Shares of Balaji Amines Ltd a speciality chemical company plunged 18.5% on Monday’s early trades following the resignation of its Chief Financial Officer (CFO), Hemanth Reddy Gaddam on Saturday. Its shares opened at ₹ 2306.50 on Friday and reached a 52-week low of ₹ 1880.00 on Monday. They were trading at ₹ 2089.55 apiece, down 9.41% at 02:33 PM. 

The company in an exchange filing said that the full-time director and CFO has resigned to focus on subsidiary company, Balaji Speciality Chemicals Ltd. 

Meanwhile, Srinivas Reddy will take over as the new CFO. Hemanth Reddy Gaddam added that he would be happy to be reappointed after a three-year period and that no further resignations are expected within the company. He confirmed that there are fundamentally, there are no issues with the company and that the growth trajectory is intact. 

In another development, Balaji Amines announced that its independent directors Naveena Thammishetty Chandra, Kashinath Revappa Dhole, Satyanarayana Murthy Chavali, Amarender Reddy Minupuri, and Vimala Behram Madon have resigned citing personal reasons. 

However, one of the independent directors, Satyanarayana Murthy Chavali said that they have stepped down due to the Securities and Exchange Board of India’s (SEBI) regulations which mandate an independent director to resign if he or she has completed 10 years at that position. It does not allow for more than two five-year terms for independent directors and they would not be considered independent if they end up having a tenure of more than 10 years. 

For the January to March quarter, Balaji Amines reported a 39.49% year on year drop in its consolidated net sales to ₹ 471.39 crores, from ₹ 779.04 crores in the corresponding quarter last year. Its quarterly net profit tanked 56.39% to ₹ 47.41 crores in the latest quarter, as compared to ₹ 108.72 crores in the corresponding quarter a year ago. 

Balaji Amines’ EBITDA (earnings before interest, taxes, depreciation, and amortization) stood at ₹ 98.63 crores in the March quarter of 2023, down 50.48% from ₹ 199.18 crores in the March quarter of 2022. Its EPS (Earnings per share) decreased to ₹ 14.63, from ₹ 33.56 in March 2022. 

The management said that the fall in its margin was due to the weakness in Pharma API and the Agro sector. It added that they will return to pre-Covid levels of growth in due course. 

Balaji Amines manufactures and sells speciality chemicals, aliphatic amines and derivatives. In addition, it runs a five-star hotel in Solapur, Maharashtra, namely Balaji Sarovar Premiere. 

With a market capitalization of ₹ 7473 crores, Balaji Amines is a small-cap company. It has a high return on equity of 34.36% and an ideal debt to equity ratio of 0.08. Its shares were

trading at a price to earnings ratio of 19.32 which is slightly higher than the industry P?E of 16.51, indicating that the stock might be overvalued as compared to its peers. 

Written by Simran Bafna 

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