Chemplast Sanmar Ltd. share price target

Chemplast Sanmar (CSL) has been enduring challenges over the past two years due to a weak cycle in PVC business; finally, early signs of consolidation have surfaced, and policy action should aid business recovery.

Chemplast Sanmar’s (CSL) Q4FY24 print was expected to be weak, owing to the PVC business continuing to struggle, start-up costs in the custom manufacturing business (new facility and products) and weak revenues from its existing portfolio.

Chemplast Sanmar’s (CSL) Q2FY24 EBITDA came in at INR 460mn, which shows depressed business condition in PVC, and non-specialty. The PVC business is poised to recover over the next few quarters, and stabilisation of prices is critical. While Chinese imports rose again in Q2FY24, notification of regulatory measures announced can help arrest these imports.

Chemplast Sanmar’s (CSL) Q1FY24 EBITDA stood at a loss of INR 345mn, which shows depressed business condition. This was due to large capacity addition in non-specialty business in India; PVC business was hurt by lower prices and VCM prices dropped with a lag.

Chemplast Sanmar’s (CSL) Q4FY23 EBITDA was impacted by lower volumes and lower profits in the standalone business. Standalone was impacted by lower revenues from custom manufacturing, high-priced EDC (which hurt paste-PVC spreads) and drop in commodity prices.

Chemplast Sanmar’s (Chemplast) Q3FY23 result has marked the worst for EBITDA, and will likely show significant jump from Q4FY23 driven by: 1) Paste-PVC and S-PVC to benefit from normalisation of spreads; no inventory loss / gains; 2) restocking in PVC to help drive strong volumes.

Management expects to see benefit of PVC price recovery from Q4 after a muted Q3

Chemplast Sanmar’s (Chemplast) weak print for Q2FY23 was anticipated in view of
falling PVC prices and inventory write-downs. Company said PVC prices continue to
slide in Q3FY23 too, and recovery is likely only from Q4FY23.

Chemplast Sanmar’s (Chemplast) Q1FY23 spreads were impacted by various factors
including: 1) China dumping excess supply into India and other regions; 2) falling PVC
/ VCM prices pushing buyers to start destocking, which hurt volumes; and 3) sharp fall
in prices and slower volume offtake leading to inventory write-downs.

27 Equity Shares and in multiples thereof. Public issue of 71,164,510 Equity shares of Face value Rs. 5 each, (Comprising of fresh issue of 24,029,575 Equity Shares* (Rs. 1300 cr.) and Offer for Sale of...

Incorporated in 1985, Chemplast Sanmar (CSL) is a specialty chemicals manufacturer in India with focus on specialty paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors. CSL is one of India's leading manufacturers of specialty paste PVC resin on the basis of installed production capacity, as of December 31, 2020. In addition, it is also the third largest manufacturer of caustic soda and the largest manufacturer of hydrogen peroxide in South India, on the basis of installed production...

IPO Note

Chemplast Sanmar Limited IPO Note Issue Open: Aug 10 Aug 12 2021 Price Band: Rs. 530 541 *Issue Size: 71,164,510 eq shares (Fresh issue of 1300 cr + offer for sale of 2550 cr) *Issue Size: Rs.3771.7 3850.0 cr Reservation for: QIB atleast 75% eq sh Non Institutional atleast 15% eq sh Retail Upto 10% eq sh

Chemplast Sanmar Lld. (CSL) is a specialty chemicals manufacturer in India with a focus on specialty paste PVC resin and custom manufacturing materials for pharmaceutical, agro-chemical and fine chemicals sectors. CSL is one of India's leading manufacturers of specialty paste PVC resin, the third-largest manufacturer of caustic soda, and the largest manufacturer of hydrogen peroxide