Chemplast Sanmar Limited, a speciality chemicals company with a significant presence in the Custom Manufacturing business, the market leader in Speciality Paste PVC in India, and the 2nd largest producer of Suspension PVC in India (through its wholly-owned subsidiary), announced its unaudited Financial Results for the quarter/ nine months ended December 31, 2023.

Chemplast Sanmar reported a significant decline in revenue from operations Rs. 888 crores in Q3 FY 24 compared to Rs. 1,189 crores in the same period last year, reflecting a 25% decrease. Sequentially, revenue dropped by 10% from Rs. 988 crores in Q2 FY ’24. The cumulative revenue for the nine months ended FY ’24 stood at Rs. 2,872 crores, reflecting a 24% decline compared to Rs. 3,794 crores in the corresponding period last year.

The company reported a net loss of Rs. 89 crores in Q3 FY ’24, compared to a net profit of Rs. 27 crores in Q3 FY ’23. Sequentially, the company registered a marginal net loss of Rs. 26 crores in Q2 FY ’24. The cumulative net loss for the nine months ended FY ’24 amounted to Rs. 127 crores, compared to a net profit of Rs. 106 crores in the same period last year.

Commenting on the results, Ramkumar Shankar, Managing Director, said, “After a relatively better Q2 FY ’24, Q3 FY ’24 performance ran into heavy weather due to further correction in PVC prices on account of dumping from China and other countries, slow down in the Other Chemicals (Caustic Soda, Chloromethanes, Hydrogen Peroxide, Refrigerant gases) business due to the over-supply situation in India, increase in key feedstock (EDC and Ethylene) prices and adverse impact of the lag effect in correction of VCM prices.

However, the boom in the infrastructure and real estate sectors is driving the strong demand for PVC. We expect a gradual recovery in prices and margins over the next 2-3 quarters. The Other Chemicals business is also expected to witness improvement in prices in the next 3-4 quarters once the excess supply is absorbed by the market.

In our Custom Manufactured Chemicals Division’s business, the pipeline is healthy. We commercialised 3 new products this year and a number of products are under various stages of development. Despite the challenges on account of the downturn in the global agrochemicals industry and the consequent inventory rationalisation, we expect this business to deliver a reasonable growth during the year. While commercial production from Phase 1 of the expansion project has commenced, Phase 2 is expected to be completed in Q1 FY ’25.

The 41 ktpa Paste PVC project is expected to start commercial production in Q4 FY ’24. This will further cement our position as the leading Paste PVC producer in India. Despite the recent uncertainty in the industry, we are confident of the long term potential of all our businesses and are strengthening our capabilities and relationships to grow in a sustainable manner.”

Key Highlights

• Prices of both Suspension PVC and Paste PVC were lower by 8% and 6% respectively on qo-q basis

• Caustic Soda and Chloromethanes prices were flat on q-o-q basis

• EDC prices witnessed a 12.5% increase during Q3 FY ’24 compared to Q2 FY ’24 while VCM prices remained flat during the quarter compared to the previous quarter

• Power cost (Rs. 143 Cr) increased marginally by around Rs. 4 Cr compared to the previous quarter

• Commercial despatches commenced during the quarter from the Phase 1 expansion project of the Custom Manufactured Chemicals division

Projects Update

• Paste PVC expansion project – expected to be commissioned in Q4 FY ’24

• Custom Manufactured Chemicals Phase 2 expansion project – expected to be completed in Q1 FY ’25

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