Petrochemicals company DCW declares Q3FY22 result: Reports 73% higher Revenue YoY and 63% higher EBITDA YoY for 9MFY22 Q3 FY22 delivers highest ever Quarterly EBITDA, led by growth across segments Revenue from operations for Q3FY22 stood at INR 6,534.95 Mn, dlivering growth of 69.9 % on a YoY basis. Better operational efficiency coupled with favourable market conditions across all its products led to overall improvement in revenue. EBITDA for Q3FY22 stood at INR 906.60 Mn compared to INR 595.3 Mn in Q3FY21, delivering a growth of 52.29% YoY, despite of witnessing pressure on account of higher raw material prices for its speciality chemicals business. The Company has by in large been able to pass on this costs to end consumers from Q4 onwards, which will ease the pressure on the margin front for its overall speciality chemicals business. PAT stood at INR 409.80 Mn in Q3FY22, compared to a profit of INR 64.4 Mn in Q3FY21. Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Limited said, “Despite challenging environment in terms of raw material inflation and fear of a third covid wave, the Company’s performance has remained buoyant in Q3FY22. We have been able to ignite all our growth silos at the right time, continuing to move with an inspiring momentum. We began our Fiscal year with strong C-PVC performance, and from thereon we have been able to overcome challenges with strong responses. During 9MFY22, our C-PVC, SIOP , PVC and Caustic soda segment have reported substantial growth. Each segment has been delivering on its strengths, which gives immense confidence going ahead. The Specialty chemicals segment remains a steady revenue generator and shows tremendous potential going ahead. C-PVC & SIOP maintained its strong foothold by contributing 25% to the total EBITDA during 9MFY22. The Company experienced raw material cost pressures during 9MFY22 for its specilaity chemical business. As the order book for speciality chemicals is medium to long term in nature, raw material inflation is passed on with a lag. Thus for SIOP where margins declined on QoQ due to higher raw material costs, it is expected to get neutralize going ahead. On commodity chemicals front, PVC has been witnessing a good demand scenario, which has helped us to report better performance. Besides PVC, our Caustic Soda division is also witnessing strong momentum. The strong recovery in these commodities, coupled with strategic initatives on the operations front, were the key drivers of the Company’s underlying performance. We continue to focus on excellence by leveraging our well balanced portfiolio, focusing on better operating performance and maintaining quality standards.” Result PDF
Highlights: DCW reports an all round improvement in Q2FY22 performance; sales up 69% YoY and EBITDA up 58 % YoY. Revenue from operations for Q2FY22 stood at INR 5719 Mn, a growth of 69 % on a YoY basis. Better operational effcieincy couple with favourable market conditions across all its products led to overall improvement in revenue. EBITDA for Q2FY22 stood at INR 807 Mn compared to INR 511 Mn in Q2FY21 a growth of 58% YoY. EBITDA margins in Q2FY22 witnessed marginal pressure on account of higher raw material prices. The Company was not able to fully pass on the higher raw material prices which spiralled up in quarter. Raw materials like VCM, coal etc has been on increasing treand in H1FY22. PAT stood at INR 197 Mn in Q2FY22, compared to a profit of INR 10 Mn in Q2FY21. The company reported an all-around improvement in operations, leading to higher Revenue. Company’s performance was predominantly led by SIOP, PVC and CPVC. Speciality chemicals remains consistent contributer in the copmany’s earnings. C-PVC: This segment remains a consistent growth driver for the company. The revenue from this segment increased by 59 % YoY to INR 531 Mn in Q2FY22 as against INR 334 Mn in Q2FY21. The growth was primarily driven by higher volumes and better realisations. Net Sales Realisation for CPVC witnessed an increase of 16% YoY. SIOP: Consistent efforts have led to a positive turnaround of this division. Capacity utilization increased 853 bps YoY to 51% in Q2FY22, resulting in revenue growth of 124 % YoY . Realisation for SIOP (red) remains firm YoY. PVC: This segment volume increased by 15% YoY. It reported a revenue of INR 3149 Mn in Q2FY22; 101 % growth YoY. Higher realisations coupled with higher volumes has led to robust performance for this division . Commenting on the results, Mr. Vivek Jain, Managing Director, DCW Ltd. said, “With the gradual easing of lockdown post second wave of covid, the overall demand environment has remained positive in Q2FY22. While this positive momentum led to overall increase in offtake as well as realisations, however the supply side environment especially on energy costs and supply chain on various raw material front poses a challenge. The team has responded well to ensure customers are served with agility. The Specialty chemicals segment remains a steady revenue generator and shows tremendous potential going ahead. C-PVC & SIOP maintained its strong foothold by contributing 20% to the total EBITDA. The SIOP division has been showing a promising turnaround and is likely to contribute meaningfully backed by higher capacity utilization and favourable market conditions in coming quarters. Order pipeline for our sepciality chemicals remains buoyant. On commodity chemicals front as well, PVC has been witnessing a good demand scenario which has helped company to report better performance. We continue our long term focus on excellence by leveraging our speciality chemical portfiolio, better operating performance and quality standards.” Result PDF