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
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