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; 3) fall in commodity revenue to be partly off-set by lower power cost; and 4) continued growth in custom manufacturing. It has increased its custom manufacturing capex outlay to Rs6.8bn (vs Rs3bn earlier) post supply approval for advance intermediate for an AI. This leads to two big deal wins in two quarters; company has 7-10 more products in the pipeline. Chemplast believes custom manufacturing will have IRR of >25%. We anticipate custom manufacturing EBITDA contribution to rise >25% in the next 3 years which will improve mix and make capital allocation more efficient. Balance sheet remains healthy with cash balance of >Rs10bn. We have increased our EBITDA estimate by 2.5% / 3.9% over FY23/FY...

According to the data monitored by toodudu (the average price of SG5 manufactured by calcium carbide method), on January 31, the mainstream average price of PVC in China was 7,175 RMB/ ton, down 1.98% compared with 7,320 RMB/ ton at the beginning of the month, up 5.13% compared with the same period last year. In January, the PVC market first depressed and then rose, with a decrease of about 2% in the whole month, and the price fluctuated little. In January, the off-season demand is expected to weaken, especially in the northern part of the transportation is not smooth, as well as some downstream enterprises stop work in advance for holidays, the operating rate declines, and the support for PVC demand is weakened. In addition, the price of raw material calcium carbide falls, there are few maintenance enterprises, the market supply is sufficient, and the trading atmosphere is weak. The enterprises reduce the price and ship goods, falling by 4.88% in the first half of the month. The turn...