Chemplast Sanmar Q2 FY24 PAT drops 32% to Rs. 26 Cr_Chemplast Sanmar Q2 FY24 PAT drops 32% to Rs. 26 Cr

Chemplast Sanmar Q2 FY24 PAT drops 32% to Rs. 26 Cr

June 17, 2024

Chemplast Sanmar Limited has osted a 32% drop in Profit after Tax (PAT) at Rs 26 crore in the quarter ended September 30, 2023 compared to Rs. 39 crore in the corresponding quarter last year. The revenue was at Rs 988 crore in Q2 FY24, a decrease by 17% over the same quarter last year at Rs 1,194 crore.

Commenting on the results, Ramkumar Shankar, Managing Director, said, “Following a tepid Q1 FY’24, Q2 FY’24 witnessed a relatively better performance mainly due to improvement in prices of both Suspension and Paste PVC coupled with lower feedstock prices.

“The top line was flat while EBITDA was back in the black during the quarter. However, the imports of both Suspension and Paste PVC witnessed an increasing trend towards the end of Q2 with heavy arrivals from China. This trend has spilled over to Q3 as well, resulting in some correction in prices in October. We expect the PVC margins to be under pressure in Q3.

“The demand outlook for our PVC products, however, remains strong with a boom in the infrastructure and real estate sectors. We expect the recovery in prices and margins to be gradual over the next 2-3 quarters.

“The Other Chemicals (Caustic Soda, Chloromethanes, Hydrogen Peroxide, Refrigerant gases) business continued to witness pricing pressures during the quarter due to weak demand, excess supply situation in India due to recent capacity additions and the global slowdown. There are some initial signs of recovery in prices towards the end of October.

“The inquiries for our Custom Manufactured Chemicals Division’s business continue to remain robust. To effectively address the growing demand, we continue to enhance our capabilities.

“With the recent signing of the third LOI with a global agrochemical innovator for an Active Ingredient, we have strong visibility with respect to steady state capacity utilization of the new production block and are on track to achieve Rs. 1000 crores revenues in the next 3-4 years.

“While we face headwinds in the near-term, the business prospects for our products continue to be strong in the medium to long term. With the projects on track for commissioning as per the slated timelines, we are confident of delivering a healthy performance in the future.”