Chemplast Sanmar Ltd., a maker of specialty chemicals, reported third-quarter standalone net profit jumped almost sevenfold to ₹142.8 crore, helped by higher operating profits and lower interest and finance costs.
Revenue from operations grew 27% in the three months ended December to ₹515 crore on higher realisations for key products such as specialty paste PVC resin, suspension PVC, chloromethanes and caustic soda.
“We have posted solid operating performance for the third quarter, despite the tough market situation prevailing due to COVID,” said chairman Vijay Sankar. “We are one of the few private sector companies from Tamil Nadu to have posted a [consolidated] net profit of over ₹400 crore in the nine-month period,” he added.
“We have repaid all the debts, thanks to strong cash accruals and we have gone in for loan refinance for our subsidiaries. We are in a strong position and would like to grow further,” Mr. Sankar said.
Noting that tight supply of both paste PVC and suspension PVC at the global level, coupled with India’s high import dependence, augured well for domestic manufacturers like Chemplast, MD Ramkumar Shankar said: “With our dominant position in the Indian market and expansion plans to cater to the growing demand, we believe that we are well placed to benefit from uptick in PVC market”.
“Custom manufacturing business is expected to benefit significantly due to China-plus-one strategy of global innovators,” he added.
Talking about the ₹650 crore expansion programme, the MD said the company was focused on delivering what it had committed to the investors at the time of IPO.
The company planned to go in for low-cost expansion leveraging existing land and infrastructure facilities. By 2024, it planned to incur ₹256 crore for expansion of paste PVC plant in Cuddalore, and spend ₹340 crore to set up a multipurpose custom chemicals facility near Krishnagiri by 2025.
Mr. Sankar said that after completion of the specialty chemicals unit’s expansion by 2025, the company’s overall market share would increase to 67%, from the present 55%. “We estimate the market size to go up to 1.80 lakh tonne, of which 1.10 lakh tonne will be catered by us,” he added.
Effective Friday, the company’s board appointed N. Sankar as chairman emeritus for life on an honorary basis.