ASAHISONG - Asahi Songwon

📊 NSE: ASAHISONG 🏢 Dyes And Pigments 📅 Last Updated: 12/13/2025 18:33

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations grew 31.9% YoY to INR 562.36 Cr in FY25. Q2 FY26 revenue reached INR 120.90 Cr, a 14.62% YoY increase, driven by scaling volumes in the API business and improved utilization in Azo pigments.

Geographic Revenue Split

Exports contributed 64% (INR 77.38 Cr) and Domestic sales contributed 36% (INR 43.52 Cr) to the total revenue in Q2 FY26.

Profitability Margins

Operating profit (PBIT) margin improved significantly from 1% in FY24 to 7% in FY25. Net profit margin stood at 3% in FY25 compared to 4% in FY24, impacted by higher interest and depreciation costs.

EBITDA Margin

EBITDA margin improved to 10% in FY25 (INR 56.17 Cr) from 4% in FY24 (INR 18.26 Cr). Q2 FY26 EBITDA was INR 11.14 Cr, up 23.17% YoY.

Capital Expenditure

Cash flow from investing activities was an outflow of INR 5.39 Cr in FY25, compared to an outflow of INR 13.14 Cr in FY24, primarily for de-bottlenecking and engineering optimization.

Credit Rating & Borrowing

Credit rating revised to CARE A-; Stable (Long-term) and CARE A2+ (Short-term) in April 2024. Interest costs rose 31.2% YoY to INR 16.47 Cr in FY25 due to increased debt coverage requirements.

⚙️ Operational Drivers

Raw Materials

Specific raw material names not disclosed; however, pigment intermediates and API raw materials are the primary inputs, with cost-saving exercises focused on engineering standpoints.

Capacity Expansion

The ATC Dahej plant (Azo pigments) has turned cash positive and is expected to reach PAT neutrality. New capacity additions in the API business are planned to support the growth path.

Raw Material Costs

Total operating expenses, including raw materials, were INR 510.23 Cr in FY25, representing 90.7% of revenue, up from 96.3% in FY24.

Manufacturing Efficiency

Capacity utilization in the Azo segment has improved steadily. Inventory turnover ratio improved from 4.97 times in FY24 to 6.51 times in FY25.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth will be achieved through ramping up capacity utilization at the ATC Dahej Azo plant, new product launches in the API segment, backward integration to enhance margins, and applying for CEP accreditations to expand the export business.

Products & Services

Phthalocyanine Blue pigments, Azo pigments (Yellow and Red), and Active Pharmaceutical Ingredients (APIs) and their intermediates.

Brand Portfolio

Asahi Songwon Colors Limited.

New Products/Services

New product development is focused on the Azo segment and API business, with new product launches expected to drive sustainable profitability.

Market Expansion

Aims to grow the export business over the next few years by applying for international accreditations like CEP.

Market Share & Ranking

Maintains a leadership position in the Phthalocyanine Blue pigment segment.

Strategic Alliances

Maintains technological tie-ups with industry leaders to back strong technical capabilities.

🌍 External Factors

Industry Trends

The industry is seeing consolidation in global pigments and a shift toward Indian manufacturers due to favorable government policies and supply chain diversification.

Competitive Landscape

The company faces competition in the global pigment and API markets, but consolidation in the pigment industry is viewed as a strategic advantage.

Competitive Moat

Moat is built on leadership in the blue pigment segment, technological tie-ups with industry leaders, and a strong balance sheet with a debt-equity ratio of 0.58.

Macro Economic Sensitivity

Highly sensitive to global economic conditions and trade policies due to the 64% export revenue contribution.

Geopolitical Risks

The global shift to diversify supply chains away from China (China+1) positions the company advantageously in the global pigment industry.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to pollution norms, government regulations, and international manufacturing standards for APIs and pigments.

Environmental Compliance

Sustainability is placed at the core of the business strategy to achieve leadership across operations.

⚠️ Risk Analysis

Key Uncertainties

Key risks include the challenging environment for the API business and the benign business environment for pigments, which could impact the goal of turning Azo PAT-positive.