 4.3% on Wednesday to touch an intraday low of Rs 2,322.10 apiece on the NSE. The stock was trading 3.8% lower at Rs 2,335.3 apiece at around 11:40 am in comparison to the benchmark Nifty's decline of 0.62% at 22,929.9 points.

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