Chemplast Sanmar Ltd. has posted a standalone net loss of ₹28 crore against a profit of ₹39 crore in the year-earlier period due to sluggish demand globally and “excessive dumping” by China.
Revenue from operations contracted 39% to ₹350 crore, the specialty chemical maker said in a statement.
“With prices of both Suspension and Speciality Paste PVC being at the lowest level over the last 8-10 quarters, it has been one of the toughest quarters in recent times for Chemplast and the PVC industry as a whole,” said MD Ramkumar Shankar.
However, the domestic demand for Suspension PVC and Speciality Paste PVC was strong through the quarter with increase in volumes both on YoY and sequential basis. While there are immediate-term challenges, we are very confident of all our businesses’ prospects in the medium to long term,” he added.
On the future prospectus for FY24, he said, “The outlook for the PVC business is improving again, driven by the strong domestic demand, recovery in prices on account of fall in import arrivals into the country and reduction in feedstock prices. These factors, coupled with the softening energy costs, augur well for us and we expect better margins Q2 onwards.”
According to him, the other chemicals (caustic soda, chloromethanes, hydrogen peroxide, ref. gases) business also witnessed significant pricing pressures due to a combination of factors including weak demand, excess supply situation in India due to recent capacity additions and the global slowdown. These headwinds are likely to continue for a couple of quarters.
“In this tough environment, our Custom Manufactured Chemicals Division (CMCD) continued to perform well and is on track to achieve over 25% revenue growth during the year against the 10-15% guidance given earlier,” he said.
On Thursday, the company chairman Vijay Sankar dedicated phase 1 of the ₹300-crore new multi-purpose block in the CMCD.. Phase 2 at ₹380 crore is expected to be completed in eight months. The 41ktpa Speciality Paste PVC expansion project is on track.
“With two Letter of Intents in place and a strong pipeline of other products, we expect this capacity to reach peak utilisation in the next 2-3 years,” he said.
