Specialty chemical firm Chemplast Sanmar announced Q3FY23 results: Q3FY23: Prices for both Paste PVC and Suspension PVC bottomed out during the quarter, after continuous fall from April ‘22. Trend reversed from December 2022 onwards with multiple price increases for both Suspension PVC and Paste PVC Feedstock (EDC and VCM) prices continued to move in line with PVC prices, albeit with a lag. We expect margins to improve in Q4FY23 Volumes across the portfolio saw an uptrend in Q3FY23 as compared to the corresponding period last year The Custom Manufacturing business continues to achieve strong growth Power & fuel cost increased by Rs 170 crore and by Rs 37 crore as compared to 9M and Q3FY22, respectively - mainly due to increase in coal, natural gas & superior kerosene prices Both the Paste PVC and Custom Manufacturing expansion projects are on track Plan to kick-start the next phase of expansion of Custom Manufacturing multi-purpose facility. The total capex outlay (including the next phase) will be ~ Rs 680 crore to be spent over the next 15 months. With a healthy cash balance of Rs 1,167 crore, the company continues to be net cash positive on a consolidated basis. Commenting on the results, Mr. Ramkumar Shankar, Managing Director, said, “In an evolving macro environment, as expected, the quarter gone by has turned out to be another subdued one for us as well as the industry. Our business continued to face headwinds for most part of Q3FY23 with a revival in PVC prices only from December onwards. For the 9MFY23 period, revenues were lower by 7% as compared to the corresponding period last year – however, sales volumes of all products were higher on a YoY basis. Falling prices of finished goods coupled with increase in energy costs have resulted in reduction of EBITDA margin which stood at ~10% for the 9MFY23 period The situation for the PVC segment is turning favorable again, driven by robust domestic demand and China re-opening. PVC prices have started moving upwards after nine months of falling prices, channel inventory has dried up and volume off-take is back to normal. We expect the demand in FY23 for Suspension PVC in India to touch the pre-pandemic levels of 3.3 million tonnes, a 16%-17% growth over FY22. Overall, with recovery in PVC prices and healthy demand trends, we expect our Q4FY23 performance to return to a growth trajectory High energy costs continue to remain a concern, though here too, there are some encouraging signs with a reduction seen in coal prices. In the Custom Manufacturing segment, we will continue to achieve strong growth going forward. We recently received confirmation from one of our customers that we have been selected to supply an advanced intermediate for an already established generic AI. Based on this development, along with the announcement in the previous quarter on the signing of an LOI for another intermediate, and a healthy pipeline of products, we plan to kick-start the next phase of expansion of the multi-purpose facility immediately. While Phase 1 is expected to come on-stream by Q2FY24 as originally scheduled, we are targeting to commission the next phase by end of FY24 The Other Chemicals businesses complete our integration story and outlook for this segment remains stable over the medium term, though there are some short-term challenges. Both our capex projects are on track and slated to meet expected timelines. We expect a better performance in FY24 driven by a combination of a rebound in PVC demand & prices along with new capacities (Paste PVC and Custom Manufacturing) coming on-stream during the year.” Result PDF