Specialty chemicals company Chemplast Sanmar announced Q1FY24 results: Revenue from operations of Rs 996 crore in Q1FY24 compared to Rs 1,411 crore in Q1FY23, down 29% YoY EBITDA of Rs (35) crore in Q1FY24 compared to Rs 194 crore in Q1FY23 EBITDA margin % of -3% in Q1FY24 compared to 14% in Q1FY23 PAT of Rs (64) crore in Q1FY24 compared to Rs 41 crore in Q1FY23 PAT margin % of -6% in Q1FY24 compared to 3% in Q1FY23 Commenting on the results, Ramkumar Shankar, Managing Director, said, “With prices of both Suspension and Speciality Paste PVC being at the lowest level over the last 8-10 quarters, Q1FY24 has been one of the toughest quarters in recent times for Chemplast and the PVC industry as a whole. This is mainly due to the sluggishness in demand globally and the excessive dumping from China. However, the domestic demand for Suspension PVC and Speciality Paste PVC was strong through the quarter with an increase in volumes both on YoY and sequential basis. The outlook for the PVC business is improving again, driven by the strong domestic demand, recovery in prices on account of a fall in import arrivals into the country, and reduction in feedstock prices. These factors, coupled with the softening energy costs, augur well for us and we expect better margins from Q2FY24 onwards. The Other Chemicals (Caustic Soda, Chloromethanes, Hydrogen Peroxide, Ref. gases) business also witnessed significant pricing pressures due to a combination of factors including weak demand, excess supply situation in India due to recent capacity additions, and the global slowdown. These headwinds are likely to continue for a couple of quarters. In this tough environment, our Custom Manufactured Chemicals Division continued to perform well and is on track to achieve over 25% revenue growth during the year as against the 10%- 15% guidance given earlier. I am very pleased to inform you that we have completed Phase 1 of the new multi-purpose block promptly with an investment of around Rs 300 crore. With 2 LOIs in place and a strong pipeline of other products, we expect this capacity to reach peak utilization in the next 2-3 years. The 41 ktpa Speciality Paste PVC and Phase 2 of the Custom Manufacturing expansion projects are on track and slated to meet expected timelines. While there are immediate-term challenges, we are very confident of all our businesses’ prospects in the medium to long term.” Result PDF
Specialty Chemicals firm Chemplast Sanmar announced Q4FY23 & FY23 results: Q4FY23: Revenue from Operations at Rs 1,147 crore EBITDA at Rs 97 crore EBITDA Margin % is at 8.5% PAT at Rs 46 crore PAT Margin % is at 4.0% FY23: Revenue from Operations at Rs 4,941 crore EBITDA at Rs 468 crore EBITDA Margin % is at 9.5% PAT at Rs 152 crore PAT Margin % is at 3.1% Commenting on the results, Mr. Ramkumar Shankar, Managing Director, said, “Despite a challenging environment this year caused by the run-up in energy prices due to the Russia-Ukraine war, the severe impact on Chinese demand due to their Zero-COVID policy for most part of the year, and rising interest rates across the globe, we closed the year with a decent performance with a top-line of Rs. 4,941 Cr and 9.5% EBITDA margin. For the full year, revenues were lower by 16% as compared to the last year – however, sales volumes of almost all the 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 during the year. Indian demand for Paste PVC grew by around 17% in FY’23, while Suspension PVC demand grew by over 30% during the year. However, the slower than anticipated recovery of China's economic activity continues to have an adverse impact on the PVC industry in the form of dumping of large quantities from China into the global market, especially India. This is expected to put pressure on PVC prices and margins in the next few quarters, till the recovery of Chinese demand. However, the medium to longterm prognosis of the PVC demand still remains positive with India, in particular, expected to see a huge gap as demand continues to outpace supply. The Other Chemicals (Caustic Soda, Chloromethanes, Hydrogen Peroxide, Ref gases) business which completes our integration story, has also been impacted largely due to commissioning of new capacities in India. We expect this business to stabilize over the next few quarters, as the new capacities settle in. Our Custom Manufacturing business has been a silver lining amidst the sluggishness witnessed by the other businesses. Growth in this business continues to be strong, with a YoY revenue growth of 26% in FY’23. We have signed LOIs for two molecules in the last 9 months with a revenue potential of ~Rs 800 crore over the next 4 years. Based on these LOIs, and the strong pipeline of products, we have a high level of visibility with respect to steady state capacity utilization of the first phase of expansion that is to be commissioned in H1 FY'24. Both the capex projects (41 ktpa Paste PVC expansion at Cuddalore, and the Multi-purpose blocks at Berigai for the Custom Manufacturing business) are on track. The demand for our products looks very strong and the energy costs have started dropping. While there are immediate-term challenges, we are optimistic about the overall business in the long term, and our capital investments will boost our margins and competitive position even further.” Result PDF