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In order to recommend the best stock ideas to our members, we keep looking for new opportunities and add them to our watch list.

One such stock in our watch list is Ultramarine & Pigments Ltd.

The company has 3 major business divisions - Pigments, Surfactants and ITes.

Since the last 1-2 years the company has been expanding capacities and has planned further expansions in the areas of specialty chemicals, fine grade pigments, mixed metal oxides, etc.

Below, we have shared notes from the Annual Report FY 22 of the company. Hope you find the details useful in your search of investment opportunities.


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Ultramarine & Pigments - Notes from Annual Report 22

FY 22 performance -

  • The revenue for the year from operations stood at Rs 491.02 crore in 2021-22, registering a growth of 59% as compared to the previous year
  • This increase is due to improved volumes in the Pigments and Sulphonation divisions
  • The newly commissioned Sulphonation plant at Naidupet, Andhra Pradesh was operational throughout the year as compared to less than 3 months in the previous year
  • There is a 9% increase at EBIDTA and the net profit went up by 4%, despite an uncontrollable and sharp rise in the cost of raw material, fuel & freight. The Company was unable to pass on all the increases to our customers

Pigment division -

  • Revenue from the Pigments division increased by 41% as compared to the previous year while volumes went up 25%
  • The Pigments division achieved a net revenue of Rs 128.72 crore in this financial year compared to Rs 91.19 crore in the previous financial year, and exports were at Rs 80.75 crore as against Rs 48.90 crore
  • With increased export demand, there was an improvement in realization
  • Steep increases in input costs, i.e fuel, freight and key raw materials, caused intense margin pressure
  • The addition of fresh capacity at the new Plant was covered under the Subsidiary Company – Ultramarine Specialty Chemicals Limited

Surfactants division -

  • The sulphonation plant at Naidupet was operational for the full financial year and the offtake from this plant resulted in a 23% increase in volume & 44% in revenue compared to the previous year
  • This division reported a revenue of Rs 322.41 crore as against Rs 184.16 crore for the previous year
  • The Company saw unprecedented cost increases across the board in raw material and fuel, which have affected its margins

Raw material -

  • This year witnessed volatile movements in raw materials for both Pigments & Sulphonation
  • The Company also saw an unprecedented increase in cost of basic raw materials like sulphur, clay and soda ash. Imported raw materials also saw a huge increase in freight costs
  • The dramatic increase in the cost of Oleo chemicals and Alpha olefins and their diminished availability in the market caused reformulation and shifting of market demand – due to the product mix strategy, however the Company was able to make up for lost revenues at the cost of some erosion in the margin

Freight cost -

  • ocean freight went up by 400% in some cases
  • While import costs could not be passed on in their entirety, due to the prevailing market conditions in India, export freight costs were fully passed through to customers. As a result, the Company was able to hedge some of the margin erosion in its domestic surfactants and pigments businesses through the pigments exports


  • A new plant is being set up to manufacture certain specialty chemicals with a capital outlay of Rs 21 crore at the Naidupet facility. This project will be completed during FY 2022-23. These products are used as ingredients in cosmetics, personal care and health care industries
  • the project at Naidupet to manufacture fine grade Pigments (1500 MT) is complete. This is a new manufacturing facility set up under the wholly owned subsidiary - Ultramarine Specialty Chemicals Limited. Your Company invested Rs 60.75 crore during the year by way of Capital & term loan – the remainder of the project is funded through a term loan. The Subsidiary has obtained environmental clearance for this project and expects to commission this new facility soon
  • Further, a project to add additional capacity of Pigments will also be undertaken in the subsidiary at the same location with a capital outlay of Rs 61.50 crore
  • In the same subsidiary, a new project at Naidupet is being implemented, to manufacture Mixed Metal Oxides, with a capital outlay of Rs 24.35 crore. The capacity will most likely be commissioned during the current fiscal year


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Disclaimer: This is not a recommendation to buy/sell Ultramarine & Pigments. These notes are as announced by the companies on exchanges and only for the purpose of information and education.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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